The biggest hurdle providers face is the prospective nature of the payment system.

It was always a black hole. The Medicare Provider Reimbursement Review Board, or the PRRB, as it is commonly called, decided whether hundreds of Medicare cost report appeals would move forward or would be blocked for “jurisdictional issues.”

Providers raising cases before the PRRB never really knew how the PRRB had decided other cases and applied the rules. The PRRB now provides copies of all of its decisions, back to 2013, online. 

Providers are required to file Medicare cost reports by the end of the fifth month of their fiscal year. Acute-care hospitals, skilled nursing facilities(SNFs), home health administrations, Federally Qualified Health Centers (FQHCs), and end-stage renal dialysis facilities all have to file Medicare cost reports. Medicare fiscal intermediaries audit the Medicare cost reports and issue findings called Notices of Program Reimbursement (NPRs). If providers were not satisfied with adjustments made by the fiscal intermediaries, they can file an appeal with the PRRB.

While the impact of cost reports is dwindling, there are still things that providers can appeal to. Now, providers can at least see how the PRRB has treated other providers that have filed similar appeals.

Here are some of the seemingly unfair ways issues of jurisdiction work: Medicare can make adjustments after a cost report is filed, but providers can’t make changes after the cost report is first filed. Providers can ask for a cost report to be reopened within three years of receipt of an NPR, but only if there is a material error. 

The biggest hurdle providers face is the prospective nature of the payment system. When Medicare sets the rates for almost all types of providers, the providers can not dispute how the rates are computed. The underlying calculations of reimbursement rates can’t be appealed, even if they are wrong or the data was flawed. 

The one stunning reversal in this was the reimbursement of separately billable drugs in the 340(B) drug program. This program allowed certain nonprofit providers to receive outpatient drugs at a discounted price. Medicare slashed the payment for drugs that could be billed separately by almost 30 percent. In this case, Medicare could provide no support for the cuts, and worse yet, the cuts were not supported by any computations by Medicare. Surprisingly, courts sided with providers.

This reminds me of the old adage as a corollary to the second law of thermodynamics. The corollary goes, you can’t win, you can’t get even, and you can’t get out of the game.

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