SNFs lose appeal in Medicaid case that lessens reimbursements

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The ruling shows the difficult of launching a successful challenge to CMS-approved amendment, one expert said
The ruling shows the difficult of launching a successful challenge to CMS-approved amendment, one expert said

A group of Pennsylvania nursing homes lost their court battle this week over an amendment to their state's Medicaid plan that cut their reimbursements.

The case, Christ the King Manor, Inc., v. HHS, stemmed from a 2008 amendment to Pennsylvania's Medicaid plan that paid skilled nursing facilities less than the rate paid under the existing plan. Fifty-three nursing homes sued the Centers for Medicare & Medicaid Services for approving the amendment, arguing the agency did not take the cuts' effect on their quality of care into consideration.

In 2013 a court reversed the amendment. The next year CMS reopened the case to examine how the amended reimbursement rates affected nursing home quality. A state report submitted as part of the case included data pulled from 2008 and 2009, which “obviously did not exist when CMS initially approved the plan amendment in December 2008,” according to court documents.

The nursing homes fired back, arguing that CMS' reevaluation of the amendment violated federal regulations by using actual quality data from 2008 and 2009, rather than predictive data that was available when the agency first reviewed the amendment proposal.

The U.S. Court of Appeals for the Third Circuit on Monday upheld CMS' plan to approve the amendment, finding that the use of data gathered after the amendment took effect did not conflict with earlier court decisions in the case.

Healthcare attorneys were watching the case closely, Bloomberg BNA reported, to see whether CMS would be allowed to review Medicaid plan amendments using data other than the predictive data used to initially get the amendment approved.

“The decision demonstrates the difficulty of successfully challenging CMS approvals of rate amendments,” Lloyd Bookman, an attorney with Hooper Lundy & Bookman, told Bloomberg.