Caring Hearts Pers. Home Servs., Inc. v. Burwell — June 2016 (Summary)

ADMINISTRATIVE LAW

Caring Hearts Pers. Home Servs., Inc. v. Burwell
No. 14-3243 (10th Cir. May 31, 2016)

The Court of Appeals for the Tenth Circuit ruled in favor of a home health agency and denied efforts by the Centers for Medicare & Medicaid Services (“CMS”) to recoup over $800,000 for services it claimed were not reasonable and necessary.  Interestingly, the court chastised CMS for being “unable to keep pace with its own frenetic lawmaking” and stated that “an agency decision that loses track of its own controlling regulations and applies the wrong rules in order to penalize private citizens can never stand.”

The home health agency offered physical therapy and skilled nursing services to homebound Medicare patients.  In an audit, CMS purported to find patients who didn’t qualify as “homebound” or for whom services rendered were not “reasonable and necessary.” However, to reach its finding, CMS applied regulatory standards that it adopted years after the supposed violations occurred.  The court’s analysis revealed that the standards applied by CMS were more demanding than the requirements that had been in effect in 2008, the time of the supposed violations.  When the court applied the proper requirements for the time period, it ruled to not sustain the agency’s decision.  Also, it found that the plain terms of the statute could not have independently alerted the home health agency to the impropriety of its care.

In conclusion, the court stated that an application by the home health agency for costs and fees under the Equal Access to Justice Act may be substantially justified.