New Orleans

Eastern Louisiana's federal district court recently dealt a blow to health care providers' hopes of overturning Medicare's overpayment-calculation procedures.

The court dismissed Reliable Home Health Care's lawsuit that alleged the U.S. Department of Health and Human Services violated the home health agency's Fifth Amendment rights when calculating the company's fines during an investigation.

HHS used extrapolation to determine that Medicare overpaid Reliable by almost $420,000 during fiscal year 1998.

In its complaint, Reliable argued that extrapolation is unconstitutional. However, the court dismissed Reliable's case, saying that the company did not fully exhaust administrative remedies before suing HHS in federal court.

The dismissal is not surprising, according to Steve Azia, counsel to the Washington-based Power Mobility Coalition, who said, “Courts have been reluctant to hear [such] cases, even if these cases are not related to a specific claim.”

Opening the door to Medicare claims-related litigation, the courts fear, would cause an overwhelming flood of cases, Azia explained. Consequently, the courts often refuse to hear such cases until the entire Medicare appeals process has run its course.

But, during the past few months, the Alexandria, Va.-based American Association for Homecare and other Medicare stakeholders have met twice with officials from the Centers for Medicare and Medicaid Services to discuss providers' concerns on a range of issues, including extrapolation. At the meetings, CMS officials were sympathetic to the industry's concerns about the fairness of extrapolation, according to AAHomecare.

Additionally, the U.S. House of Representatives in December passed H.R. 3391, designed to simplify Medicare's reporting and appeals processes, including a measure to limit the use of extrapolation in determining overpayments.

For breaking news, go to www.homecaremonday.com, the electronic news service of the home medical equipment industry.