Hospice Cap Rule Bites the Dust Before Another Court
Tuesday, September 7, 2010
A few more U.S. district courts have declared the hospice cap regulation invalid because it is inconsistent with the statute on calculating the annual hospice cap. (See Compassionate Care Hospice v. Sebelius, No. 09-28-C (W.D. Okla. June 7, 2010); Tri-County Hospice v. Sebelius, No. 09-407-RAW (E.D. Okla. March 8, 2010); Hospice of New Mexico LLC v. Sebelius, 691 F. Supp.2d. 1275 (D.N.M. 2010); Lion Health Services v. Sebelius, 689 F. Supp.2d. 849 (N.D. Tex. 2010).)
In these cases, these Courts enjoined the U.S. Department of Health and Human Services (HHS) from applying the regulation to calculate hospice cap liability and demand repayment from these hospice providers. The common ground among these cases is the conflict between the statutory mandate that a provider’s number of beneficiaries for a fiscal year be reduced to reflect the proportion of hospice care that each beneficiary was provided in a previous or subsequent accounting year, and the regulation’s failure to allow for apportionment, instead assigning a beneficiary’s allocation for the year based only on the beneficiary’s date of admission.
According to the court in Compassionate Care Hospice, the inconsistency between the statute and regulations became problematic when the definition of persons eligible for hospice care changed to include patients suffering from diseases other than cancer, resulting in the addition of new patients to hospice care with longer lengths of stay per patient. These changes, among others, resulted in Medicare overpayment demands while the statute intended only to cap total Medicare reimbursement in a fiscal year for all of a hospice’s patients. These recent decisions bolster the ability of a hospice faced with an overpayment demand to pursue and seek a remedy, at least in the form of a preliminary injunction, to enjoin HHS from collecting on the repayment demand until further law is made or reconsideration occurs.

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