Hospitals Could Win Reversal of Rejected Medicare Claims
Administrative law judges for the Office of Medicare Hearings and Appeals have ruled to restore payments that were withdrawn from California hospitals following claims audits by PRG-Schultz International, the Sacramento Bee reports (Whitney, Sacramento Bee, 9/16).
Under a contract with CMS, PRG-Schultz reviews Medicare claims submitted by hospitals to help root out improper payments. In 2005, the practice began as a pilot program in California, Florida and New York, but it since has been made permanent and will be expanded to other states.
Government records show that PRG-Schultz has rejected about $100 million in claims since its contract began (California Healthline, 8/3).
PRG-Schultz is paid up to 25 cents to 30 cents for each dollar of Medicare claim it rejects. The auditor can keep its commission if its findings are sustained through the first two levels of an administrative review process.
The recent ruling by administrative judges came in the third level of reviews.
According to the judges, HHS rules prohibit auditors from reviewing cases older than one year without good cause, which PRG-Schultz has not shown.
However, a 2005 CMS press release states that the audit program was designed to review cases at least a year old.
The decisions by the judges cannot be appealed by the federal government, according to lawyers.
Lloyd Bookman, an attorney representing California hospitals, said, "I think the ruling is going to result in almost all of the cases being overturned."
The rulings could derail proposals to expand the CMS auditing program to all 50 states by 2010.
Dan McLeod, spokesperson for the program, said, "CMS is watching the [rulings] very closely, and they will be one of the factors used when making future policy decisions concerning the program" (Sacramento Bee, 9/16).