Health Law Daily PRRB’s decision that SSI fraction was proper not supported by substantial evidence
Monday, October 5, 2020

PRRB’s decision that SSI fraction was proper not supported by substantial evidence

By Elena Eyber, J.D.

PRRB’s decision affirming the hospital’s SSI fraction and DSH adjustment calculated by CMS was not supported by substantial evidence.

A federal district court for the District of Columbia granted the hospital’s motion for summary judgment in part and remanded the matter to CMS because the Provider Reimbursement Review Board’s (PRRB) decision finding the Supplemental Security Income (SSI) fraction proper was not supported by substantial evidence. An acute-care hospital in California claimed that CMS improperly calculated payments owed to it under the disproportionate share hospital (DSH) adjustment, which provides an additional payment to hospitals that serve a disproportionately large number of low-income patients. The hospital argued that since CMS’s calculation was not based on the best available data, the PRRB’s decision to uphold the calculation did not comport with the applicable Medicare statute and regulations (Pomona Valley Hospital Medical Center v. Azar, September 30, 2020, Jackson, A.).

Procedural history. The hospital sought to verify CMS’s calculation of the SSI fraction that was used in determining its total DSH adjustment because it thought that the fraction was lower than it should be. The hospital sought the underlying SSA data from CMS, so it could review both the matched and unmatched data against its own patient files. CMS declined the request. The hospital then sought to have CMS review a sample of thirty to fifty unmatched patients and days and compare that sample against SSA’s data to ascertain whether they had been correctly excluded. But CMS declined this request as well. Unsuccessful in obtaining either the underlying SSA data or a review of sample data, the hospital recalculated its SSI fraction numerator using data to which it did have access from the State of California Department of Health Care Services Medi-Cal program. The hospital matched individuals appearing in its own patient files and CMS’s MedPAR data files with individuals appearing in Medi-Cal’s files. The result of the hospital’s analysis using publicly available data was that there were additional Medicare/SSI patients in the hospital, and a greater number of patient days, than CMS had included in its calculation of the SSI fraction.

PRRB decision. The hospital filed an appeal of the MAC’s calculation of its DSH adjustment for fiscal years 2006, 2007, and 2008 with the PRRB. The PRRB affirmed the SSI fraction and DSH adjustment. The PRRB acknowledged the hospital’s difficulty in proving that CMS significantly understated the hospital’s SSI fractions for the three fiscal years under appeal without access to the underlying SSA data or without the ability to test a sample of its data against the SSA data. But it found a number of flaws in the hospital’s matching and recalculation. The PRRB concluded that because the hospital did not provide a "crosswalk" that mapped the Medi-Cal aide codes to the SSI codes; estimate the impact of the two issues identified by the PRRB; or explain or identify the reasons for differences between the Medi-Cal aide codes and the SSI codes, the hospital did not submit sufficient quantifiable data in the record to prove that the SSI percentages calculated by CMS were flawed. The PRRB held that the SSI percentages used by the MAC for the hospital’s DSH adjustment were proper.

District court decision. The hospital argued that CMS made calculation and/or matching errors in determining its DSH adjustment, and that the PRRB’s decision upholding that determination, which was adopted by the Secretary, was not supported by substantial evidence.

The court found that the hospital presented evidence to the PRRB that supplied grounds to question whether CMS’s matching of MedPAR and SSA data undercounted the patient days used in the challenged SSI numerator. It presented evidence that aide codes 10, 20, and 60 denote patients in Medi-Cal’s files who are eligible for California state supplemental payments and/or federal supplemental security income, and that its matching of its own patient records against Medi-Cal’s data showed that CMS failed to include hundreds of patients denoted with aide codes 10, 20, and 60, and thousands of patient days, in calculating plaintiff’s SSI numerator. The court also found that the PRRB agreed with the MAC that the DSH adjustment was properly calculated based on CMS’s determination of the hospital’s SSI numerator even though the MAC presented no evidence to contradict the hospital’s evidence. The PRRB concluded that the hospital failed to submit sufficient quantifiable data to prove that the SSI percentages calculated by CMS were flawed.

The court held that there was no substantial evidence to support the PRRB’s decision that the hospital’s SSI fraction was properly determined by CMS. The PRRB concluded that because it could poke holes at what the hospital provided, it did not need to examine the accuracy of what CMS did. CMS, through the MAC, did not even bother to produce evidence at the hearing to justify its SSI fraction. Further, the PRRB’s decision failed to explain why the various potential flaws with the hospital’s calculation undermined the hospital’s conclusion so thoroughly that there was no reason to look behind CMS’s methodology, even though it was CMS’s matching that was under review, not the hospital’s. The court held that the PRRB made its decision not based on evidence presented by the agency but on its conclusion that the hospital’s evidence was insufficient to prove that the SSI percentages calculated by CMS were flawed.

CMS had the data that would have answered the hospital’s allegations and that proving the allegations without it would be almost impossible. Nevertheless, CMS declined to provide the hospital with any of the underlying SSI data or to conduct or facilitate a test of sample data, and it declined to present any of that data to the PRRB on appeal. Without that evidence, the court held that the PRRB improperly rejected the hospital’s allegations, and the PRRB’s decision was not supported by substantial evidence.

The case is No. 18-2763 (ABJ).

Attorneys: Robert L. Roth (Hooper Lundy & Bookman, PC) for Pomona Valley Hospital Medical Center. Peter M. Bryce, U.S. Department of Justice, for Alex M. Azar, II

Companies: Pomona Valley Hospital Medical Center

MainStory: TopStory CaseDecisions CMSNews AntikickbackNews DSHNews ProviderNews DistrictofColumbiaNews

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