Reimbursement:
COURT DECISION GIVES YOU ANOTHER SHOT WITH COST REPORTS
Published on Tue Jun 19, 2007
You can win back money for items that you didn't include on the original report.
Another federal appeals court has ruled on a cost report controversy that could mean millions of dollars in providers' pockets.
The U.S. Court of Appeals for the Ninth Circuit ruled in favor of Loma Linda University Medical Center over a cost report item dating back to 1985, according to the opinion released July 9, Loma Linda v. Leavitt (No. 05-56497).
Loma Linda appealed its 1985 report, disputing numerous disallowances in its cost report for that year. But significantly after the fact, the medical center realized it failed to claim more than $1 million in interest expenses. It then filed with the Provider Reimbursement Review Board to add the inadvertently deleted interest expense to its still-pending appeal, according to the opinion from Judge Robert Timlin.
The PRRB ruled in favor of Loma Linda, even though the provider didn't include the expense cost originally. The Board found "the error was clear and obvious, and should have been corrected by the intermediary," the Ninth Circuit notes.
The then-Health Care Financing Administration Administrator reversed the ruling, saying the provider must have a decision on the originally included cost, then could appeal that decision. High Court Could Weigh In Track record: Legal views on this issue have been mixed, the opinion notes. The Supreme Court has commented but not resolved the issue. And the First Circuit Appeals Court has ruled in favor of providers on this while the Seventh Circuit has done the opposite.
Provider victory: The Ninth Circuit ruled in favor of the provider, noting that "Congress chose to give the Board wiggle room to decide matters covered by a cost report that is properly before it which were not explicitly presented to, or considered by, the intermediary," the court says.
"The decision gives support to other cases which ruled that a provider may challenge cost report issues that were not fully included on the cost report in a timely filed appeal," notes attorney Liz Pearson with Pearson & Bernard in Covington, KY.
What This Means For You If you have a pending appeal to a cost report from the pre-PPS, cost-based reimbursement years, you could add not-before-requested costs to it.
"If there has been an appeal filed and the home health agency finds out later that it missed including costs ... that issue can be raised in the PRRB setting," Pearson tells Eli.
But the decision may not translate to a windfall for HHAs, cautions attorney Joel Hamme with Powers Pyles Sutter & Verville in Washington, DC. Because PPS began in 2000 and severed the tie between cost reports and direct reimbursement, "the number of such appeals is probably not that staggering any more ... and they [...]
