Appellate Court Ruling Says District Court Must Revisit Medicare Lawsuit
The Ninth Circuit Court of Appeals has ruled that a district court must reconsider a 2007 lawsuit claiming that Medicare underpayments have jeopardized patient care in seven California counties, the Santa Cruz Sentinel reports.
The lawsuit takes issue with Medicare reimbursement formulas that are based on geographic classifications developed in 1966 and updated in 1996.
In some counties, health care providers who treat Medicare beneficiaries are receiving payments that are as much as 24% lower than in neighboring counties with similar demographics.
As a result, the counties with lower reimbursement rates often have fewer physicians who are willing to accept Medicare beneficiaries.
The national class-action lawsuit -- filed on behalf of the seven California counties -- aimed to recover seven years of back payments totaling $2.4 billion.
The U.S. District Court in San Francisco rejected the case, but it was appealed and heard again in April 2009.
That appeal included new arguments claiming that the outdated Medicare payment formula was unconstitutional and violated counties' equal protection and due process rights.
In the latest ruling, the Ninth Circuit Court stated that the district court failed to consider whether the HHS secretary's decision not to revise the payment schedule areas was rationally supported.
According to the ruling, "the secretary relied on the rationality of the 1996 revision, while the counties pointed to demographic changes that made the 1996 schedule irrational" (Gumz, Santa Cruz Sentinel, 10/2).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.