News from the Supreme Court on Medicare Appeals

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Well, Hello, everybody. This is Michael Miscoe with Miscoe Health Law, and this week’s topic is a little bit more on the edge of the normal day to day life. I try to give you, but there’s some things that came out of the Supreme Court lately and I’ve had a number of clients that have emailed about the Loper decision and the elimination of Chevron deference and what impact it’s going to have on Medicare.

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For those of you in the chiropractic community that are still foolishly billing Medicare under the belief that it’s a profitable venture should you ever get wrapped up in a post payment case you may or may not be thinking that the elimination of Chevron deference might be helpful.

So let’s start with talking about a Supreme Court principle that was established way long time ago, I think back in 70, 78, I believe, or 84. And it was a case it’s called the Chevron decision. And what happened in that case is that the government decided that Administrative agency interpretations of a statute and its own rules.

were entitled to deference by the court. Even if the court didn’t agree that they were interpreting a statute correctly or even interpreting their own regulations correctly the Supreme Court established in the Chevron case that the federal courts were to give deference. The administrative agency deference in that when it came to interpretation of their own rules or a statute.

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And there were exceptions, of course. A court could conclude first of all, I should mention that Chevron deference only applies when the statutory rule is ambiguous and ambiguity, means it’s capable of more than one reasonable meaning or reasonably capable of more than one interpretation.

And where ambiguity is found in the statutory provision and the administrative agency cures that ambiguity with regulation that’s where Chevron deference kicks in and the courts are to give the administrative agency deference, and it has ballooned well beyond those parameters over the last 30, 40 years to the point where challenging an administrative agency, is not likely to be a successful endeavor. For that reason. Two cases went up. One was called Loper. The other one was called Loper Bright Enterprises versus Raimondo and Relentless Incorporated by, versus the Department of Commerce. And those two cases went to the Supreme Court and they both challenged this notion that administrative agencies were entitled to deference, meaning they get a leg up.

And that And the way the case was determined the court said, hey, that takes the courts out of their core function in the separation of powers concept in, insofar as they’re not allowed to interpret the law anymore. The administrative agency is, and that, that shifts power from the judicial branch to the executive branch.

So if you’re into constitutional issues and look at the, the decisions, especially recently in terms of addressing the balancing of power between the three branches of government, fascinating stuff, but what it means to us is that administrative agencies don’t get that leg up anymore.

Now, the other part, one of the core components of Chevron, however is that it had to be a regulation that was promulgated under the Administrative Procedures Act. Now, the problem with that, that brings to the equation when we’re talking about Medicare appeals is the Social Security Act existed well before it was created in the 60s, and all of its regulations were created well before.

And interestingly enough, the Administrative Procedures Act followed the creation of the regulations that established the administrative appeal process and whatnot. For Medicare appeals under the Social Security Act. The Social Security Act is not subject to the Administrative Procedures Act.

Basically, the APA requires, notice and comment periods for rulemaking and all this other stuff. In Medicare, they incorporate that internally to their own regulations. They require that of themselves. Because it’s not subject to the Administrative Procedures Act, we could argue that Chevron deference.

And the elimination of Chevron deference in LOPER doesn’t technically apply. Now, the interesting thing is that in the Medicare appeal regs the courts the QICs, Qualified Independent Contractors Medicare Appeals Council, and the Federal District Court, Level 3, 4, and 5 of the appeal process, they are not required to follow LCDs.

And CMS program manuals. They’re internet only manuals. They are, however, required to give them deference and can deviate from them only where they can identify that guidance requires something that is contrary to a requirement in the statute of regulations. And it’s like a Chevron deference.

It’s built into the Medicare program. But. It’s not exactly the same the requirements for ambiguity and whatnot. But nonetheless I have one cases where I have shown such a departure from Medicare guidance, and it’s a T, Steve Hill to climb, but it is possible. So you have in the Medicare system something similar to Chevron deference, and it’ll be interesting to see that even though the Social Security Act is not subject to the APA, the logic of LOPER should still apply. Had recent cases where there was statutory ambiguity and, The government the Quicks the MAC, ALJs, they’ve all decided that the law says something different than what it actually says. Their interpretation is 180 degrees contrary to the legislative intent as established by the legislature in when they crafted the statutory provision. And I think the logic of LOPER, insofar as that administrative agencies and their contractors and whatnot are not entitled to deference, and we’re going to read and apply the law. Because the statute is primary. Even the regulations are if they do not properly interpret the statute, they can now get kicked out.

Outside of the APA, Chevron deference is it’s like a fog that the courts get used to applying, and it’s the administrative agency’s opinion, and I’m not going to upset that without a really good reason even in Medicare and I think the impact of this case will hopefully be to allow judges to do what they do under the law and interpret the statute, apply it, giving no deference to the administrative agency.

And if that actually happens, then that should make the process, at least when you get to the fifth level of appeal in federal court, which is very expensive to get to and go through. However, if you have a big case, it does suggest that maybe knowing that they’re not entitled to that deference, that maybe some of that will percolate downstream and we’ll start seeing more fair interpretations of the statute and regulations rather than politically driven outcomes that are just designed to save money for the Medicare program.

It’s an interesting decision. It may have an impact. It’s not going to have a direct impact, certainly immediately. I think the logic is sound and what we can hope for is that if you’re still billing Medicare, maybe that the impact of this decision will percolate down into the lower levels of appeal, but It certainly could have an impact in the federal district courts, but like I said that level of appeal is usually out of reach in a in a chiropractic appeal because it’s just not enough money to justify doing it.

Ultimately I’m not a big fan of Bill and Medicare. Not because it’s impossible to comply, but because it’s impossible to comply and still make a profit for the number of visits that they’re willing to pay you for. It creates a burden on the patient because they got to pay for the exam and x rays.

You can’t discount them. Otherwise, that’s a kickback. All these Medicare compliance things that we’ve talked about in the past, suggest that you probably shouldn’t be billing Medicare. But for those of you that still are, maybe you’re in a multidisciplinary practice our tool belt just got an extra tool in it.

But I won’t say that is, it’s the ultimate weapon. So hopefully that was interesting and helpful. If not you can wake up now and I’m done yapping about the law. Until next time, have a great day.


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