Physicians appropriately used increased payments to expand services, locations, hours in underserved communities
Nashville, Tenn., (October 31, 2016) – Primary care physicians from across Tennessee jointly filed a federal lawsuit today to stop efforts to reclaim more than $2.3 million in Medicaid payments made to the physicians to encourage them to expand their practices in underserved areas in 2013 and 2014. The physicians predominantly serve rural communities and disadvantaged populations, including Medicaid participants, and provide vital services in areas with limited access to medical care.
The lawsuit, filed by 21 physicians in the U.S. District Court of the Middle District of Tennessee, seeks to overturn a rule made by the Centers for Medicare & Medicaid Services (CMS) and stop efforts to recoup the funds by TennCare, the state’s Medicaid program. CMS required TennCare and all other state Medicaid agencies to audit physicians who received these payments. In total, TennCare is demanding repayment from more than 100 physicians. Physicians who received these payments in other states may eventually face similar claims.
“We acted just as Congress intended in passing the law – by expanding hours, services or locations to meet the needs of the underserved communities we practice in – and then the federal government tried to take the money back because we didn’t meet an arbitrary standard set by bureaucrats, not Congress,” said Dr. William Rodney, founder of the clinic that employs plaintiff Dr. Rickey Carson. With the payments, Dr. Carson’s practice in Memphis, Tenn., opened an outreach clinic for bilingual uninsured patients, expanded hours to weekends and upgraded other services. About 90 percent of the clinic’s patients are covered by Medicaid.
The Tennessee Medical Association, the state’s oldest and largest professional association for physicians, is financially supporting the lawsuit to further TMA’s interest in promoting access to healthcare for underserved populations, and advocate for Tennessee physicians against bait-and-switch tactics that could be financially devastating to some small medical practices. “CMS is blatantly overreaching its authority and misinterpreting the intent of Congress,” said Yarnell Beatty, TMA’s vice president of advocacy and general counsel. “These arbitrary actions by CMS punish doctors trying to do the right thing and put some of Tennessee’s most underserved populations and communities at even greater risk. This is a significant public health issue, and we are confident the court will do what is best for these communities.”
CMS Rule Arbitrary, Contrary to Statute
The complaint focuses on 42 U.S.C. § 1396a(a)(13)(C) (“Medicaid Enhanced Payment Statute”). The intent of the U.S. Congress in passing the statute was to entice physicians to expand necessary healthcare services in underserved areas. The statute established increased Medicaid payments for any “physician with a primary specialty designation of family medicine, general internal medicine, or pediatric medicine” in these underserved areas.
The 21 physicians bringing the federal lawsuit satisfy this requirement set by Congress, yet CMS arbitrarily added a second requirement through the regulatory rulemaking process. Under the rule, CMS requires physicians either to be board certified or to bill 60 percent or more of “the Medicaid codes he or she has billed” within certain specified billing code categories.
Many of the plaintiff physicians began practicing medicine before board certification became common for licensing or hospital privileges. In addition, several of the plaintiff physicians fell short of the arbitrary 60 percent billing code threshold only because their offices provide ancillary services, such as lab tests, that increase convenience to patients. Similar services in better-served areas are more often provided in dedicated labs.
CMS then required state Medicaid agencies to audit the physicians who received the payments to ensure they met this now-two-part test, according to the complaint. TennCare was the entity in charge of auditing the physicians to CMS’ standards and is ultimately responsible for enforcing the recoupment. Separately, the physicians are seeking a stay on their consolidated TennCare Provider Appeal currently pending before the Commissioner of the Tennessee Department of Finance and Administration.
Rule Unfairly Impacts Patients
“To best serve the patients in our small community, our office used the increased reimbursements to hire a bilingual nurse to better communicate with Spanish-speaking patients, providing a badly needed alternative to the emergency room,” said Dr. Clarey Dowling, of Brownsville, Tenn., who has practiced medicine for almost 40 years. About 60 percent of his patients are covered by TennCare. “We also invested in hiring an internal medicine specialist to provide expertise in preventive medicine and to educate patients on the treatment and prevention of chronic illnesses like diabetes.”
“Unfortunately, we couldn’t afford to keep these vital providers on staff once we were facing the prospect of having to repay funds we received two years ago,” Dr. Dowling added.
“The impact of this arbitrary rule on these mostly small-town, rural physicians who were trying to do the right thing for their patients is borderline catastrophic,” said David A. King, an attorney with Bass, Berry & Sims PLC. “Despite numerous warnings and simple appeals to common sense by many, including the Tennessee Medical Association and several state Medicaid agencies, CMS has continually failed to consider or respond to comments about how these arbitrary requirements would impact well-meaning family doctors and the underserved patients they care for.”
The lawsuit was filed by attorneys from Bass, Berry & Sims, headquartered in Nashville with offices in Washington, D.C., Memphis and Knoxville, Tenn. King, leader of Bass, Berry & Sims’ Managed Care Strategy & Disputes Team, notes that patients and physicians in many other states ultimately could be affected by this case.
About Bass, Berry & Sims PLC
As one of the largest healthcare firms in the U.S., Bass, Berry & Sims PLC has a depth of healthcare experience that ranges from operational and regulatory compliance to government investigations, litigation, and complex corporate transactions. Our firm has participated in the evolution of the healthcare industry in Nashville, the capital of entrepreneurial healthcare. We represent 25 publicly traded healthcare companies and more than 200 healthcare-related businesses including hospitals and health systems, large physician practices, ambulatory surgery centers, dialysis companies, clinical labs, hospice, home health, senior housing, pharmaceutical, specialty pharmacy, biotech, medical device and technology companies. We offer advice that is both appropriately conservative and practical when working with our healthcare clients to effectively manage their needs, including mergers and acquisitions, joint ventures, fraud and abuse, internal and government investigations, reimbursement, managed care contracting, licensing and certification, certificate of need and health planning, corporate compliance programs, antitrust, tax, HIPAA privacy and security compliance and legislative matters. Our deep bench of regulatory knowledge and experience, historical industry perspective and lower cost platform make our firm the stronger choice in today’s dramatically changing and increasingly complex healthcare environment. For more information, visit bassberry.com.