Court Nixes Medicare|Rule Limiting Hospice

(CN) - The 9th Circuit on Tuesday declared a Medicare rule limiting hospice care invalid, finding that the U.S. Department of Health and Human Services has for years enforced a regulation that violates federal law.

A three-judge panel in Pasadena affirmed a District Court finding that Los Angeles-based Haven Hospice does not have to repay more than $2.3 million in Medicare reimbursement that the department claimed Haven owed in 2006.

But the appeals panel lifted a nationwide injunction on barring further enforcement of the regulation, ruling that the District Court did not have the authority to enact such a sweeping ban.

At issue is a Medicare regulation that limits the amount of hospice, or end-of-life care, allowed for each beneficiary. In 2010, the cap was $23,875 per beneficiary, with care generally limited to six months. If a beneficiary lives longer than six months, coverage can be extended for an unlimited number of 60-day periods, according to the ruling.

The Department of Health and Human Services (HHS) administers the cap so that a beneficiary's allocation is "lumped" into a single year, instead of spread across the years of service "without regard to the length of the beneficiary's overall stay," the complaint states.

Haven Hospice challenged the way the department administered the cap after it was stuck with a bill of more $2.3 million in excess reimbursements for the year 2006. After failing to convince an administrative appeal board of its case, Haven sued the department in California District Court in 2008, arguing that its bill would have been a lot smaller had the department administered the cap across multiple years of service, as Congress mandated.

The District Court sided with Haven and in 2009 issued a nationwide injunction against the cap. The court later stayed the injunction pending appeal.

The three-judge panel on Tuesday also sided with Haven, finding that the department's method of administering the cap goes against both federal law and Congressional intent.

"By choosing to count beneficiaries only in the year in which HHS 'anticipated' that the majority of hospice care would be furnished, it ignored Congress's clear statutory mandate," wrote Judge Cynthia Holcomb Hall for the court. Judge Hall wrote the unanimous opinion just before her death in February.

"The regulation is at odds with the plain language of the statute in that it omits the individualized, proportional allocation calculation expressly called for in the statute, and substitutes an 'alternative' that HHS considers more convenient and less burdensome," Hall added. "Indeed, when HHS first proposed the challenged regulation in 1983, it acknowledged as much."

As for the nationwide injunction, the panel found it to be "more burdensome to the defendant than necessary to provide complete relief to the plaintiff before the court."

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