Health Reform WK-EDGE No right to challenge original NPR where hospital only appealed reopened NPR
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Friday, June 12, 2020

No right to challenge original NPR where hospital only appealed reopened NPR

By Jeffrey H. Brochin, J.D.

Unlike the broad scope of the Provider Reimbursement Review Board’s review of an initial Notice of Program Reimbursement (NPR), an appeal of a reopened NPR (RNPR) is limited to the specific issues revisited on reopening.

A federal district court has granted the motion for summary judgment filed by the Secretary of HHS in a lawsuit brought by a hospital that was denied participation in a group expedited judicial review (EJR) appeal before the Provider Reimbursement Review Board. The PRRB lacked jurisdiction to hear the hospital’s appeal because a group EJR requires that the PRRB individually assess jurisdiction over each provider in the group appeal, and the hospital never appealed the common issue by way of an NPR appeal (Flint v. AzarMay 31, 2020, Moss, R.).

NPR and RNPR appeals process. In order to obtain Medicare reimbursement payments, participating hospitals must submit cost reports to their MAC, and, based on those cost reports and the CMS Medicare fraction, the MAC then determines the total payment due to the hospital and issues an NPR informing them of how much they will be paid for the year. If a hospital is dissatisfied with a final determination as to the amount of total reimbursement due, it has 180 days to appeal to the PRRB.

If an NPR is reopened, and if the MAC makes a revision, the RNPR is considered a separate and distinct determination, which the provider may then appeal. Such an appeal is limited in scope, however: only those matters that are specifically revised in the revised determination are within the scope of any appeal of the revised determination, and any matter that is not specifically revised (including any matter that was reopened but not revised) may not be considered in any appeal of the revised determination.

Failure to appeal from initial NPR. In April, 2013, the MAC assigned to the hospital issued the year-long cost reporting for the period ending on September 30, 2008. Although the NPR advised the hospital that if it disagreed with the determination it could request a hearing within 180 days following receipt of the NPR, it was undisputed that the hospital failed to do so.

About five months after the original NPR was issued, the MAC notified the hospital of its intent to reopen the FY 2008 cost report settlement, specifically intending to review additional Medicaid days to be used in the calculation of the DSH adjustment and the Low Income Patient payment. To facilitate that review, the MAC instructed the hospital to resubmit the additional Medicaid days listings. In the reopening, the MAC considered and adjusted only the Medicaid eligible days and expressly excluded any consideration of Part C days. On May 15, 2014, the MAC issued an RNPR that reflected an adjusted number of Medicaid days in the hospital’s Medicaid fraction.

Request to join group appeal. On November 4, 2014, the hospital filed a request to join a group appeal in which the providers maintained that the Medicare Part C days should be counted in the Medicaid Fraction rather than the Medicare Fraction. That request was submitted within the 180-day time limit for the hospital to seek an appeal of its RNPR but well outside the 180-day period for seeking review of its initial NPR. The request was approved, and the hospital was added to the group appeal. However, the group then filed for EJR and as a result, the PRRB’s jurisdiction over every individual appellant then came under scrutiny.

The PRRB determined that it lacked jurisdiction over the hospital’s challenge because the common issue in the group appeal—the correct allocation of Medicare Part C days—was not a matter revised in the reopening of their NPR. The PRRB did assume jurisdiction over all the other appellants. The hospital initiated the instant action, claiming that the PRRB’s decision that it lacked jurisdiction over the hospital’s appeal was "arbitrary and capricious and not in accordance with the law."

Consistent with the reopening regulation. The hospital and the PRRB did not dispute that the PRRB could grant their EJR request only if it had jurisdiction over the hospital’s appeal. Nor was it disputed that the PRRB’s jurisdiction turned on whether the hospital was individually entitled to a PRRB hearing on the specific matter at issue in the group appeal. The court found that the hospital did not have a right to participate in the group EJR request relating to the allocation of the Medicare Part C days because it timely appealed only its RNPR and not its original NPR. This ruling was consistent with the reopening regulation, which provides that, if a provider appeals an NPR that is revised after a reopening—that is, an RNPR—then any review by the PRRB must be limited solely to those matters that are specifically revised.

Because the MAC had limited the reopening to the count of Medicaid eligible days and expressly excluded any consideration about the proper count or allocation of Part C days, and because the allocation of Part C days was not a matter specifically adjusted in the reopening, the PRRB properly concluded that the hospital was not entitled to participate in the group request, and they therefore lacked jurisdiction over the hospital.

For the foregoing reasons, the court granted HHS’s motion for summary judgment.

The case is No. 18-2005 (RDM).

Attorneys: N. Kent Smith (Hall Render Killian Health & Lyman, PC) for McLaren Flint. Diana Viggiano Valdivia, Office of U.S. Attorney's, for the District of Columbia, for Alex M. Azar, II.

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