No, You Can’t Impose An Unknown Regulation On A Hospice Provider And Attempt To Retroactively Deny Payment

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In December, 2013, the Pennsylvania Commonwealth Court ruled that a hospice facility’s due process rights were violated when the Department of Public Welfare (“DPW”) imposed an additional requirement without giving notice to providers.  The Commonwealth Court ruled on two companion cases, each involving Bethany Hospice Services of Western Pennsylvania (“Bethany”).  The facts of the two cases are nearly identical.

Bethany provided the patients with hospice care.  In both cases, the patient presented with a Karnosfsky performance scale of 30% and myriad physical and mental illnesses.  During the course of the patients’ stay, Bethany recertified the patients for hospice care numerous times.  However, neither patient showed a decline, and instead remained in a chronic stable state.  Eventually, Bethany discharged each of the patients because they no longer met the criteria to remain in hospice due to an improved prognosis.

The DPW’s Bureau of Program Integrity, Division of Program and Provider Compliance (“Bureau”) retroactively denied payment for each patient’s hospice care because the medical records did not reflect a decline in the patients’ medical conditions.  Bethany argued that each patient met the Medical Assistance regulatory requirements for hospice, as well as the Hospice LCD guidelines.

The Commonwealth Court found that the DPW had imposed an additional requirement (that the patient must also show a decline in clinical status) without any authority to do so.  The DPW had failed to provide notice of this requirement (a decline in clinical status) when it sought to impose, retroactively, the denial of payment for treatment already provided.  The Commonwealth Court found that this violated Bethany’s rights to due process as it imposed a new legal burden on past transactions.

The DPW filed an Application for Reconsideration with the Commonwealth Court, which is currently pending.