Judge Rejects NAHC Face-to-Face Lawsuit

The validity of the so-called “face-to-face” rule has been upheld in federal court, much to the dismay of an organization representing around 6,000 home health care providers.

The National Association for Home Care & Hospice (NAHC) lost a lawsuit against the U.S. Department of Health and Human Services that challenged the validity of the now-obsolete physician narrative requirement in the physician face-to-face encounter rule.

If NAHC had won the lawsuit, home health agencies may have been paid a large portion of the $200 million to $250 million in claims that are presently in “limbo.”

However, the narrative requirement is not unreasonable, capricious or arbitrary, as it is a “reasonable way to verify that an appropriate encounter actually took place,” a federal judge ruled Tuesday.

In its lawsuit, NAHC argued that Medicare’s interpretation was unreasonable if the court found the statute to be ambiguous, as the interpretation resulted in claims denied based on the sufficiency of the narrative itself — even when the entire record of the patient supported Medicare coverage.

In his ruling, Cooper found that the face-to-face law enacted by Congress was ambiguous but did not foreclose the interpretation of the word “document” that the Centers for Medicare and Medicaid Services (CMS) set forth in its regulations.

NAHC also argued in its lawsuit that the statute limited the physician documentation to the date that the encounter happened. The court ultimately found that the word “document” in the statute was ambiguous, as it could include both a narrative of what the doctor found during the encounter and the date of the encounter.

Though Medicare rescinded the narrative requirement from its rule after NAHC filed its lawsuit in 2014, the agency has not given almost $200 million in retroactive payments to home health agencies that were wrongfully denied claims because of the now-defunct narrative requirement, according to NAHC.

Still, NAHC was not entirely dissatisfied with Tuesday’s ruling.

In a statement on its website, NAHC said the ruling “provides a crucial conclusion that can help home health agencies succeed in winning reimbursement in appeals of claim denials based on an ‘insufficient narrative.’”

Namely, the court determined that although a narrative requirement for documentation is a valid exercise of Medicare’s rulemaking power, Medicare cannot go beyond that narrative requirement and “second-guess the medical judgment of the patient’s physician” about the narrative content.

So, the documentation requirement is met if the physician narrative presents patient clinical findings and explains why those findings support the need for home health services.

“To the extent HHS may have veered from that requirement in practice, home-care organizations that have been denied reimbursement on the basis of insufficient documentation are free to contest HHS’s implementation of its rule on a case-by-case basis,” the judge said in his ruling.

NAHC said it is assessing the next best steps to take regarding the ongoing face-to-face requirements controversy.

Written by Mary Kate Nelson