A typo cost a post-acute care provider nearly $300,000 in Medicare payments. Fortunately for the provider, however, a federal judge ruled in January that the company can again challenge the penalty because the federal government used an outdated rule to support it.
U.S. District Judge Trevor McFadden determined that the federal government violated the Administrative Procedure Act when it used an outdated rule to uphold a penalty against Post Acute Medical Squared at Texarkana LLC, Bloomberg Law reported.
“While affirming CMS’s denial of reconsideration, the Board cited to and relied on an outdated final rule rather than the current regulation for CMS [Centers for Medicaid & Medicare Services] reconsideration,” McFadden wrote.
The whole mess appears to have stemmed from a typographical error. In 2015, the provider made what it thought was a routine, required data submission to the Centers for Disease Control and Prevention’s National Healthcare Safety Network (NHSN), which then should have forwarded the completed data sets to CMS.
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. As a result, CMS imposed a 2% Medicare payment reduction on the facility the next year — which totaled $278,052.
The provider lost its appeal before CMS and the Provider Reimbursement Review Board. It had argued that both decisions were “arbitrary, capricious, and manifestly contrary to the Medicare statute” under the Administrative Procedure Act and warranted reconsideration.
Judge McFadden agreed and granted the summary judgment in favor of the provider since the error “infected” the board’s decision. He remanded the case to the Department of Health and Human Services for a final decision. Provider representatives had asked the court to not remand the case and reimburse its lost funding.
