Feds Whack New Hospital With a Catch-22

     LINCOLN, Neb. (CN) – A $38 million Nebraska hospital was denied Medicare certification for lack of inpatients, because an accrediting team arrived just as it opened, and it couldn’t accept Medicare patients yet, the hospital claims in court.
     The Kearney Regional Medical Center sued the Department of Health and Human Services on Wednesday in Federal Court.
     The privately owned regional hospital, with a catchment area of 300,000 patients, was certified by the state and has had a full staff of doctors and clinicians since it opened on Dec. 9, 2013. It was licensed by the state and treated 21 inpatients in December and seven outpatients, but could not treat Medicare patients yet because it was awaiting certification, the hospital says in the complaint.
     A national accrediting organization, the American Osteopathic Association, sent a team to the hospital on Jan. 13, 2014. The hospital had a full staff of 35. The AOA recommended it for accreditation on Feb. 7, 2014, and it admitted 20 Medicare patients and did 59 medical procedures on Medicare patients in the next two months.
     But on April 9, 2014, the Center for Medicare Services told it it did not qualify for the Medicare program because it had no Medicare inpatients when the AOA team was there.
     But the hospital could not accept Medicare patients then because the AOA team was visiting it to accredit it for Medicare, the hospital points out.
     “Defendants acted in an arbitrary and capricious manner and abused their discretion in determining that KRMC was not eligible to participate as a hospital at the time that CMS denied certification,” the complaint states.
     The hospital says the AOA team told it that its lack of patients during the visit would not be a problem, according to the complaint.
     It says a Medicare official has informed it that it is standard to deny certification to hospitals that have no inpatients on the day they are inspected, the hospital says it was never informed of that, nor is the information posted on any federal website.
     It points out that this policy, if it is a policy, puts new hospitals in quite a bind, as it requires them to admit patients and perform services for them before the hospital is allowed to do so.
     “The final decision is illogical and wholly unreasonable, as it ignores the reality of a $38 million hospital built and operating for the specific purpose of providing services to inpatients,” the complaint states. “Defendants applied the wrong test, and the final decision is otherwise not in accordance with the law.”
     Kearney Regional Medical Center seeks declaratory judgment that its denial of certification and reimbursement was arbitrary, capricious and a denial of due process. It also wants reimbursement for all the Medicare services it performed during the period when its certification was in limbo, and costs of suit.
     Its lead counsel is Patrick Barrett with Fraser & Stryker, in Omaha.

%d bloggers like this: