A recent decision
from the U.S. Court of Appeals for the District of Columbia Circuit has thrown
open the possibility of a group appeal to address an error in the first
standardized amount computed for Inpatient PPS in 1983, which has understated
Inpatient PPS reimbursement. In short, hospital-to-hospital transfers were
included in the calculation for the 1983 standardized amount because they were
coded as discharges in the 1981 cost report data used to compute the 1983
standardized amount, and because transfers are paid differently under PPS, the
transfers should have been omitted from this calculation.
There had been a GME
case a few years ago in which a federal court held that you could fix a
"predicate fact" in an old cost report beyond the reopening window
and use that corrected fact/number going forward. That case fixed an error
in the hospital's 1997 FTE cap to be used going forward. Following that
case, CMS quickly published a regulation preventing the correction of
"predicate facts" unless the cost report with the fact to be
corrected was still within its three-year reopening window.
The recent decision
invalidated that regulation, opening up the opportunity to correct the
predicate fact here: the number of discharges in the 1983 standardized amount
calculation. Hall, Render, Killian, Heath and Lyman is planning to form a group
appeal for IHA members and is working on quantifying the impact to IHA members.
Group appeals could be formed prospectively, based upon the FFY 2019 IPPS Final
Rule, as well as for whichever hospital cost reports have eligible Notice of
Program Reimbursements (NPRs) or still unsettled cost report.
CMS's reaction to
this decision is not yet known. Since this decision is very recent,
information on how it would be implemented and whether CMS might ask the
Supreme Court to review this decision is still to be determined. As of now, the
case has been remanded back to the District Court, and it is possible the
hospitals would then be sent back to the Provider Reimbursement Review Board if
CMS does not elect to settle this issue. Hospitals should protect their appeal
rights in the meantime; as we know from past IHA group appeal initiatives, a
substantial number of hospitals participating in a group appeal does get CMS's
will be forthcoming. If you have any questions, please contact Terry Cole
at tcole@IHAconnect.org or 317-432-7741, Liz Elias at email@example.com or 317-977-1468,
Maureen O'Brien Griffin at firstname.lastname@example.org
or 317-977-1429, or your regular Hall Render attorney.