A California Federal District Court has ruled that a supplier
need only use a certificate of medical necessity (CMN) to provide
information for the determination of medical necessity for Medicare
power wheelchair claims. The court further concluded that the
Secretary of Health and Human Services (HHS) cannot require that a
DME supplier obtain Medicare beneficiary medical records and make a
judgment about whether the equipment provided is medically
necessary and reasonable. (Maximum Comfort v. Thompson, E.D.
Cal., No. S-03-1584 LKK/PAN, 6/30/04).
While the court's ruling is only binding in the federal Eastern
District of California, it is significant in that it is the first
time that a federal court has held that the CMN provides all the
medical necessity information to prove that a beneficiary meets the
Medicare coverage requirements for power wheelchairs.
The case was brought by Maximum Comfort, Inc., a California DME
supplier that had been subject to two audits by the Region D DMERC
that resulted in overpayment determinations. The DMERC concluded
that medical necessity had not been established because the
supplier had failed to provide sufficient medical information,
including medical records.
The federal district court rejected the government's three
arguments why it had the authority to require the supplier to
obtain the medical records and submit them to the DMERC to
substantiate medical necessity. The government argued (1) that,
because it had the authority to determine the criteria for medical
necessity, it could determine the mechanism by which suppliers
prove that medical necessity; (2) that the CMN is insufficient to
provide the required information for medical necessity because
Congress restricted the information that suppliers can provide on
the form; and (3) that the supplier was required to submit
additional medical necessity information because the CMN does not
require sufficient information to address all the coverage criteria
for power wheelchairs. The court responded to this last argument
that the government could cure this deficiency administratively by
adding more questions to the CMN.
Following are important points about the case and its
implications:
The court's decision supports the industry's long-standing
arguments that the government's requests for medical records to
substantiate medical necessity for power wheelchairs are overly
burdensome on suppliers, impractical and that they require the
supplier to second-guess the physician's professional medical
judgment.
The court's decision is binding upon other cases brought in
the same California eastern district. When pursuing appeal
rights, suppliers in that geographic area can cite this decision to
support the argument that the CMN provides sufficient information
to demonstrate medical necessity and that suppliers are not
required to provide medical records.
While other federal district courts are not required to
follow the court's ruling, they may be influenced to use
similar reasoning to reach the same conclusion.
Suppliers who have been subject to the same requirement of
providing physician medical records to document medical necessity
should contact their senators and representatives to alert them to
the case; the fact that a federal district judge made this
ruling is significant.
Suppliers should still ensure that they have documentation to
substantiate medical necessity in the event of an audit. The
district court's ruling does not change or necessarily impact
current Medicare policy, which allows the DMERCs to request
additional documentation — including medical records —
to be provided to document medical necessity in the event of a pre-
or post-payment review or audit.
The federal government is likely to appeal this case to
the Federal Ninth Circuit Court of Appeals.
For more on this court decision, see “Headline
News,” page 12.
A specialist in health care legislation, regulations and
government relations, Cara C. Bachenheimer is vice president,
government relations, for Invacare Corp., Elyria, Ohio.
Bachenheimer previously worked at the law firm of Epstein, Becker
& Green in Washington, D.C., at the American Association for
Homecare and the Health Industry Distributors Association. You can
reach her by phone at 440/329-6226 or by e-mail at cbachenheimer@invacare.com.
