Health Information Management

News: Medical necessity battle continues; AHA says lawsuit requires urgent attention

CDI Strategies, December 20, 2012

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The fight over medical necessity continued last week as the American Hospital Association and its four co-plaintiffs asks courts to “expedite” a lawsuit against U.S. Department of Health and Human Services (HHS) for unfair Medicare practices pertaining to the Recovery Auditor program.

According to a motion filed in Washington, D.C., December 13, the crux of the issue is this: Recovery Auditors second guessing physicians’ right to make decisions regarding where to best provide patient care. It suggests that Recovery Auditors “examine cold paper records and determine—at an alarming rate—that the physicians were wrong and patients should not have been admitted to [the] hospital,” the motion states.
Recovery Auditors collected $2.29 billion in overpayments in fiscal year (FY) 2012, according to CMS’ November report. The top concern listed for three of the four Recovery Auditors was medical necessity for cardiovascular procedures. The fourth was for medical necessity related to admissions for minor surgery. The latest recoupments represent a staggering increase of nearly three-times more than FY 2011, according to an article in Fierce HealthCare. (A November 27 report from the Office of the Inspector General indicated it expected some $6.9 billion in total fraud and related HHS recoupments.)
Determining where to best provide care and understanding Medicare’s rules and regulations surrounding payment for that placement continues to be difficult issue for many facilities. A recent 60 Minutes investigation “Hospitals: The Cost of Admission”, focused on admission practices of the 70-hospital for-profit Health Management Associates Inc. The news report alleged the chain pressured physicians to admit a set quota of patients in order to receive increased reimbursement for the services provided. Despite the company’s denial of the allegations its stocks fell sharply following the report. 
Nevertheless, the AHA states that CMS is illegally withholding funds. Its motion “seek(s) an expeditious resolution … because … the nation’s hospitals, are being harmed on an ongoing basis by an arbitrary government policy: [CMS] has refused, and is still refusing, to pay the nation’s hospitals for hundreds of millions of dollars’ worth of medically necessary care that they provide to Medicare beneficiaries,” the report states.

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