Recent PRRB and CMS Administrator Decisions: A Summary for Providers

by Baker Donelson

In recently released decisions, the PRRB and the CMS Administrator addressed a number of issues of interest to many providers. Short summaries of those decisions are provided below. Copies of the decisions can be found at these links: PRRB decisions and CMS Administrator decisions.

GME – FTE Count
IME – Available Beds, FTE Count

The Board found the Provider failed to maintain adequate documentation that certain elective resident rotations were performed at the Provider’s location. The Board affirmed the Intermediary’s exclusion of the related full-time equivalents (FTEs) from the graduate medical education (GME) reimbursement calculation. The Administrator affirmed the Board’s decision.

For purposes of the indirect medical education (IME) calculation, the Board reversed the Intermediary’s inclusion of beds that the Board found could not be put into use in less than 72 hours. For purposes of the starting bed count, the Board used the Provider’s contemporaneous documentation for FY 1993, and the end count from FY 1993 as the starting count for FY 1994. Lastly, the Board ruled that the available bed days should be reduced to exclude observation/recovery bed days. The Administrator reversed the Board’s ruling related to bed days, finding: (1) although the Administrator did not necessarily accept the 72 hour benchmark as the appropriate threshold to determine availability, she found the Provider failed to prove it met that benchmark except for units closed for construction; (2) the Intermediary’s reliance on licensed beds, available beds in the prior cost year or the Intermediary’s walk through, provided a more appropriate starting bed count; and (3) the Provider failed to adequately document its observation bed days.

The Board further ruled that resident time spent in research could not be included in the IME FTE resident count. The Administrator affirmed this ruling.

Rush Univ. Med. Ctr. v. BlueCross BlueShield Ass’n/Nat’l Gov’t Servs., Inc., PRRB Hearing Dec. No. 2012-D8 (Feb. 8, 2012), rev’d in part, aff’d in part, CMS Adm’r Dec. (Apr. 4, 2012).

Rush Univ. Med. Ctr. v. BlueCross BlueShield Ass’n/Nat’l Gov’t Servs., Inc., PRRB Hearing Dec. No. 2012-D9 (Feb. 8, 2012), rev’d in part, aff’d in part, CMS Adm’r Dec. (Apr. 4, 2012).

SNF Cost Limits – Low Occupancy Adjustment

The case was remanded from United States District Court for the District of Columbia to determine whether the Secretary’s application of the low occupancy adjustment related to the skilled nursing facility (SNF) cost limits was improper. The Board found the Secretary’s actions violated the precedent established by Alaska Professional Hunters Ass’n v. FAA, insofar as the Secretary’s new policy was not promulgated through notice and comment rulemaking. The Board remanded the case to the Intermediary to recalculate the SNF exception utilizing the Secretary’s policy before the change. Although the Administrator agreed the case should be remanded, it disagreed with the Board’s reliance on Alaskan Hunters. The Administrator opined that the court’s ruling with regard to Alaskan Hunters did not apply to the low occupancy adjustment, and remanded the case to the Intermediary to examine the Provider’s alternative proposal for application of the low occupancy adjustment.

Alameda Hosp. v. BlueCross BlueShield Ass’n/First Coast Serv. Options, Inc., PRRB Hearing Dec. No. 2012-D10 (Feb. 10, 2012), remanded, CMS Adm’r Dec. (Apr. 10, 2012).

GME and IME – FTE Cap

The Board upheld the Intermediary’s elimination of all GME and IME payments for the Provider’s fiscal years 2001 – 2007. The Board found that if a provider’s FTE cap prior to December 31, 1996 is zero, the only way the provider can increase that cap for cost years beginning on or after October 1, 1997, is to establish a new residency program or to merge with another hospital, which results in a combination of the hospitals’ FTE caps and GME average per resident amount (APRA). The Board found the Provider failed to establish that it met either of these criteria. The Administrator declined to review.

Doctors Med. Ctr. of Modesto v. BlueCross BlueShield Ass’n/Wis. Physicians Serv., PRRB Hearing Dec. No. 2012-D11 (Feb. 24, 2012), declined to review, CMS Adm’r Dec. (Apr. 6, 2012).

Nursing and Allied Health Education Costs Associated with M+C Enrollees

The Board ruled that the Intermediary improperly denied the nursing and allied health education payments related to the Provider’s M+C enrollees. The Board remanded the case to the Intermediary to make payment consistent with the M+C days data as reported by the managed care organizations (MCOs). The Administrator reversed, finding the Provider was not entitled to the payment at issue because it did not timely submit no-pay claims with the necessary days data at issue. The Administrator further opined that only the data on filed and processed no-pay claims could be relied upon for purposes of calculating the nursing and allied health payment.

Research Med. Ctr. v. BlueCross and BlueShield Ass’n/Wis. Physicians Serv., PRRB Hearing Dec. No. 2012-D12 (Mar. 9, 2012), rev’d, CMS Adm’r Dec. (May 14, 2012).

Wage Index – Paid Hours Not Worked

The Providers asserted the certain hours not worked but paid (i.e., employee paid time off, extended illness protection and cashed-out personal time) should be excluded from the calculation of the wage index. Although the Board found that such time should in theory be excluded from the wage index, the Provider failed to adequately document the time at issue during the wage reconciliation process with its Intermediary. The Board affirmed the Intermediary’s determination not to exclude the time. The Administrator declined to review.

Ft. Wayne (Indiana) FFY 2002 MSA Wage Index Group v. Blue Cross Blue Shield Ass’n/Nat’l Gov’t Servs., Inc., PRRB Hearing Dec. No. 2012-D13 (Mar. 16, 2012), declined to review, CMS Adm’r Dec. (Apr. 4, 2012).

Jurisdiction – Medicaid Eligible Days Not Claimed On Cost Report

The Board determined that although a provider is not required to formally apply for a DSH adjustment, it must generally submit Medicaid days information as part of the cost reporting process. The Board ruled, however, that if a hospital did not claim certain Medicaid days on its cost report because data from the State to document those days was not available, then the hospital could claim dissatisfaction regarding those days through an appeal. The Administrator vacated the Board’s decision, finding that the Board did not have jurisdiction over the appeal. The Administrator found that the Provider failed to demonstrate that it could not have identified the days either from its internal records or timely requests to the State, prior to submission of its cost report. Accordingly, the Administrator ruled that without such an impediment, the Provider was required to claim the days on the cost report and have the Intermediary deny them, before jurisdiction is conferred on the Board to entertain the issue.

Norwalk Hosp. v. BlueCross BlueShield Ass’n/Nat’l Gov’t Servs., Inc., PRRB Hearing Dec. No. 2012-D14 (Mar. 19, 2012), vacated for lack of jurisdiction, CMS Adm’r Dec. (May 21, 2012).

Jurisdiction and Hospice Payment – Limitation on Inpatient Care Days

Medicare regulations impose a limit on payment for inpatient hospice care days, such that total inpatient care days for Medicare patients cannot exceed 20 percent of the total days for which the patients elect hospice care. Any related excess reimbursement collected by hospices must be returned. The Board found no provision to waive recovery of an overpayment based on extraordinary circumstances (such as Hurricane Katrina) or generally, based on equitable principles. The Board did find that a waiver was allowable based on the Secretary’s issuance of a § 1135 waiver due to the effect of Hurricane Katrina, but applicable only until the expiration of the waiver on January 31, 2006. The Administrator modified the decision of the Board. The Administrator found no authority, even § 1135, supported the application of a waiver in this case. The Administrator ruled that the § 1135 waiver does not apply in this situation and that the Board does not have jurisdiction or authority over the Secretary’s waiver authority determinations.

Canon Health Care Hospice, LLC v. BlueCross BlueShield Ass’n/Palmetto GBA, PRRB Hearing Dec. No. 2012-D15 (Apr. 13, 2012), modified, CMS Adm’r Dec. (June 6, 2012).

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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