In its ruling, the Court relied upon
the language of the statute that the Secretary of HHS may “’perform any of
[her] functions under’ the Medicare program ‘directly, or by contract . . ., as the Secretary may deem necessary.’” Gentiva, at 2 (citing 42 U.S.C. §1395kk(a)).
The Gentiva
case centers around the following statutory language, quoted by the Court:
“[a] medicare contractor may not use
extrapolation to determine overpayment amounts to be recovered . . . unless the
Secretary determines that. . . there is a sustained or high level of payment
error.”
Gentiva, at 3 (quoting 42
U.S.C. § 1395ddd(f)(3)).
The underlying audit was performed by Cahaba Safeguard
Administrators, a Medicare Program Integrity contractor. Cahaba performed a reimbursement review of
Gentiva claims submitted from July 2005-November 2006, and concluded that
Gentiva received higher than the average payment per beneficiary in its region,
and that at least 58% or more of its claims were at least partially
denied. Id. Based on its review, Cahaba made the
determination that the claims submitted by Gentiva showed “sustained or high level of
payment error.” Id. It then drew a sample of 30 claims, and extrapolated its results, for a
determination of an alleged overpayment of over $4 million. While Gentiva successfully challenged
Cahaba’s alleged overpayment determination, reducing the overpayment by almost
half, it disputed that Cahaba had the authority to make the determination of
the high level of payment error, based on the plain language of the statute
that the “Secretary” is to determine that there is a sustained or high level of
payment error, not a contractor. Id.
Despite a 1999 ruling by a former Health Care Financing
Administrator, Nancy-Ann Min DeParle, raising concerns regarding samples smaller
than 100 claims, the Court upheld the district court’s reliance on the
“Chevron” two-part test. It found that
(1) There was not an explicit exception to the Secretary of HHS’ “broad power”
to delegate; and (2) the Secretary’s interpretation was reasonable, and
therefore given deference, pursuant to Chevron. Id.
at 5, 7, 9 (citing Chevron U.S.A. Inc.
v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)).
The Court noted that
providers like Gentiva can still challenge the final overpayment calculation
and extrapolation methodology used at both the agency level and in the
courts. Id. at 8. However, providers
already have a challenge defeating
such overpayment determinations, and now, even though the Court noted that
Gentiva “may have the better reading” of the statute (Id. at 6), providers cannot even dispute the high level payment
error, even upon judicial review. This
certainly raises questions regarding the providers’ due process.
Our attorneys have successfully
handled Medicare Program Integrity audits, including addressing concerns
regarding the contractor’s audit methodology.
If you have any questions regarding the Gentiva case, specifically, or the Medicare audit process, please contact Jaya White at jwhite@kdlegal.com or Charles MacKelvie at cmackelvie@kdlegal.com.