Court: Medicare hospice provider cap calculated improperly

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OIG collected more than $5.8 billion in recoveries for FY 2013, makes hospice recommendations
OIG collected more than $5.8 billion in recoveries for FY 2013, makes hospice recommendations
The federal Medicare hospice provider cap is calculated in a way that is “arbitrary, capricious, an abuse of discretion, and unlawful,” a federal court recently ruled.

The Medicare program currently imposes a yearly aggregate payment limit on hospice providers that equals the number of beneficiaries enrolled in the benefit each fiscal year, multiplied by an amount that changes each year based on inflation. In FY 2009, that amount was $23,014.50, according to the Centers for Medicare & Medicaid Services. This calculation method is described in §1395f(i)(2)(C) of Title 42 of the US Code.

In the case of Lion Health Services Inc v. Sebelius, the hospice provider argued that the Department of Health and Human Services' method of calculating the aggregate provider cap does not follow that method, reports the Bureau of National Affairs. Federal regulation 42 C.F.R. §418.309(b)(1), which is currently used to calculate the aggregate provider cap, only counts a Medicare hospice beneficiary during a single fiscal year, even if that beneficiary has received care during other fiscal years.

The U.S. District Court for the Northern District of Texas on Feb. 22 decided that HHS' current method of calculating the aggregate cap does not accurately reflect the number of beneficiaries who received care at the Lion facility, and ruled in favor of the hospice provider. This lawsuit is one of 11 similar cases pending in federal court, all of which seek the invalidation of the HHS calculation method, according to BNA.