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Primary Care Providers Win Challenge of CMS Interpretation of Enhanced Payment Law

With the help and support of the Tennessee Medical Association, 21 Tennessee physicians of underserved communities joined together and retained Bass, Berry & Sims to file suit against the Centers for Medicare & Medicaid Services to stop improper collection efforts. Our team, led by David King, was successful in halting efforts to recoup TennCare payments that were used legitimately to expand services in communities that needed them. Read more

Tennessee Medical Association & Bass, Berry & Sims

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Thought Leadership Spotlight

Healthcare Transactions: Year in Review 2018Last year, CVS Health Corp. (NYSE: CVS) announced it would purchase health insurer Aetna Inc. (NYSE: AET) for $67.5 billion, a transaction that would be one of the biggest healthcare mergers in the past decade. The transaction raises an intriguing question: is this the beginning of a transformational shift in healthcare?

Recently, members of our healthcare group authored the Healthcare Transactions: Year in Review outlining 2017 M&A activity and drivers in the following hot healthcare sectors:

• Managed Care
• Hospitals
• Post-Acute Care—Home Health & Hospice
• Ambulatory Surgery Centers (ASCs)
• Healthcare Information Technology (HIT)
• Behavioral Health
• Physician Practice Management

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A Pyrrhic Victory: CMS Agreement to Pay Part B When Part A Denied Falls Short in Addressing Hospital Concerns

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March 18, 2013

On March 13, 2013, the Centers for Medicare & Medicaid Services (CMS) announced a policy ruling that, [1] while on the surface appearing promising, likely fails to address concerns raised by the American Hospital Association (AHA) and other stakeholders related to CMS' position on reimbursement for Part B services when a hospital's Part A inpatient claim is denied. In addition to the ruling, CMS released a proposed rule to permanently revise its Part B inpatient billing policy to be consistent with the ruling. [2]

The CMS ruling, CMS-1455-R, follows numerous Medicare Appeals Council and Administrative Law Judge decisions allowing Part B payments in this circumstance. In addition, the ruling comes in the wake of a lawsuit filed by the AHA in November 2012 over CMS' refusal to reimburse hospitals for Part B services when Recovery Auditors (f/k/a as Recovery Auditor Contractors) deny hospitals' Part A inpatient claims for reasonable and necessary care.

Under the new ruling, when a Part A inpatient claim for a hospital inpatient admission is denied as not reasonable and necessary, the hospital may submit a Part B inpatient claim for reasonable and necessary services that were provided. A hospital may submit a Part B inpatient claim for Part B services that would have been payable to the hospital had the beneficiary originally been treated as an outpatient rather than admitted as an inpatient, except when those services specifically require outpatient status, such as outpatient visits, emergency department visits, and observations services.

To take advantage of this change, however, hospitals must resubmit denied claims to Part B within one year of when the services were provided. Hospitals with claims appeals currently underway are not bound by the one-year limit and may resubmit Part B claims after the appeals are exhausted, regardless of when the services were provided.

While the ruling will provide some relief to hospitals currently appealing numerous contractor denials, the long-term impact of CMS' policy change is unlikely to resolve the concerns raised by the AHA in its lawsuit or reduce the number of appeals pursued by hospitals for claims denied by Recovery Auditors. Recovery Auditors typically review claims that are more than a year old. Even if the claims were reviewed within a year, hospitals will be unable to simultaneously appeal a Recovery Auditor's decision and seek payment under Part B. Therefore, CMS' policy change will provide little relief to hospitals struggling with Recovery Auditor denials of Part A claims.

If you have any questions or would like further information, please contact any of the attorneys in our Healthcare Fraud and Abuse Group.

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[1] CMS-1455-R, available here
[2] CMS-1455-P, available here


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