A typo cost a post-acute care provider nearly $300,000 in Medicare payments, but a federal judge has ruled that the it can again challenge the penalty after the federal government used an outdated rule to support it. 

U.S. District Judge Trevor McFadden found that the federal government violated the Administrative Procedure Act when it used an outdated rule to uphold a penalty against Post Acute Medical Squared at Texarkana LLC, Bloomberg Law reported.

“While affirming CMS’s denial of reconsideration, the Board cited to and relied on an outdated final rule rather than the current regulation for CMS reconsideration,” McFadden wrote. 

The whole problem stemmed from a typo. In 2015, the provider made a routine, required data submission to the Centers for Disease Control and Prevention’s National Healthcare Safety Network, which forwards the completed data sets to the Centers for Medicare & Medicaid Services. 

CMS, however, never received the submission because of a typo in at least one of the data sets that prevented the NHSN system from forwarding the information, court documents revealed. CMS imposed a 2% Medicare payment reduction on the facility the next year — costing the provider about $278,000. 

The provider unsuccessfully appealed the penalty to both CMS and the Provider Reimbursement Review Board. It had argued that both decisions were “arbitrary and capricious” under the Administrative Procedure Act, which warranted a reconsideration. 

The judge granted the summary judgment in favor of the provider since the error “infected” the board’s decision and remanded the case to the Department of Health and Human Services for a final decision. 

The provider had asked the court to not remand the case and reimburse its lost funding.