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.

Topics

News

athenahealth Acquires Care Coordination Platform Patient IO

August 29, 2016
athenahealth has acquired Austin-based care coordination platform Patient IO (officially known as Filament Labs, Inc.) and the mobile solution will form the basis for athenahealth’s patient-facing mobile app, athenaWell.

Muddy Waters Report: St. Jude Medical’s Cardiac Devices Vulnerable to Cyber Attacks

August 29, 2016
St. Jude Medical, a Minnesota-based global medical device manufacturer, saw its shares drop last week after a Muddy Waters Capital report noted demonstrations of cyber attacks to two of the company’s cardiac devices.

OCHIN Offers Data Aggregation System

August 28, 2016
OCHIN, an Oregon-based nonprofit health IT services organization, has launched a real-time data aggregation system that it says allows healthcare organizations to enhance care delivery and improve business operations.

Global Healthcare IT Solutions Market Worth $228 Billion by 2020, Report Says

August 26, 2016
The global healthcare IT solutions market will be worth $228.79 billion by 2020, growing at a compound annual growth rate of 13.4 percent, according to a forecast by India-based market research firm MarketsandMarkets.

MaineHealth Taps Marcy Dunn as CIO

August 26, 2016
Portland-based MaineHealth has hired Marcy Dunn, currently of Catholic Health Services of Long Island, as its new CIO and senior vice president.

What Risk Do Privileged Users Pose to Healthcare Data Security?

August 26, 2016
Employees with the most access to high value information assets continue to be a serious insider risk, according to a Ponemon Institute study, and healthcare organizations need to ensure their governance processes decrease the risk of privileged user abuse.

Nashville Could Become Next Major Health IT Hub, Report Finds

August 25, 2016
Nashville, Tenn. very well could become the next big health IT “hub” in the U.S., according to a new analysis from the Brookings Institution’s Metropolitan Policy Program.

Health Systems, Public Health Agencies Dedicate Resources to Zika Control and Treatment

August 25, 2016
As the number of patients with Zika virus grows—2,260 confirmed cases in the U.S. according to the CDC—Baltimore-based Johns Hopkins Medicine has opened a multidisciplinary Zika virus center with resources dedicated to caring for patients with the virus.

Mount Sinai Establishes Pathology Center with Focus on Machine Learning

August 25, 2016
Mount Sinai’s Department of Pathology at the Icahn School of Medicine has established the Center for Computational and Systems Pathology, with the goal to more accurately classify diseases and guide treatment using computer vision and machine learning techniques.

Memorial Health Care Systems, Bryan Health Partner on Virtual Care for Rural Nebraska Patients

August 24, 2016
Memorial Health Care Systems (MHCS) has partnered with Lincoln, Neb.-based Bryan Health to launch Memorial eVisit, a virtual care platform to provide healthcare services to rural Nebraska patients.

OIG Identifies Security Vulnerabilities in CMS’s Wireless Networks

August 24, 2016
A penetration test of data centers operated by the Centers for Medicare & Medicaid Services found vulnerabilities in security controls over its wireless networks.

Survey: CIOs Prioritize Enterprise Imaging Strategies, but Interoperability Remains Core Challenge

August 24, 2016
Although imaging has now evolved into a core responsibility for an organization’s IT staff, more than half of responding CIOs said they cannot yet move imaging data between systems and applications, according to a new survey of CHIME members.

Sansum Clinic Recognized for Reaching HIMSS Stage 6 for Ambulatory EHR

August 23, 2016
Santa Barbara, Calif.-based Sansum Clinic has been recognized for achieving Stage 6 on the EMR Adoption Model, or EMRAM, as designated by HIMSS Analytics.

ONC Releases 2017 Draft Interoperability Standards Advisory

August 23, 2016
The Office of the National Coordinator for Health Information Technology (ONC) has issued its draft Interoperability Standards Advisory (ISA) for 2017 for public comment.

Survey: Hospital IT Execs Fearful of Mobile Security Threats

August 23, 2016
More than eight in 10 (82 percent) hospitals surveyed by Spyglass Consulting Group expressed grave concerns about their ability to support and protect mobile devices, patient data, and the hospital’s technology infrastructure as a result of the growing threat of cybersecurity attacks.

Pages