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Baxter Regional’s Fight Over Medicare Appeals Continues in Appeals Court

3 min read

Baxter Regional Medical Center in Mountain Home is one of several hospitals appealing a federal court’s decision denying their request to speed up Medicare claim appeals by the U.S. Department of Health & Human Services.

Baxter Regional said in June that it had $3 million in limbo in a seeming black hole of Medicare appeals at HHS.

The money was tied up because recovery audit contractors, known as RACs, have decided that care the hospital provided to some Medicare patients didn’t meet Medicare guidelines. The RACs force the hospitals to return the money, and the hospitals then have to file an appeal at HHS to recover the funds.

The problem is hospitals might have to wait up to 16 months before they even get a hearing to plead their case.

Baxter joined the American Hospital Association and two out-of-state hospitals to sue HHS in U.S. District Court in Washington last year. The plaintiffs wanted HHS to comply with a federal law by issuing a decision in the hospitals’ appeal cases within 90 days.

U.S. District Court Judge James Boasberg, though, dismissed the hospitals’ lawsuit on HHS’s motion to dismiss the case.

Boasberg said in his Dec. 18 opinion that he sympathized with the hospitals, “but for the time being the waiting game must go on. HHS’s delay in processing their administrative appeals, while far from ideal, is not so egregious as to warrant intervention.”

He said that no one denies that the delay is a problem that needs fixing.

“This Court, however, is not in a position to provide that fix,” Boasberg wrote.

He said that he hopes that HHS Secretary Sylvia Burwell and Congress will continue working toward a solution.

“Hospitals that are owed reimbursement should not be indefinitely deprived of funds,” he wrote.

(Also see: Waiting Room: Medicare Appeals Tie Up Hospitals’ Millions)

Paul Cunningham, executive vice president of the Arkansas Hospital Association, said last week that the delay in deciding HHS appeals continues to be an issue.

“Just from a hospital perspective, and this is not just in Arkansas, I think hospitals are looking for some relief and a bit more fairness in the process,” Cunningham said.

Baxter Regional said in court filings that it had “so much tied up in appeals that it has been unable to update its equipment or provide necessary repairs to its facilities, and its bond rating is at risk.”

Baxter’s president and CEO, Ron Peterson, wasn’t immediately available for comment by press time.

For 2013, the 268-bed hospital reported a loss of $118,535 on net patient revenue of $149.7 million, according to the hospital’s most recent Medicare cost report available to Arkansas Business. In 2012, it had a net income of $2 million on patient revenue of $157.6 million.

On Jan. 21, Baxter along with the American Hospital Association and the other two hospitals filed its notice of appeal at the U.S. Circuit Court of Appeals for the District of Columbia.

AHA President and CEO Rich Umbdenstock said in a statement that he was disappointed with the Boasberg’s ruling. AHA “will call upon the government to identify those priorities that trump providing hospitals with the necessary resources to provide essential care to the nation’s elderly and most vulnerable patients,” Umbdenstock said in a statement.

HHS said it was concerned about the delays. And it said it is working on ways to improve and speed up the appeals process.

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