Earlier this year, Tower MSA summarized the California Insurance Guarantee Association’s (CIGA) case challenging the Centers for Medicare and Medicaid Service’s (CMS) practice of claiming conditional payment reimbursement on a charge that includes mixed diagnosis codes.
Mixed diagnosis codes result in the charge including both treatment related and unrelated to the workers’ compensation injury. In a further decision in this case issued May 3 (Cali. Ins. Guar. Ass’n v. Price, No. 2:15-cv-01113-ODW (FFMx), 2017 U.S. Dist. Ct. LEXIS 67589), Judge Otis D. Wright II set aside Medicare’s reimbursement claims against CIGA and issued a judicial declaration finding CMS’ practices pertaining to reimbursement unlawful, but stopped short of enjoining CMS from continuing these practices.
January decision finds in favor of CIGA
The recent decision by the District Court follows a Jan. 5 decision from Judge Wright finding in favor in CIGA. Key findings were as follows:
As a result of the January decision, CIGA was entitled to relief, which the court attempted, without success, to have CIGA and CMS resolve between themselves. Consequently, CIGA requested an order vacating CMS’ reimbursement claim of $119,122, a judicial declaration that CMS’ billing practice is unlawful, and a permanent injection prohibiting CMS from sending future reimbursement demands to CIGA based on the unlawful billing practice.
An example of this practice is where a conditional payment summary form includes one line item representing multiple divisible treatments such as a physician visit where the services provided were for hypertension, a flu shot and low back pain. Only the low back pain is related to the work injury, but the charge listed on the conditional payment summary form is for all treatments, not just the low back pain.
Court provides judicial declaration, but no injunction against CMS practices
In response to CIGA’s request, the court vacated CMS’ reimbursement claim of $119,122 and issued a judicial declaration that CMS’ billing practice is indeed unlawful. The court refused, though, to enjoin CMS from these billing and reimbursement practices.
While the court went into an extensive explanation as to why an injunction would not be warranted, in Judge Wright’s words it comes down to the following:
" ... the court is not confident that it possesses a complete understanding of how determinations regarding the contents of a line-item charge are, can, or should be made, and the court is not inclined to issue a broad judicial declaration that might ultimately require the parties to adopt an inefficient and unworkable reimbursement process going forward."
The court went on to note that primary plans (carriers and employers) now have an administrative appeals process available to them (the five-level appeals process put in place as a result of the SMART Act) to appeal reimbursement claims, rather than first seeking relief in federal court, as was done in this case.
While the court declined to issue an injunction, it nonetheless agreed to set the case for a bench trial Sept. 12 to gather further facts, likely related to how a line-item charge may be separated into divisible treatments such that the injury-related treatment only can be claimed for reimbursement. Based upon a review of the evidence presented at trial, the court will decide whether to issue an injunction.
Tower MSA analysis: Court attempts to balance interests of CIGA and CMS
The court here is understandably trying to balance the interests of CIGA in not being forced to reimburse CMS for charges unrelated to the claimed workers’ compensation injury, against the interests of CMS in not having its reimbursement processes disrupted. If this case does go to trial, what Judge Wright will be looking for is a way to enjoin CMS from over-inclusive reimbursement demands without significantly impacting CMS’ ability to recover on legitimate claims.
Ultimately, this may prove difficult for the court unless CMS steps up and agrees to work with its recovery contractors to better filter its claims for reimbursement such that one line item on a conditional payment summary form includes only treatment related to the claimed injury, workers’ compensation or otherwise.
If CMS refuses to make these changes, the court will either have to issue the injunction and force CMS’ hand or let the decision stand without the injunction. Even if an injunction is not issued, this case should be persuasive to other courts, and hopefully CMS, when it is cited in disputes and appeals of CMS reimbursement claims that contain mixed diagnosis codes.
Another question is whether, depending upon the outcome of the trial, either party will appeal the District Court’s decision to the U.S. Court of Appeals. CIGA may appeal as a result of the lack of an injunction, or CMS may appeal if an injunction is the result of the trial or based upon the judicial declaration regarding its billing and reimbursement practices. Tower MSA will continue to follow this important case and provide relevant updates.
Rita Wilson is CEO of Tower MSA Partners LLC.
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