A California Federal District Court has ruled that a supplier need only use a certificate of medical necessity (CMN) to provide information for the determination of medical necessity for Medicare power wheelchair claims. The court further concluded that the Secretary of Health and Human Services (HHS) cannot require that a DME supplier obtain Medicare beneficiary medical records and make a judgment about whether the equipment provided is medically necessary and reasonable. (Maximum Comfort v. Thompson, E.D. Cal., No. S-03-1584 LKK/PAN, 6/30/04).
While the court's ruling is only binding in the federal Eastern District of California, it is significant in that it is the first time that a federal court has held that the CMN provides all the medical necessity information to prove that a beneficiary meets the Medicare coverage requirements for power wheelchairs.
The case was brought by Maximum Comfort, Inc., a California DME supplier that had been subject to two audits by the Region D DMERC that resulted in overpayment determinations. The DMERC concluded that medical necessity had not been established because the supplier had failed to provide sufficient medical information, including medical records.
The federal district court rejected the government's three arguments why it had the authority to require the supplier to obtain the medical records and submit them to the DMERC to substantiate medical necessity. The government argued (1) that, because it had the authority to determine the criteria for medical necessity, it could determine the mechanism by which suppliers prove that medical necessity; (2) that the CMN is insufficient to provide the required information for medical necessity because Congress restricted the information that suppliers can provide on the form; and (3) that the supplier was required to submit additional medical necessity information because the CMN does not require sufficient information to address all the coverage criteria for power wheelchairs. The court responded to this last argument that the government could cure this deficiency administratively by adding more questions to the CMN.
Following are important points about the case and its implications:
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The court's decision supports the industry's long-standing arguments that the government's requests for medical records to substantiate medical necessity for power wheelchairs are overly burdensome on suppliers, impractical and that they require the supplier to second-guess the physician's professional medical judgment.
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The court's decision is binding upon other cases brought in the same California eastern district. When pursuing appeal rights, suppliers in that geographic area can cite this decision to support the argument that the CMN provides sufficient information to demonstrate medical necessity and that suppliers are not required to provide medical records.
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While other federal district courts are not required to follow the court's ruling, they may be influenced to use similar reasoning to reach the same conclusion.
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Suppliers who have been subject to the same requirement of providing physician medical records to document medical necessity should contact their senators and representatives to alert them to the case; the fact that a federal district judge made this ruling is significant.
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Suppliers should still ensure that they have documentation to substantiate medical necessity in the event of an audit. The district court's ruling does not change or necessarily impact current Medicare policy, which allows the DMERCs to request additional documentation — including medical records — to be provided to document medical necessity in the event of a pre- or post-payment review or audit.
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The federal government is likely to appeal this case to the Federal Ninth Circuit Court of Appeals.
For more on this court decision, see “Headline News,” page 12.
A specialist in health care legislation, regulations and government relations, Cara C. Bachenheimer is vice president, government relations, for Invacare Corp., Elyria, Ohio. Bachenheimer previously worked at the law firm of Epstein, Becker & Green in Washington, D.C., at the American Association for Homecare and the Health Industry Distributors Association. You can reach her by phone at 440/329-6226 or by e-mail at cbachenheimer@invacare.com.
