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Home Health & Hospice Week

Lawsuits:

SUPPLIERS MUST GO BEYOND CMN, COURT SAYS

Published on Mon Oct 09, 2006

Suppliers of durable medical equipment, prosthetics, orthotics and supplies (DMEPOS) may have to submit additional evidence beyond a certificate of medical necessity to show the equipment is medically reasonable and necessary, according to a new decision by the U.S. Court of Appeals for the Eleventh Circuit.

Impact: The decision, announced Nov. 3, allows the U.S. Department of Health and Human Services to hold suppliers to a higher standard to secure payment from Medicare Part B.

In the case, Gulfcoast Medical Supply Inc. v. HHS, the court concluded that the Medicare Act "unambiguously permits Medicare Part B carriers and the HHS secretary to require suppliers to submit evidence of medical necessity beyond a CMN."

The appeals court rejected the argument by Gulfcoast Medical Supply Inc., a Florida-based supplier of durable medical equipment, that the HHS secretary has no discretion to request additional medical necessity documentation beyond a CMN.

"If, as Gulfcoast suggests, the carriers and the Secretary have no discretion to request any evidence of medical necessity apart from the CMNs already submitted by the suppliers, such audits would be rendered useless," the per curiam opinion said.

"Moreover, were we to adopt Gulfcoast's position, the Secretary would effectively lack the discretion to deny any claim so long as a supplier could find a physician--even a dishonest or incompetent one--to sign a CMN."

Don't make this mistake: Failing to document medical necessity according to the new standard could be costly. Medicare contractor Palmetto GBA concluded that Medicare had overpaid Gulfcoast $280,574 after an audit found that services for randomly selected beneficiaries were not supported by documents in its medical records and that at least half of those whose records were examined did not need a power wheelchair.

Note: The court's decision is available at www.ca11.uscourts.gov/opinions/ops/200516935.pdf.

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