Source: https://www.medicaremedicaidblog.com/does-secretary-mac-who-authorizes-statistical-sampling/
Timestamp: 2019-04-26 04:04:13+00:00

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Gentiva Healthcare provides home health services to Medicare beneficiaries. In 2007, Gentiva’s MAC, Cahaba Safeguard Administrators, LLC, determined that there was “[a] sustained or high level of payment error” in claims filed by Gentiva. Cahaba conducted a post payment review of 30 of 1,951 claims submitted by Gentiva, found that 26 of the 30 claims were overpaid, and after extrapolating this result to the entire universe of claims, demanded that Gentiva repay Medicare $4,242,452.10. Gentiva appealed and argued that the clear language of § 1395ddd(f)(3) required the Secretary and not the MAC to determine whether there was a sustained or high level of payment error in Gentiva’s claims. During the administrative appeal proceedings, Gentiva was successful in having Cahaba’s overpayment decision overturned in 20 of the 26 claims and its alleged overpayment was reduced to about $850,000, but it was unsuccessful in its claim that only the Secretary could authorize the use of extrapolation. Gentiva appealed that decision to the United States District Court in Washington, D.C.
The District Court, in an opinion issued on April 6, 2012, held that the Secretary could delegate her authority to determine if “[t]here is a sustained or high level of payment error to a MAC. The District Court held that because 42 U.S.C. §1395kk(a) permits the Secretary to delegate her duties to Medicare contractors, it was not clear that Congress intended in § 1395ddd(f)(3) to limit the extrapolation decision solely to the Secretary. The Court concluded that since the statute was ambiguous and the Secretary’s interpretation reasonable, the Supreme Court’s decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. required the Court to uphold the Secretary’s decision. Gentiva’s June 6, 2012 appeal of the District Court’s decision (No. 12-5179) is pending.
The District Court’s conclusion that a MAC has the authority to decide when “[t]here is a sustained or high level of payment error” is premised upon its finding that the apparently straightforward language used by Congress in § 1395ddd(f)(3), i.e., “[u]nless the Secretary determines” is ambiguous. The Court did this by pointing to the apparent conflict between the language in § 1395ddd(f)(3) and the delegation language in § 1395kk(a). What the Court ignored, however, was the regulatory landscape at the time § 1395ddd(f)(3) was enacted, a landscape in which Medicare contractors had the authority to determine on their own if there was a sustained or high level of payment error and to conduct statistical sampling. It seems to me that in light of the procedures in place in 2003, a more reasonable interpretation of § 1395ddd(f)(3) is that Congress intended to limit the discretion then being exercised by the MACs by requiring the Secretary to determine whether statistical sampling was justified and that there is no conflict between the language in § 1395ddd(f)(3) and § 1395kk(a). I believe that the District Court’s failure to address this issue makes the validity of its conclusion suspect, an omission that will hopefully be corrected by the Court of Appeals.
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