by Elizabeth Hogue, Esq.
On October 5, 2020, the U.S. Supreme Court denied review of a provider's petition that raised questions about the fairness of the Department of Health and Human Services process for reviewing Medicare overpayment determinations. This means that the lower Court decision from the Fifth Circuit stands. [Palm Valley Health Care, Incorporated v. Alex M. Azar, No. 18-41067, U.S. District Court for the Southern District of Texas, January 15, 2020.]
HHS, acting through a Medicare contractor, audited Palm Valley Health Care. During the audit period between July 1, 2006, and January 31, 2009, Palm Valley submitted 10,699 Medicare claims.
The Medicare contractor sampled 54 claims and concluded that 29 of them were for services provided to beneficiaries who were not eligible for home health care. The overpayment for the 29 claims was $81,681.03, which the contractor extrapolated to $12,589,185. Administrative review reduced the number of ineligible claims from 29 to 25. Palm Valley challenged the overpayment finding, the sample used by the auditor, and the extrapolation methodology.
With regard to the overpayment finding, Palm Valley argued that the definition of homebound required to be eligible for the Medicare home health benefit is too demanding. Specifically, Palm Valley argued that patients are homebound if they should stay at home, even if they do not actually do so. Palm Valley argued that whether or not patients actually leave home is largely irrelevant. What matters is when beneficiaries have conditions restricting their ability to leave home without assistance. Palm Valley, however, did not raise the above argument about homebound status until it was already in Court. The Court said that the issue should have been raised while appeals were at the ALJ level or below to give HHS an opportunity to address the issue.
The Court concluded that it could not address the issue of homebound status.
Palm Valley also argued that HHS lacked substantial evidence for the denial of 25 claims on the basis of homebound status because HHS relied primarily on interviews of the beneficiaries themselves who stated that they were not homebound. Their testimony was unreliable, according to Palm Valley, because a significant amount of time passed between the claims and interviews.
The Medicare contractor relied, for example, on an interview with a beneficiary's daughter two years after the dates of services. The patient's daughter described how two years earlier her father was able to drive to the barbershop and to visit his daughters. An interview with another patient revealed that the patient was alert and frequently traveled outside the home without assistance for activities, such as shopping and visiting friends.
The Court said that Palm Valley's records corroborated the testimony above. In one of these cases, for example, the records show that the Agency sent someone to the patient's residence on multiple occasions, but the patient was not home.
With regard to sampling and extrapolation, Palm Valley claimed that the methodology used does not pass muster because it has not been peer-reviewed or generally accepted in the relevant scientific community. Palm Valley's own expert testified, however, that the sample was a valid probability sample and that the correct formulas were applied to extrapolate an aggregate overpayment amount from that sample.
Based upon the above, the Court affirmed the decision of the lower Court. Stay tuned for more "chapters" in this "book!"
©2020 Elizabeth E. Hogue, Esq. All rights reserved. No portion of this material may be reproduced in any form without the advance written permission of the author.
©2020 by Rowan Consulting Associates, Inc., Colorado Springs, CO. All rights reserved. This article originally appeared in Home Care Technology: The Rowan Report, with the author's permission. homecaretechreport.com One copy may be printed for personal use; further reproduction by permission of the author only. elizabethhogue@elizabethhogue.net