HHS Sued Over Recoupment of Claim Funds

Community Hospital filed suit on Monday in the Northern District of Indiana against the secretary of the Department of Health and Human Services, Xavier Becerra. The plaintiff is petitioning for the review of a final decision made by the Medicare Appeal Council, a decision which effectively dismissed a review request for four administrative law judge (ALJ) decisions.

Four patients of the plaintiff each received cardiac procedures that resulted in a one-day inpatient hospital stay, per the complaint. Afterwards, the plaintiff sought Medicare payment for the four patients, identified in the complaint as B.D., R.K., H.P., and B.G. The plaintiff initially billed the respective procedures and hospital stays to Medicare Part A (hospital care) under the diagnosis-related group, which they asserted was the group that was “appropriate for the cardiac procedure.” Medicare paid for each claim, but later a Recovery Audit Contractor reviewed the medical records and subsequently “advised Community Hospital that the hospital stay was not necessary and reasonable” under the Social Security Act.

It was later demanded that the plaintiff repay the amount they had received for their Medicare claims in full, “without offsetting the applicable Medicare Part B (outpatient care), ambulatory patient classification amount for the cardiac procedure followed by outpatient observation.”

The plaintiffs maintains that the procedures and following outpatient stays were medically necessary, meaning that it should fall under the ambulatory patient classification section of Medicare Part B. Therefore, they argue, Community Hospital should only be responsible for the difference between the amount for Medicare Part A and the amount for the applicable Medicare Part B. The review request they filed for this discrepancy was dismissed, which prompted the filing of the petition for review on Monday.

The document cites one count of erring in not reversing the request dismissal and one count of the agency’s action being “arbitrary and capricious, in excess of authority and not supported by substantial evidence.” Community Hospital is seeking for the Court to use judicial review to set aside the Agency’s decision, remand the proceedings for redetermination, and lastly to grant the plaintiff all other proper relief.

The plaintiff is represented by Barnes & Thornburg LLP.