Federal Judge says “Stop Using Invalid Regulation”

Judge Tells Department of Health and Human Services (HHS) To Stop Using Invalid Hospice Cap Regulation

On Friday, August 21, 2009, Federal district court judge George Wu entered final judgment against the Department of Health and Human Services (read Final Federal Court Judgment Remand) and in favor of NAHA member hospice Los Angeles Haven Hospice on its challenge to the hospice cap regulation.

The final judgment provides that:

• The hospice cap regulation, 42 C.F.R. 418.309(b)(1), is invalid and set aside.
• HHS may not use the cap regulation in calculating the cap of any hospice from this point forward.
• HHS’ prior FY 2006 cap repayment demand to Haven Hospice is set aside.
• HHS must either return funds previously paid by Haven Hospice, with interest, or apply those funds to a new demand made in accordance with the statutory mandate to allocate cap room for each patient proportionally across years of service.
• Haven Hospice is awarded costs and may apply for an award of attorneys’ fees.

NAHA members should take note:  This judgment will not affect cap repayment demands issued prior to the judgment in this case.  For this reason, NAHA urges its members to seek advice as soon as possible about their rights as to prior-issued cap repayment demands.  Even if a cap demand is more than 180 days old at this point, members still have important rights and options to consider.

Although HHS is expected to appeal the final judgment, the final judgment represents an important further step in NAHA’s overall efforts to seek cap reform.  The decision demonstrates that HHS has been miscalculating the cap, failing to give proportional allowances that could decrease the cap liability of any hospice that has experienced periods of long average length of stay.  NAHA hopes that HHS will take the opportunity to join NAHA in its calls for cap reform.

NAHA’s cap reform proposal, currently before Congress in HR 3454 Medicare Hospice Reform and Savings Act of 2009, would: (a) provide some forgiveness to hospices; (b) improve proper access by requiring objective, evidence-based national coverage determinations; and (c) replace the retrospective cap calculation with a pay-as-you-go reduction in reimbursement for long stay patients.  This would reduce HHS’ administrative burden dramatically and eliminate the credit risk it faces in asking for money back after the fact.

Read the Final Federal Court Judgment Remand