A federal judge in Washington has ruled that HHS violated a 1987 moratorium on changes to Medicare bad-debt policies when the CMS declined to reimburse a California hospital for debt held by a collection agency.
In 2007, 106-bed Foothill Presbyterian Hospital, Glendora, Calif., sued the government after the CMS concluded the hospital could not get paid for $61,000 in outstanding Medicare coinsurance and deductible charges written off as worthless and sent to an outside collection agency. The hospitals fiscal intermediary had rejected the bad-debt claims, and the Provider Reimbursement Review Board sided with Foothill.
This is the first decision in the courts that addresses whether the moratorium bars the (HHS) secretary from issuing a policy requiring providers to recall bad debt from collection agencies prior to claiming them on the cost report, and it is a great decision, said lawyer Joanne Erde, a partner in Duane Morris in Miami.
In 1987, Congress passed a moratorium intended to hold at bay HHS inspector generals office, which was pressing for more scrutiny of the claims. U.S. District Court Judge Ellen Segal Huvelle concluded in the Foothill opinion that the governments position regarding accounts held by collection agencies represents a policy change. A CMS spokesman did not return a call seeking comment. -- by Gregg Blesch