Health Law Daily CMS properly categorized medical technicians in 2008, just like 2007
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Wednesday, February 28, 2018

CMS properly categorized medical technicians in 2008, just like 2007

By Robert Margolis, J.D.

The inclusion of surgical technicians, mental health technicians, and heart center recovery technicians within the "All other occupations" category of several Kentucky hospitals’ occupational-mix survey for fiscal year (FY) 2008 was "correct and consistent" with CMS policy, just as it was for FY 2007. The Provider Reimbursement Review Board (PRRB), which recently saw a similar decision from the same parties upheld in district and circuit court, also held that it lacks authority to require the Medicare contractor to classify those technicians in a manner different from CMS policy, even if they had been classified differently at different hospitals. The PRRB thus rejected both challenges to the classification of technicians (Wyatt FFY 08 Wage Index (Occupational Mix Adj.) Group v. CGS Administrators, LLC, PRRB Hearing, Dec. No. 2018-D20, Case No. 08-1052G, February 6, 2018).

Background. The Medicare Act requires CMS to adjust prospective payment rates to providers based on geographic hospital wage rate differences. CMS collects data on the occupational mix of all Medicare-participating short term acute care hospitals every three years, creating an "occupational mix adjustment" (OMA) to the wage index. This OMA controls for hospitals’ employment choices on the wage index. In 2006, to comply with a federal court order requiring CMS to begin applying the OMA to 100 percent of the wage index for FY 2007, CMS issued a Joint Signature Memorandum (JSM-06412) requiring hospitals to submit employees’ wage and hour data for two calendar quarters of the calendar year 2006. The first quarter’s data would be used to adjust the FY 2007 area wage indices, and data from the first and second quarter would be used for FY 2008 and FY 2009. The Memorandum also required hospitals to use a subset of occupational categories used in the 2001 Bureau of Labor Statistics Occupational Employment Statistics Survey. The survey thus included these categories: (1) registered nurses; (2) licensed practical nurses; (3) nursing aides, orderlies, and attendants; (4) medical assistants; and (5) all other occupations.

Owensboro Medical Health System (OMHS) and several Baptist Hospitals provided data to their Medical contractor, which moved the technicians from the "Nursing" category to "All other Occupations." OMHS sent a letter to the contractor disputing these adjustments, arguing that OMHS was being treated differently from other hospitals in Kentucky and nationally. It argued that the adjustment effectively excluded these technicians’ wages and hours from the OMA calculation. OMHS requested that the technicians be reclassified in the subcategory "Nursing Aides, Orderlies, and Attendants." OMHS argued that the classification is arbitrary, contending that the technicians provide nursing services that supplement those provided by nurses, and perform services more skilled than nursing aides, orderlies, and attendants who are included within the "Nursing" category. OMHS estimates that the contractor’s classification reduced its reimbursements by approximately $35,000; the Baptist Hospitals made the same arguments but did not determine the effect of the classification on them.

FY 2007 decision. The PRRB previously considered the same arguments by the same parties with respect to FY 2007 and held that the contractor correctly classified the technicians in the "All other Occupations" category. The medical technicians’ positions did not require the same training or licensing as nurses, so it was proper not to place them in that category, the Board held. In addition, the patient services they provide required greater skill than those provided by aides, orderlies, or attendants, thus making that category incorrect as well, according to the PRRB. In addition, the fact that the Medicare Contractor did place similar technicians in the "Nursing Aides, Orderlies, and Attendants" categories for 10 of 45 hospitals in the region did not mean that the classification of OMHS’s technicians was arbitrary. The Board’s decision was affirmed by a federal district court in Kentucky (see CMS’ categorization of medical techs in 2006 occupational mix survey was reasonable, August 16, 2016) and the Sixth Circuit Court of Appeals (see HHS’s mix adjustment survey reimbursement rate not an abuse of discretion, September 5, 2017).

Classification correct for FY 2008. Noting that the parties "for the most part" made the same arguments in their challenge to FY 2008 classifications as had been rejected in their FY 2007 challenge, the PRRB reached the same conclusion for 2008—noting that it is bound by its FY 2007 decision—and upheld the contractor’s classification. The PRRB concluded that the Medicare contractor followed CMS policy in making its classification adjustments, and the Board lacks authority to require the contractor to classify technicians in a manner contrary to CMS policy. The PRRB also rejected the providers’ argument that CMS effectively conceded that the classifications were erroneous when in its program instructions for FY 2010, medical assistants and surgical technologies were classified as nursing employees. The instructions in place at the time the Medicare contractor made the adjustments controlled.

Federal fiscal year 2008.

Companies: Owensboro Medical Health System; Baptist Hospital East; Baptist Hospital Northeast; Western Baptist Hospital; Central Baptist Hospital; Baptist Regional Hospital; CGS Administrators, LLC

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