The American Hospital Association (AHA) indicated Thursday that while it may be a victory for providers that the Centers for Medicare & Medicaid Services (CMS) ruled that hospitals whose Part A claims have been denied as being unnecessary now will be entitled to Part B payment, it is not a long-term solution. 

In a written statement to RACmonitor, AHA President and CEO Rich Umbdenstock said that is why the association will press on with its lawsuit against the U.S. Department of Health and Human Services (HHS).

In November 2012, the AHA filed the suit, which challenged the department’s refusal to reimburse hospitals for what the association labeled “reasonable and necessary care” that recovery audit contractors later decided could have been provided in an outpatient setting.

“CMS has conceded that its current policy of refusing to reimburse hospitals for reasonable and necessary care when the only dispute is which setting – not whether – care should have been delivered is contrary to the law,” Umbdenstock said. “That is a central issue in our lawsuit.” 

The CMS ruling — effective March 13, and binding on all recovery auditors— is what the agency describes as “an interim measure until CMS can address issues raised by the Administrative Law Judge and decisions made by (the) Medicare Appeals Council.”

“We’re pleased CMS will allow hospitals to re-bill claims under Part B,” Umbdenstock explained. “Unfortunately, the proposed rule then threatens to undermine the progress made on this important issue. Under the proposal, hospitals will be able to re-bill CMS only within the narrow time frame of one year from when patient services were provided. Since the recovery audit contractor typically reviews claims that are more than a year old, the practical effect would be that hospitals would again not be fairly reimbursed for the care they provide Medicare patients.”

The CMS proposed rule, titled “Medicare Program; Part B Inpatient Billing in Hospitals,” proposes a permanent policy that would apply on a prospective basis; it appears to address the significant number of pending appeals of Part A hospital inpatient reasonable and necessary denials. 

“We will continue to work with CMS on this issue and also urge the agency to reimburse hospital claims they previously denied,” Umbdenstock said. “Hospitals should be fairly reimbursed for the care they provide to our nation’s seniors.”

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Chuck Buck is the publisher of RACmonitor.

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