AHA sues Medicare over audit program aimed at trimming improper payments

The American Hospital Association says the audit program is preventing hospitals from being reimbursed for care they provide. 

The Wall Street Journal: Hospital Association Sues Medicare Agency Over Payments Blocked By Audits
The American Hospital Association sued the agency that oversees Medicare, saying an audit program is depriving hospitals of reimbursements for care they provide. ... According to the suit, many hospitals have faced rulings by the auditors that care provided and billed on an inpatient basis should have been performed in an outpatient setting. Hospitals are then forced to return the money paid for the services. Even in cases in which the auditor didn't dispute the need for the care, but simply its venue, hospitals were not able to get paid for the services at outpatient rates, the suit said, costing them hundreds of millions of dollars (Mathews, 11/1).

Bloomberg: American Hospital Association Sues U.S. Over Medicare
The American Hospital Association sued the U.S. government for allegedly refusing to pay for "hundreds of millions of dollars" of medically necessary care as required under the Medicare Act. Private auditors used by the U.S. Department of Health and Human Services are revoking payments made for in-patient treatment under one section of Medicare, even as that treatment qualifies as necessary under a different part of the act, the organization said in a complaint filed today in Washington (Harris, 11/1).

Politico Pro: Hospitals Take Aim At Audit System Flaws
The lawsuit hospitals filed against HHS on Thursday unloads years of pent-up frustration over what hospital officials perceive as an unfair policy of second-guessing doctors that has cost the industry hundreds of millions of dollars. But it's also pushback against a program meant to save the government billions in improper Medicare billing. The American Hospital Association and four hospitals sued HHS to stop the agency from not paying claims when auditors determine that inpatient hospital care for a patient should have been provided in an outpatient setting, which is typically cheaper. The lawsuit seeks to overturn the policy and reimburse hospitals that have been denied payment (Norman, 11/1).

Modern Healthcare: AHA Sues HHS Over Medicare Payment Denials
The lawsuit followed the failure of year-long discussions on the care settings issue by the AHA and the CMS to reach a resolution, (Richard Umbdenstock, president and CEO of the AHA) said. He would not provide details of those talks and added that the CMS knew the lawsuit was coming as the logical "next step." A CMS spokesman declined to comment on the lawsuit because it is active litigation. The AHA, with data collected from members through its RAC Trac Initiative, said that despite the challenges hospitals face when challenging an auditor, that 75% of appeals filed are successful in the hospitals' favor (Daly and Carlson, 11/1).