Judge: CMN proves medical necessity

Monday, July 5, 2004

July 6, 2004

SACRAMENTO, Calif. - CMS can’t require a provider to furnish documentation beyond the CMN to prove medical necessity, U.S. District Court Judge Lawrence Karlton ruled June 28.
In his ruling, Karlton stated: “While Congress granted the Secretary broad discretion over medical necessity and billing criteria and procedures, it did not do the same regarding medical necessity documentation. Instead, Congress addressed the issue itself and established that any and all information required to make a medical necessity determination must be contained in a CMN.”
The ruling favors Maximum Comfort, which filed a complaint against HHS Secretary Tommy Thompson. The DME’s appeal hinged on the Region D DMERC’s attempt to recoup an overpayment of almost $780,000 related to power wheelchair claims.
It’s uncertain at this point to what extent the ruling can be applied to the DME industry at large. However, one government insider said that “while suppliers may see it as a great thing, from a fraud perspective, it's horrendous.”
“It's like telling the IRS they can only use what someone puts on the Form 1040 as the basis of their tax liability and not check any supporting documents,” the source said.