On July 28, 2010, a U.S. District Court in the Southern District of California rendered a decision of monumental significance to all providers who may consider challenging a RAC Contractor for violating the law.     The original lawsuit, filed by Palomar Medical Center on March 24, 2009, was the first lawsuit filed against a RAC.  The charge was that HHS (Health and Human Services) had allowed PRG-Schultz, the RAC Contractor for California, to unlawfully reopen a claim without showing “good cause” as required by Medicare regulations.  The appeal was made, and the judge rendered his verdict – bottom line?   The decision to reopen a claim with or without good cause is not subject to appeal.

Not Subject to Appeal??    Surely you jest, Your Honor!

The regulation is not complicated on this issue.   (Pss … Judge Benitez – Your Honor – didn’t you check out the CMS website?   No?   You never heard of it?  Umm … Sir, that would be the “official government website” that spells out the regulations all providers have to live by.)

Medicare’s regulation states that “A [RAC] contractor’s decision to reopen based on the existence of good cause, or refusal to reopen after determining good cause does not exist, is not subject to appeal”.   The operative words are “based on the existence of good cause”.

So … What is “Good Cause”?

Again, let’s go straight to the CMS website for the answer.  Here’s what it says.   “Good cause exists when there is new and material evidence … used to make the initial determination.”

They go on to define new and material evidence.   “New and material evidence includes any evidence that (1) was not readily available or known to the person or entity requesting/initiating the reopening at the time of the initial determination or redetermination; and (2) may result in a conclusion different from that reached in the initial determination or redetermination.”

In reopening the claim in question, PRG-Schultz did so without showing good cause, HHS arrogantly said they didn’t have to, and now a federal judge has upheld this flagrant disregard for the law.   Wonderful.   This does not bode well for the future, ladies and gentlemen.

What Can You Do?

Do as more and more of your fellow physicians are doing.   Get serious about compliance in your practice.   Drop me an e-mail at winston@nbsoga.com and I will help you.

Winston Creath is an independent healthcare consultant working in the compliance and revenue cycle management arenas on behalf of physicians and clinics.  He serves as President of National Business Solutions of GA, LLC.  He can be reached at winston@nbsoga.com for questions or comments.

About

Winston Creath is an independent executive healthcare consultant working in the compliance and revenue cycle management arenas on behalf of physicians and clinics. He serves as President of National Business Solutions of GA, LLC. He can be reached at winston@nbsoga.com for questions or comments.

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