AHA Sues Government Over Denied Medicare Payments

Fed up with reimbursement issues, the American Hospital Association (AHA) is suing the federal government. AHA filed the lawsuit against the U.S. Department of Health and Human Services (HHS) for denying Medicare payments.

“At issue is the Administration’s refusal to reimburse hospitals for reasonable and necessary care when the government in hindsight believes that such care could have been provided in an outpatient facility or department instead of in the inpatient portion of the hospital itself,” AHA wrote in a statement.

AHA is joined by four hospital systems — two in Michigan and one each in Missouri and Pennsylvania — in the case Americans Hospital Association v. Sebelius.

The association wrote that a doctor’s decision whether to admit a patient or provide care at an outpatient facility is complicated for Medicare patients because of advanced age and other ailments such as diabetes.

Government-sponsored recovery audit contractors (RACs) have been second-guessing these decisions by hospitals and doctors.

“RACs, which are paid primarily on the basis of how much Medicare funding is taken back from hospitals and physicians, review these care decisions years later without ever seeing or talking to the patient,” AHA wrote.

A study by the Centers of Medicare and Medicaid Services (CMS) found that 40% of RAC findings are appealed with providers winning 75% of the time.

“What the federal government is doing is wrong, unfair and a clear violation of federal law,” Rich Umbdenstock, president and chief executive officer of the AHA, said in a statement. “Doctors and nurses provide the best care possible using their medical judgment and training. Allowing government auditors to second-guess these difficult medical decisions about where to best treat a patient years later based on a cold record and then refuse to pay for that care is indefensible.”