Judge reverses Medicare appeal ruling in inpatient rehab case

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A federal District Court in Louisiana has reversed a Medicare Appeals Council ruling over denials for rehabilitation claims, including one involving an assisted living resident.

Teche Specialty Hospital, an inpatient rehabilitation facility in New Iberia, LA, went to court to reverse the denial of 19 claims by the hospital's Medicare contractor and an independent contractor, which asserted there was $300,000 in overpayments on the claims. An Administrative Law Judge had reversed payment denials on all but two claims, but said two patients with pelvic fractures showed a lack of functional improvement after treatment.

But Judge Rebecca F. Doherty said that the MAC did not interpret the rule on improvement properly and that Teche had concrete physician testimony on why inpatient rehabilitation was needed for the patients. In one case, an assisted living resident called L.B. had been referred to Teche after her pelvic fracture in 2008. Additionally, she had anemia, a urinary tract infection, congestive heart failure, hypertension, chronic airway obstruction, gastroesophageal reflux and thrombocytopenia, according to court records, furthermore, she did not make any improvement in Activities of Daily Living following the rehabilitation.

But the Health and Human Services Secretary Kathleen Sebelius “failed to provide any reasons for declining to consider all of L.B.'s medical conditions and complications, rejected the uncontroverted opinions of L.B.'s treating physician without a showing of good cause, and applied an incorrect application of the "significant practical improvement' criterion for IRF treatment,” the court ruled in vacating the decision.