Ninth Circuit Court of Appeals Issues Decision on Reopening of Medicare Claims

On September 11, 2012, the United States Court of Appeals for the Ninth Circuit issued the long-awaited decision on Palomar Medical Center v. Sebelius, D.C. No. 3:09-cv-00605-BEN-NLS, concluding that a health care provider may not challenge a Medicare Recovery Audit Contractor’s (RAC) decision to reopen a Medicare claim. After noting that the Congressional intent in establishing the RAC program was to recoup Medicare overpayments from providers, the Court of Appeals held that the RAC’s decision to reopen a Medicare claim is not reviewable. Not only does the Palomar case preclude the ability of a provider to pursue an administrative appeal based on the “good cause” standard for a reopening, for those claims more than one year old, but the appellate decision also has broader application by suggesting that providers have no right to challenge a contractor’s decision to reopen and review older claims.

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