Health Reform WK-EDGE Appeals court affirms decision, Final Medicaid Payment Rule is invalid
Friday, December 13, 2019

Appeals court affirms decision, Final Medicaid Payment Rule is invalid

By Rebecca Mayo, J.D.

Where a statute’s language carries a plain meaning, the duty of the agency is to follow its commands as written and not to supplement those commands with others it may prefer.

According to the Sixth Circuit, CMS incorrectly interpreted the phrase "primary specialty designation" to impose additional limitations beyond those in the provision of the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148) that it was intended to enact. The appellate court held that a statute’s terms are not ambiguous simply because the statute itself does not define them. The Sixth Circuit affirmed the lower court decision finding that the Medicaid Final Payment Rule was inconsistent with the applicable provision of the ACA and was therefore invalid (Averett v. HHS, November 25, 2019, Kethledge, R.).

Specialty classification. In 1996, Congress directed HHS to create a "standard unique health identifier" for each "health care provider" participating in the Medicare and Medicaid programs. Congress also indicated that HHS should take into account each provider’s "specialty classifications." HHS then required Medicare and Medicaid providers to complete a "National Provider Identifier" form that required providers to designate their "primary specialty." Additionally, Medicare providers completed a form that required them to designate their primary specialty and Medicaid providers designated their primary specialty through "self-attestation" during most states’ enrollment processes.

In 2010, the ACA provided for a temporary increase in payments to certain physicians who provided primary-care services to Medicare and Medicaid patients. To be eligible for increase Medicare payments, a physician must have had a primary specialty designation for certain primary care services and must have attested that primary-care services accounted for at least 60 percent of their recent billings under Medicare. The be eligible for the increased Medicaid payments, the physician only needed to have a primary specialty designation of one of those same primary-care services.

Final rules. In 2012, CMS promulgated the Final Medicare Payment Rule and the Final Medicaid Payment Rule to enact the provisions of the ACA that allowed for the temporary increased payments. The requirements under the Final Medicare Payment Rule were in line with those in the ACA. Physicians were eligible for the increase payment if they had enrolled in Medicare with a primary specialty designation of one of the required specialties and at least 60 percent of the physician’s recent billings to Medicare had been for those designated services. However, the Final Medicaid Payment Rule imposed additional requirements on physicians than those in the ACA. Physicians were required to show that they were Board certified in that specialty or that 60 percent of their recent Medicaid billings were for certain primary-care services.

Recoupment. Tennessee’s Medicaid Agency, TennCare, brought an administrative action against Tennessee physicians who received increased payments in 2013 and 2014. TennCare alleged that the physicians had not met the 60 percent requirement of the Final Medicaid Payment Rule and sought to recoup an average of more than $100,000 from each physician for a total of about $2.3 billion. The physicians filed a lawsuit in federal court seeking a declaration that the 60 percent requirement was contrary to the terms of the Medicaid provision, and an injunction barring the requirements enforcement against them. The district court granted summary judgment to the physicians, declared the Rule invalid, and enjoined TennCare from enforcing the rule against them. TennCare appealed.

Designation. CMS argued that Congress did not define primary specialty designation in either provision and was thus incumbent on the agency to give effect to the limitation of payments to providers with a primary specialty designation. However, the court held that the provisions are not merely starting points from which the agency can then make real policy choices but are instead laws which are bounded by the words that Congress chose in enacting them. The specific limitations were the statute’s words themselves.

The relevant Medicare provision of the ACA uses the term in the same context of providing a temporary bump in payments to primary-care providers. CMS interpreted that term to refer simply to the physician’s own designation, as their primary specialty, of one of the specialties recited in the Medicare provision. Which is also in-line with the standard practice of physicians self-designating under Medicare and Medicaid. Further, Congress included a 60 percent-of-billings requirement in the Medicare provision but chose to omit that requirement from the Medicaid provision. This would indicate that Congress intended to it be used for Medicare physicians but not Medicaid physicians. Therefore, the Medicaid Final Rule interpretation is inconsistent with the applicable provision of the ACA and is invalid.

The case is No. 18-5595.

Attorneys: David R. Esquivel (Bass, Berry & Sims, PLC) for Andrew Averett. Laura Myron, U.S. Department of Justice, for U.S. Department of Health and Human Services.

MainStory: TopStory CaseDecisions AgencyNews MedicaidNews PhysicianNews ProviderPaymentNews KentuckyNews MichiganNews OhioNews TennesseeNews

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