Three facilities win suit against HHS and Medicare denials

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The Department of Health and Human Services violated a law when it wrongly interpreted a 1994 regulation, and now must reconsider Medicare claims denied to three nursing homes for atypical services, a federal trial court ruled.

Three hospital-based skilled nursing facilities, argued that the Health Care Financing Administration, now the Centers for Medicare & Medicaid Services, should have notified facilities and sought public comment before adopting Section 2534.5 of the Medicare Provider Reimbursement Manual and thereby significantly altering it.

The HHS violated the Administrative Procedure Act, the U.S. District Court for the District of Columbia ruled. The court said the 1994 interpretation was a significant change in its existing skilled nursing reimbursement policy.

This was a victory for Mercy Medical Skilled Nursing Facility, Alameda Hospital and Providence Centralia Hospital.