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Genesis Hospice Care, LLC v. Mississippi Division of Medicaid

Supreme Court of Mississippi

April 18, 2019

GENESIS HOSPICE CARE, LLC
v.
MISSISSIPPI DIVISION OF MEDICAID AND DREW SNYDER, IN HIS OFFICIAL CAPACITY AS INTERIM EXECUTIVE DIRECTOR OF MISSISSIPPI DIVISION OF MEDICAID

          DATE OF JUDGMENT: 01/23/2018

          HINDS COUNTY CHANCERY COURT. HON. WILLIAM H. SINGLETARY

          TRIAL COURT ATTORNEYS: LAURA L. GIBBES WILLIAM CLARK PURDIE JANET McMURTRAY RANDALL ELLIOTT DAY, III PHILIP JOSEPH CHAPMAN

          ATTORNEYS FOR APPELLANT: PHILIP JOSEPH CHAPMAN RANDALL ELLIOTT DAY, III JULIE BOWMAN MITCHELL

          ATTORNEYS FOR APPELLEES: JANET McMURTRAY LAURA L. GIBBES DION JEFFERY SHANLEY

          BEFORE KITCHENS, P.J., MAXWELL AND CHAMBERLIN, JJ.

          MAXWELL, JUSTICE.

         ¶1. Genesis Hospice LLC provided outpatient hospice care to Medicaid beneficiaries in the Mississippi Delta.[1] As a Medicaid provider, Genesis was required to "maintain auditable records that will substantiate the claim[s] submitted to Medicaid."[2] Because the hospice claims Genesis submitted were outside the norm, the Mississippi Division of Medicaid audited a statistical sample of 75 of the 808 billed claims. And what the multilevel audit revealed was that, of the 75 claims audited, 68 were not substantiated by the patients' records and thus were not eligible for payment.

         ¶2. To be eligible for hospice care, a patient must be certified by a physician as having a "terminal illness," defined as an expectation of death within six months if the disease follows its normal course. The auditing physicians specifically found that the patient records for the 68 rejected claims lacked sufficient documentation to support the given terminal-illness diagnosis and/or lacked documentation of disease progression.[3] Medicaid's statistician extrapolated that 68 of 75 unsupported claims represented a total overpayment of $1, 941, 285 for the 808 claims Genesis billed during the relevant time period. And Medicaid demanded Genesis repay this amount.

         ¶3. Medicaid's decision has been affirmed in an administrative appeal before Medicaid and by the Hinds County Chancery Court, sitting as an appellate court. On further appeal to this Court, Genesis essentially argues Medicaid unfairly imposed documentation requirements not found in the federal or state Medicaid regulations. Genesis instead insists the only requirement was a physician's certification that in his or her subjective clinical judgment the patient was terminally ill, which Genesis provided.

         ¶4. But the regulations are clear. A physician's certification of terminal illness is indeed required, but so is documentation that substantiates the physician's certification. Substantiating documentation is necessary when, as in this case, Medicaid conducts an audit. Without substantiation-or, to use the auditing physicians' terminology, without "objective clinical data supporting a terminal diagnosis and/or . . . supporting a progression of a terminal disease"-the auditors may reasonably conclude, as they did here, that hospice care was not in fact medically necessary.

         ¶5. Because Genesis' records failed to support 90 percent of its hospice claims, Medicaid had the administrative discretion to demand these unsupported claims be repaid. Therefore, we affirm.

         Background Facts and Procedural History

         I. Audit

         ¶6. In 2009, Medicaid ran a data analysis of all hospice claims paid during January 1, 2006, through December 31, 2008, for beneficiaries who lived longer than six months.[4] Medicaid was looking for billing aberrations evidencing overpayment. And Medicaid found many aberrations among the 808 line-item claims Genesis billed during this time frame. So Medicaid initiated an audit of a statistical sample of 75 claims billed for 30 patients.

         ¶7. These 75 claims were scrutinized at three levels-an internal audit by Medicaid, conducted by one of its staff nurses; a third-party audit by a reviewing physician; and a third-party audit by a three-physician peer-review panel.[5] What the panel ultimately concluded-after giving Genesis the opportunity to rebut its findings-was that the patient records did not support the medical necessity of the hospice care billed for 68 of the 75 claims.

         ¶8. Medicaid defines hospice as palliative care for terminally ill patients. PPM § 14.02 (Sept. 1, 2007). To be eligible for hospice, "the beneficiary must be certified as being terminally ill with a life expectancy of six (6) months or less, and there must be a documented diagnosis consistent with a terminal stage of six (6) months or less." Id. Moreover, there must be a plan of care and documentation of the beneficiary's terminal illness. PPM § 14.03 (Sept. 1, 2007). The panel's unanimous finding hinged on Genesis' failure to document "objective clinical information that corroborated the signed certification of terminal illness." (Emphasis added.) For two claims, both for Patient Doe, [6] no records were submitted. And for the 66 other uncorroborated claims, "the information presented in the records did not support a reasonable clinical expectation of death within 6 months time either because of insufficient objective clinical data supporting a terminal diagnosis and/or [because of] insufficient objective clinical data supporting progression of a terminal disease." In other words, for 68 of 75 of the claims, the patients' records did not substantiate the physician certification that the beneficiary was terminally ill, leading Medicaid to conclude hospice care was not medically necessary and thus not compensable.

         ¶9. Hospice providers "must maintain auditable records that will substantiate the claim submitted to Medicaid." PPM § 14.12 (Oct. 1, 2000). "If a hospice's records do not substantiate [hospice] services paid," the provider "will be asked to refund to [Medicaid] any money received for such non-substantiated services." Id. That is exactly what Medicaid did here. Based on the panel's conclusion that 68 of the 75 audited claims were not hospice appropriate, Medicaid's statistician estimated that, for the 808 line-item claims billed, Genesis was overpaid $1, 941, 285.[7] By letter on March 10, 2013, Medicaid demanded Genesis repay this amount.

         IV. Appeal

         ¶10. Genesis responded by requesting an administrative appeal. While that appeal was pending, Genesis ceased operating July 31, 2013. Following a hearing, the hearing officer recommended to affirm, which Medicaid did in October 2014.

         ¶11. In November 2014, Genesis further appealed to the Chancery Court of Hinds County. See Miss. Code Ann. § 43-13-121(1)(j) (Supp. 2014) (statutorily authorizing, after July 1, 2014, appeals of Medicaid's recoupment decisions to the Hinds County Chancery Court). While its appeal was pending before that court, Genesis was administratively dissolved in December 2014. Following the chancery court's January 2018 ruling to affirm, Genesis appealed to this Court.[8]

         Issues ...


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