Skip to content Skip to navigation

Hospitals Sue HHS Over Alleged Unfair Medicare Practices

November 5, 2012
by John DeGaspari
| Reprints
RAC audits are at issue

The American Hospital Association (AHA) has filed suit against the U.S. Department of Health and Human Services (HHS) over its alleged refusal to meet its financial obligations for hospital services provided to some Medicare patients. The AHA was joined in the suit by four hospital systems: Missouri Baptist Hospital, a critical access hospital in Sullivan, Mo.; Munson Medical Center, a 391-bed hospital in Traverse City, Mich.; Lancaster General Hospital, a 631-bed facility in Lancaster, Pa.; and Trinity Health Corporation, which owns 35 hospitals.

The AHA maintains that the issue is the refusal of HHS to reimburse hospitals for reasonable and necessary care, when the government, in hindsight, decides that such care could have been provided in an outpatient facility instead of the inpatient portion of the hospital itself. It notes that the decision that a physician makes regarding where the patient should be treated is often complicated for Medicare patients, who may older or suffering from ailments such as diabetes or high blood pressure.

According to the AHA, doctors are routinely second-guessed about these difficult decisions by government-sponsored recovery audit contractors, or RACs, which are paid primarily on the basis of how much Medicare funding is taken back from hospitals and physicians. It maintains that reviews often take place years after the decisions are made, without seeing or talking to the patient.

When RACs decide that care could have been provided in an outpatient setting, the hospital must return the funding they received, even years earlier. The suit maintains that when hospitals appeal the RAC decisions, they prevail most of the time. But even when they are not, payment for the services should be made under Medicare Part B, which covers hospital outpatient services.

The suit maintains that the Centers for Medicare and Medicaid Services (CMS) has refused to provide the Part B reimbursement under a “Payment Denial Policy” that prohibits Part B reimbursement for most items and services that were billed under Part A, which covers inpatient hospital care. The plaintiffs maintain that the policy has resulted in hundreds of millions of dollars for necessary care that the hospitals provided to Medicare beneficiaries months or years earlier.

According to the lawsuit, RACs collected $1.86 billion in overpayments between October 2009 and March 2012; it identified only $245 million in underpayments during the same period.



Lahey Hospital and Medical Center Fined $850K for Potential HIPAA Security Violations

November 25, 2015
Burlington, Mass.-based Lahey Hospital and Medical Center this week agreed to pay $850,000 to settle potential violations of the Health Insurance Portability and Accountability Act (HIPAA) Privacy and Security Rules stemming from a 2011 security breach.

Genomic Medicine Clinic in Alabama Opens its Doors

November 25, 2015
Last week, a genomic medicine clinic opened in Huntsville, Ala. with the aim of utilizing the power of the genomic sequence to identify the causes of illness in children and adults with undiagnosed disease.

DoD, VA Say Interoperability Requirements Have Been Met

November 24, 2015
The Department of Defense (DoD) says that it has met the interoperability requirements for electronic health records (EHRs) as called for in the National Defense Authorization Act (NDAA) of 2014.

Senate Committee Advances Rural Health Care Connectivity Act

November 24, 2015
The U.S. Senate Committee on Commerce, Science and Transportation last week passed a bipartisan bill that would enable rural nursing facilities to tap into funding from the government’s Universal Service Fund for telecommunications and broadband services.

Black Book Research: IT Outsourcing Poised for Growth in Healthcare Payer Sector

November 23, 2015
A new Black Book Research report estimates the demands of data security, population health and value-based benefits solutions—and revenue cycle modernization—will drive the payer IT outsourcing market in excess of $60 billion by the end of 2017.

EHRA, HIMSS Comment on CMS Value-Based Payment Models

November 23, 2015
The Electronic Health Record Association (EHRA) and the Health Information and Management Systems Society (HIMSS) last week weighed in on the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and voiced concerns about new data reporting requirements and new certification criteria for alternative payment models.

CMS Online Drug Mapping Tool Details Opioid Prescribing Patterns

November 20, 2015
The Centers for Medicare & Medicaid Services (CMS) recently unveiled an interactive online mapping tool which shows geographic comparisons at the state, county and ZIP code levels of de-identified Medicare Part D opioid prescription claims data.

Physician Optimization Project Proves Successful at Emory Healthcare

November 20, 2015
Physicians at the Atlanta, Ga.-based Emory Healthcare removed up to one-third of clicks from their ambulatory workflow and, on average, are spending 36 percent less time finishing charts from home as a result of its physician optimization project.

USDA Awards $23.4M in Grants for Rural Telemedicine Projects

November 20, 2015
In conjunction with National Rural Health Day yesterday, Agriculture Secretary Tom Vilsack announced that the United States Department of Agriculture (USDA) is investing $23.4 million in distance learning and telemedicine projects in rural areas.

Geisinger Health System Launches Patient Refund App

November 20, 2015
Geisinger Health System unveiled last week its ProvenExperience pilot program, which will offer refunds to dissatisfied patients.

Health IT Now Coalition Supports Veterans Telemedicine Bill

November 20, 2015
The Health IT Now Coalition, an organization comprised of healthcare providers, payers, patient groups and employers, wrote an endorsement letter of the Veterans E-Health and Telemedicine Support Act to the bill's cosponsors Senators Joni Ernst and Mazie Hirono.

KLAS: Providers Turn to Outside Firms for Value-Based Care Transitions

November 20, 2015
While some providers may have the ability to make the transition to value-based care (VBC) on their own, the vast majority of them are turning to firms who provide VBC consulting services and VBC managed services, according to a new survey from Orem, Utah-based KLAS Research.

Can Digital Health Tools Help People with Mental Illness Manage Chronic Conditions?

November 19, 2015
Dartmouth Centers for Health and Aging has partnered with Boston-based digital health startup Wellframe to examine the use of mobile technology to help older adults with serious mental illness, such as schizophrenia, self-manage chronic medical conditions.

NIH Announces Funding Opportunities for Precision Medicine Initiative

November 19, 2015
This week the National Institutes of Health (NIH) announced the first set of funding opportunities for the precision medicine initiative, a project unveiled by President Obama back in February that will enroll 1 million volunteers in the next three to four years.

Apixio Launches Cognitive Computing Platform That Extracts and Analyzes Patient Data

November 19, 2015
Apixio Inc., a San Mateo, Calif.-based data science company, announced the launch of its Iris cognitive computing platform designed to bring advanced data insights into healthcare by extracting and analyzing patient data from electronic medical records (EMRs).