Providers and their representatives received some good news recently in the courts! The U.S. Court of Appeals for the District of Columbia Circuit has invalidated CMS’s prohibition on appeals of so-called predicate facts. A predicate fact is a specific determination of an amount in the past that is used in the calculation of future fiscal periods reimbursement, such as a per resident amounts, resident caps, target amounts or base period amounts. Such facts are not reevaluated annually and may or may not be updated annually thereafter. The appeal before the court challenged the continued use of an allegedly erroneously calculated Federal rate from 1981. The court found that CMS’ so-called predicate fact regulation at 42 C.F.R. § 405.1885(a)(1) which was revised in 2013 does not apply to administrative appeals to the Provider Reimbursement Review Board. Previously, an error in one of a Providers predicate fact amounts would be carried forward indefinately. This new ruling will allow for the correction of real injustices our there and result in more equitable reimbursement amounts in all cases.
The court said that reopenings and administrative appeals are conceptually different, are governed by different statutory and regulatory provisions, and, most importantly here, are governed by different limitation rules. Because the court determined that the regulation does not apply to appeals at all, but only to reopenings, this opens the possibility of expanded provider litigation focused upon the correction of predicate facts.
