The case revolves around a lawsuit between Escondido, Calif.-based Palomar Medical Center and HHS that was filed in 2009. PMC had gone through several rounds of administrative appeals to argue a RAC audit, which reviewed a claim 20 months after initial payment, was unnecessary. However, HHS said reopening that claim was not subject to appeal because it had “good cause,” according to the report.
Medicare RACs currently can audit a claim for any reason if it is less than one year old. Within four years, RACs must show “good cause” to audit the claim, and after four years, there must be indisputable evidence of fraud to reopen the claim.
A judge ruled in favor of HHS in July 2010, saying hospitals and physicians could not challenge a RAC’s “good cause” under Medicare regulations, but PMC appealed. The Ninth Circuit heard oral arguments in March, and now it has asked that new amicus briefs (pdf) must be filed on or before June 8 to help determine the case.
A final ruling in favor of HHS could increase audits on physicians and hospitals, which the American Medical Association argued would impose a “significant financial burden,” according to the report.
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