Maximum Comfort Loses CMN Decision on Government’s Appeal

REDDING, Calif.–A federal appeals court has overturned a lower
court’s ruling that held a certificate of medical necessity was
sufficient for Medicare to pay a claim for a power wheelchair, but
the plaintiff in the case says he’ll appeal the new ruling all the
way to the U.S. Supreme Court.

Tom Lambert, owner of Maximum Comfort in Redding, Calif., said
Friday he would exhaust every legal option open to him. “I’m not
going to throw in the towel now,” he said, adding that he and his
attorney, Bart Fleharty of Wells Small and Selke in Redding are
trying to figure out “whom to complain to now.”

The ruling, issued Dec. 21 by the U.S. Court of Appeals for the
Ninth Circuit, maintains that other documentation may be required
by Medicare in order for a provider to be reimbursed. That ruling
negates a June 2004 opinion by the U.S. District Court for the
Eastern District of California that Medicare could not require
Maximum Comfort to submit more documentation beyond a CMN for
reimbursement of a power wheelchair. The court in that decision
said Medicare could not require suppliers to obtain beneficiaries’
medical records or to make judgments about whether equipment was
medically necessary.

The Ninth Circuit court, however, said the CMN was not required
and its information was limited. Referring to a Medicare Act
subsection about CMNs, it states: “The subsection does not state
that the certificate of medical necessity is the sole vehicle for
claims reimbursement, nor does it state that a completed
certificate, establishes, by itself, a right to reimbursement.

“We conclude,” the new opinion reads, “that the applicable
provisions of the Medicare Act do not make the certificate
conclusive and that the [Secretary of the Department of Health and
Human Services] may require additional documentation to establish
medical necessity. We accordingly reverse the decision of the
district court.”

The ruling was a disappointing one for Lambert, who started his
fight in 1999. At that time, a claims audit by the then-Region D
DMERC determined that Maximum Comfort had failed to submit
documentation in addition to the CMN to prove medical necessity for
K0011 chairs. Post-payment auditors concluded that the provider
owed Medicare $785,000. (See
HomeCare, August 2004.)

After the company appealed, two administrative law judges ruled
in Lambert’s favor, saying that, for the supplier, the CMN was
indeed the only medical record necessary, but the Medicare Appeals
Council subsequently reversed those decisions. Lambert then filed
suit against the Department of Health and Human Services, and the
case ended up in U.S. District Court for the Eastern District of
California, where he won the decision that was just overturned.

Ironically, the issue itself is moot because CMS has since
revised its requirements for PWC reimbursement, and a CMN is no
longer necessary.

Indeed, said Lambert, that is likely to be a basis for an
appeal, since attorneys for HHS argued that the CMN was an optional
document, not a mandatory one.

“That was true as of June 1999,” Lambert said. But the claims in
question ran from 1998 to June 1999 and thus did not fall under the
new rules. “They are taking the new rules and trying to apply it to
old business,” he said.

The new opinion also says that Maximum Comfort is not “excused
from liability.” That means Lambert might ultimately have to repay
Medicare, but how much is a big question mark. “I don’t have a
clue,” he said.

In the past nine years, he has already lost his home, reduced
his business and filed for bankruptcy while contesting the original
post-payment audit. But Lambert says things are better these days
because he chose to fight Medicare.

“You know what the rules are now. I think the dealers are safer
today than when we thought the CMN was it,” he said.