CMS unfazed by CMN defeat, considers an appeal

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Sunday, August 8, 2004

August 9, 2004

WASHINGTON - Medicare officials all but said “no big deal” to a June court ruling that prohibits the DMERCs from requesting information beyond the CMN to prove medical necessity.
“The government has 60 days to appeal the ruling and is currently
considering whether to do so,” a CMS official told HME News last week. “Therefore, the decision is not yet final.  Moreover, even if it becomes final, the decision will have limited (precedent-setting) effect, since it represents the view of only a single district judge. For these reasons CMS has no current plans to change its longstanding national policy regarding medical necessity documentation."
The June ruling occurred in the U.S. District Court for the Eastern District of California, located in Sacramento. The case involved Maximum Comfort, a Redding, Calif., HME, and hinged on Region D DMERC’s attempt to recoup an alleged overpayment of almost $780,000 related to power wheelchair claims. (See HME News 8/2004).
In his decision, Judge Lawrence Karlton stated that Congress, in approving the CMN, intended that it include all information necessary to determine medical necessity. The ruling bolsters the industry’s argument that the DMERCs have devalued the CMN (in an effort to stem skyrocketing power chair utilization, some say) and created a system of arbitrary denials. The DMERCs have done this by increasingly asking providers like Maximum Comfort for physician progress notes and other medical documents that in a perfect world would prove medical necessity but often don’t, say industry leaders.
As part of the decision, CMS had until Aug. 5 to accept or reject Maximum Comfort’s request that Medicare repay it $400,000, the amount CMS recouped plus interest. If CMS makes a counter offer, Karlton must decide between the two. Once he does, CMS has 60 days to file an appeal.  
The June decision is binding only in the Eastern District of California. In other parts of the country, however, providers can use the ruling to strengthen their case during an appeal, according to industry attorneys.

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