Long-shot strategy saves provider

Saturday, December 31, 2005

SAN JUAN, Puerto Rico - Hato Rey Medical Supplies avoided a sizeable overpayment recently by successfully using a defense that hardly ever leads a provider to victory.
Palmetto GBA notified Hato Rey of a $131,420 overpayment this summer, charging the provider with supplying medically unnecessary power wheelchairs and accessories to 14 beneficiaries. Hato Rey appealed the decision, asserting the equipment was not only medical necessary but also backed by all the right documentation: CMNs, prescriptions, delivery tickets and progress notes, said Marta Rodriguez, the provider's compliance officer.
The administrative law judge on the case, who flew in from New York, agreed with the carrier. However, citing Section 1879 of Title VIII of the Social Security Act, he agreed that Hato Rey was without fault because it "exercised due care in billing and accepting payment," and it had "a reasonable basis for assuming that the payment was correct," according to the decision.
Section 1879 grants a waiver of liability if the provider "did not know, and could not reasonably have been expected to know, that payment would not be made for such items." In such cases, payment is made regardless of denied coverage, the decision stated.
It's common for providers to use Section 1879 in their appeals, but it's rare for them to succeed, said Clay Stribling, an attorney with the Amarillo, Texas-based Brown & Fortunato.
"I haven't been involved in one case where it worked," he said. "The carriers are very adept at crafting their arguments that an overpayment submitted is a claim submitted with fault by the supplier. The way they do this is by showing that they issued guidance on this topic in the past and tying the guidance back to the supplier's obligation to know what the rules are."
The argument can succeed if the provider can show that the guidance was "sufficiently unclear or ambiguous," Stribling said.
Hato Rey's victory sends a message to other providers, Rodriguez said: Fight back.
"People don't fight back because they don't think they're going to get anything from the program," she said.