Obscure court ruling could set powerful precedent

Friday, December 13, 2013

WASHINGTON – A 5th Circuit Court ruling over runny eggs could be just the ammunition HME providers need in cases involving ambiguous CMS guidelines.

“People think this case is humorous because of the underlying facts, but it has implications for all types of Medicare providers,” said Edward Vishnevetsky, an associate with Munsch Hardt in Dallas. “This is the first time we’ve seen a court not defer to CMS’s interpretations.”

Prompting the ruling was an appeal filed by Elgin Nursing Rehabilitation Center disputing a $5,000 fine it received for soft cooked eggs. At issue: Whether or not eggs could be soft-cooked if heated to a certain temperature depended on the interpretation of a semicolon as meaning “and” or “or.”

When the court sided with the nursing home’s interpretation, that opened the door to other providers with “reasonable” interpretations of CMS’s guidelines to challenge denials, attorneys say.

“Providers are not going to be laughed at—they’re not going to be ignored,” said Neil Caesar, president of the Health Law Center in Greenville, S.C. “The reasonableness of the interpretation (in this case) is based on the layman’s standard, not an attorney’s standard.”

Providers could use the Elgin case to convince administrative law judges (ALJs) to rule in their favor, attorneys say. That could ultimately lead to clearer CMS guidelines and should reduce the number of denials based on ambiguous provisions in local coverage determinations (LCDs) and other policy manuals, attorneys say. 

“We’ll need numerous cases proving this in different scenarios,” said Vishnevetsky. “This is a starting point to see how much, or how little, courts will defer to the agency going forward.”