Background
Encompass Health Rehabilitation Hospital of Charleston, LLC sought payment for inpatient rehabilitation care provided to two Medicare beneficiaries. After receiving four denials through successive administrative levels, the hospital requested review by the Medicare Appeals Council. The Council adopted the administrative law judges’ decisions, finding the hospital’s requests insufficiently identified and explained its challenges. The hospital then sought judicial review in district court, which granted summary judgment to the Secretary of Health and Human Services.
The court’s reasoning
The court reviewed the district court’s summary judgment de novo. It agreed with the Secretary that the regulation at Section forty-two comma one hundred five point one one one two subsection b requires parties to describe with particularity the aspects of the administrative law judge’s decision with which they disagree. The hospital’s requests failed to meet this standard because they did not explain why the beneficiaries met coverage criteria or why the judges did not account for all record information. Regarding the claim of arbitrary treatment, the court found the cited cases distinguishable because the Council did not perceive a need to modify the decisions in this case, whereas it did in one cited case and adopted the decisions without comment in another.
What it means going forward
Healthcare providers must ensure their requests for Medicare Appeals Council review strictly comply with regulatory specificity requirements to avoid dismissal or affirmation of lower-level denials.