Health Law Daily PRRB barred from reviewing low income payment adjustment
Monday, January 8, 2018

PRRB barred from reviewing low income payment adjustment

By Jeffrey H. Brochin, J.D.

The CMS Administrator has reversed the decision of the Provider Reimbursement Review Board (PRRB) which had concluded that it had jurisdiction to review a Medicare contractor’s determination of a provider’s low income payment (LIP) adjustment. The Secretary of HHS clarified in its fiscal year (FY) 2014 Final rule (78 FR 47860) that the language of 42 C.F.R. Sec. 412.630 was intended to fully preclude administrative or judicial review of the methodology used for any prospective rate (by deleting the word "unadjusted") so as to clearly preclude review of the federal per discharge payment rates, including LIP adjustments for inpatient rehabilitation facilities (IRFs) (Santa Rosa Memorial Hospital v. Cahaba Safeguard Administrators, LLC, CMS Administrator Decision, Review of PRRB Decision No. 2017-D26, October 13, 2017).

IPPS and its exclusions. Section 1886 (d)(I)(B) of the Social Security Act (SSA) and Part 412 of the Medicare regulations define a Medicare certified hospital that is paid under the inpatient prospective payment system (IPPS). However, the statute and regulations also provide for the classification of special types of Medicare certified hospitals that are excluded from payment under the IPPS which must meet the criteria specified at subpart B of Part 412 of the Medicare regulations. One of the types of hospitals excluded from the IPPS is an IRF.

After the Medicare contractor issued a determination of the LIP adjustment for the provider, an IRF, for fiscal year FY 2008, the provider protested the calculation to the PRRB, which ruled that it had jurisdiction to review the Medicare contractor’s determination of the LIP adjustment. Accordingly, it remanded the matter to the Medicare contractor which then appealed to the CMS Administrator.

Basis for PRRB review. The PRRB concluded that the statute prohibiting administrative review applied only to the establishment of the IRF prospective payment system (PPS) rates under section 1886 (j)(3) of the SSA, that the Secretary’s use of the term "the unadjusted federal rate" in the regulations significantly limited what was precluded from review, and, therefore, the LIP adjustment was not precluded from PRRB review. The PRRB further concluded that the provider’s appeal was not a challenge to the calculation of the prospective payment rate, but rather, an appeal of the accuracy of the Medicare contractor’s determination of the number of Medicaid eligible patient days (see Appeals related to data accuracy for calculating payment rates not precluded, September 22, 2017).

Clarification of rule by Secretary. In the FFY 2014 Final IRF rule, the Secretary clarified the language of 42 C.F.R. Sec. 412.630 to be in full accord with and accurately reflect the scope of section 1886 (j)(8) of the SSA, noting that "the regulatory text reflecting the preclusion of review has at times been improperly interpreted to allow review of adjustments authorized under section 1886 (j)(3)(v) of the Act." The Secretary’s clarification went on to state that "we do not believe that there should be administrative or judicial review of any part of the prospective rate." The Secretary deleted the word "unadjusted," so that the regulation would clearly preclude review of "the federal per discharge payment rates."

Based on the foregoing, the CMS Administrator ruled that the PRRB was in fact without jurisdiction to review the Medicare Contractor’s determination as to the methodology used for the LIP adjustment, and the CMS Administrator reversed the PRRB decision.

Cost reporting period ending 2008.

Companies: Santa Rosa Memorial Hospital; Canada Safeguard Administrators, LLC,

MainStory: TopStory CMSAdministrativeDecisions CMSNews CostReportNews MedicaidNews MedicaidPaymentNews MedicareContractorNews PaymentNews ProgramIntegrityNews GCNNews IRFNews

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