Health Care Litigation Update

For more information about this blog post, please contact Khaled J. KleleRyan M. Magee, or Labinot Alexander Berlajolli.

Fifth Circuit says Texas Hospital Cannot Challenge Medicare Payments Based on Wrong Information

The U.S. Court of Appeals for the Fifth Circuit recently ruled that Texas’ Hendrick Medical Center may not challenge Medicare payments calculated based on wrong information, when it failed to follow administrative rules for correcting the data before the federal agency set the payment rate.  The Court affirmed the district court’s grant of summary judgment to the Secretary in an action brought by Hendrick challenging Medicare payments it received for the 2015 federal fiscal year. The Court held that the district court did not err by dismissing Hendrick's appeal because the Board's determination that it did not have jurisdiction over Hendrick's appeal for failure to exhaust administrative remedies was correct. In this case, Hendrick received notice via the Federal Register but failed to request correction of its wage data by the published deadline in accordance with the established process under the statute. The Court noted that “these results may be harsh, but the deadline for administrative exhaustion was clearly set forth and properly noticed by CMS.” The case is Hendrick Medical Center v. Azar, case number 19-10334, in the U.S. Court of Appeals for the Fifth Circuit.  Again, this case is a reminder to exhaust your administrative remedies, especially when it comes to payor audits.  

Pennsylvania  Appellate Court Holds Physician Credentialing File is Not Protected by State Peer Review Privilege

Recently, a Pennsylvania state appellate court upheld an order compelling a hospital to produce the un-redacted contents of a physician’s credentialing file, which normally contains documents considered protected by state peer review privilege status and included multiple types of professional performance evaluations examining the quality and efficiency of services provided by the co-defendant physician that the hospital’s credentialing committee used in its credentialing and privileging process.  While the court agreed that the file documents meet the definition of peer review documents, it cited a 2018  Pennsylvania Supreme Court Decision, Reginelli v. Boggs, which held that the state peer review privilege only applies to documents of a review committee and not to documents of a review organization. The appellate court applied the holding in Reginelli to the credentialing file and held that because a credentialing committee is a review organization, its documents are not protected.  The court acknowledged that its holding would have a chilling effect on the candid sharing of information between health care providers, which serves an important peer review function as hospitals consider the qualifications of new applicants seeking clinical privilege. The case is Leadbitter v. Keystone Anesthesia v. Petraglia, case number 1414 WDA 2018.

AMA says Aetna, Optum Misused CPT Codes to Hide Administrative Charges

In a recent amicus brief filed by the AMA’s Litigation Center of the AMA and State Medical Societies in Peters v. Aetna, it urged the U.S. Court of Appeals for the Fourth District Court in Virginia to overturn a ruling that denied the companies’ liability in passing administrative charges through CPT codes.  The brief says the defendants in the case—Aetna Inc., Aetna Life Insurance Co. and Optumhealth Care Solutions Inc.—misused CPT codes to trick insureds into paying for administrative fees disguised as medical care. According to the AMA, the EOB and emails between the companies' employees showed Aetna used code 97039 to charge Ms. Peters an administrative fee when billing for a chiropractic visit. In calling on the court to overturn the decision, the AMA said the defendants did not legitimately choose a CPT Code as they are not a provider like a physician or hospital.  We will keep track of this case as it goes through the court system.