Special report on reimbursement. Medicare program abandons 1986 malpractice rule

Hospitals with claims "properly pending" before fiscal intermediaries or in the courts need do nothing in order to obtain corrected reimbursement for fiscal years so pending. However, to speed processing of corrected reimbursements for fiscal years pending in appeals before the PRRB, hospitals should request that the Board determine its jurisdiction and remand to the fiscal intermediary for payment as soon as possible. It will be helpful to include with any such request a copy of the notice of program reimbursement and the original appeal letter for each fiscal year under appeal. Despite the fact that HCFA Ruling 91-1 effectively concedes that HCFA has applied an invalid regulation to all fiscal years since May 1, 1986, HCFA counsel have stated that HCFA will not permit reopening of closed cost reports to correct the inappropriate apportionment of malpractice insurance costs. Nevertheless, hospitals that do not presently have a claim or appeal pending have several options. Under the Provider Reimbursement Manual, HIM-15, sections 2930-2931, fiscal intermediaries are required to reopen cost reports filed within the three-year reopening period to correct errors. Accordingly, should a fiscal intermediary deny a provider's reopening request, the provider should seriously consider taking an appeal to the PRRB. The PRRB's jurisdiction to review fiscal intermediary denials of requests to reopen cost reports was affirmed by the United States Court of Appeals for the Ninth Circuit, see State of Oregon v. Bowen, 854 F.2d 346 (9th Cir. 1988), a decision that is controlling in California, Oregon, Washington, Nevada, Arizona, Montana, Idaho, Hawaii, Alaska, Guam, and the Northern Mariana Islands.(ABSTRACT TRUNCATED AT 250 WORDS)