The Atlanta Journal-Constitution
Hospital started by FDR faces struggle to survive Dispute over Medicare billing halts crucial payments from feds.
Roosevelt Warm Springs Rehabilitation Hospital may have a grand history, and it may have disabled patients it helps to regain function. But it’s also just another rural Georgia hospital in danger of closing.
The facility established by Franklin Delano Roosevelt has filed an emergency request for a federal judge to rein in the agency that runs Medicare, saying the federal government’s actions put it close to financial ruin.
Lawyers for the hospital said the bureaucracy surrounding a disputed $585,000 in bills has cut off ongoing Medicare payments to the institution, payments that are the hospital’s lifeblood. Moreover, the hospital says, the government will likely take years to process the hospital’s appeal. By then, it will be too late.
A judge will hear arguments March 5.
“I would be heartbroken if it were to close,” said Beth Hadley, a County Commission member for Meriwether County, where the facility is located.
She had not heard about the dispute.
“Just the work they do is phenomenal,” Hadley said. “Lots of folks use their services. And the number of jobs they provide — good jobs.”
Warm Springs is a tiny town between Columbus and Atlanta. But it is known nationwide for the “Little White House” that FDR built there. The retreat, where he died, is now run as a historic site by the state.
Roosevelt, unusual in catching polio as an adult, came to the Warm Springs area initially because he had been told the mineral spring waters there had healing powers. They didn’t heal him, and for the rest of his life he could stand and walk only with braces and support. But he came to feel benefits from swimming in Warm Springs. In 1927, five years before he was elected president, Roosevelt bought the resort property and established a polio treatment facility. That facility evolved and was resold.
Now that vaccination has eliminated polio in the United States, the hospital, run by Augusta University Health, rehabilitates about 400 patients a year with a range of problems, including strokes and neurological and orthopedic conditions.
The hospital has its own debt, running at a $637,000 loss last year, it said. Managers attribute its struggle partly to rural Georgia’s health care voids. It’s located far from regular hospitals that typically are a source of patient referrals to rehab centers, and it treats a high number of patients who are on Medicaid and Medicare, which don’t pay much.
But, its lawyers said, the desperate situation now stems from cases the hospital billed to Medicare.
The agency that runs Medicare, the Centers for Medicare and Medicaid Services, or CMS, said the hospital billed the CMS for too much care in about 16 cases. The CMS says it shouldn’t have paid the improper bills, and now it wants the money back. It’s started withholding the hospital’s regular Medicare reimbursements until the “debt” is repaid, a process known as “recoupment.”
But what actually happened won’t be clear for years. That’s because CMShired auditors who identify overpayments are found to be wrong more than half the time when someone appeals.
That problem causes a domino effect. The audits are so problematic that appeals have skyrocketed, jamming the waiting list. The law guarantees hospitals an appeal to an impartial administrative law judge within 90 days, but the backlog stretches years. The federal government has investigated the backlog and made the CMS report on its progress, and yet the wait still takes years.
In the meantime, hospitals and treatment facilities cut down services or close down while waiting for their appeals.
“It’s an especially draconian measure in that if the facility is challenging the audit, they often complete recoupment before they exhaust their appeals,” said Anna Grizzle, a lawyer in Tennessee who represents facilities dealing with the federal process. After the appeals finally make their way through, when a facility gets the CMS auditor overturned, the government writes a check with interest. “That interest payment is frankly little comfort if the provider’s been put out of business,” she said.
Warm Springs hired its own auditor, who told it that the CMS auditor was wrong and that the hospital hardly owed anything. The hospital did get two chances at appeals within the CMS before the federal agency began keeping the money. The CMS said it hadn’t made a mistake. That CMS decision is where the recoupment begins.
But the appeal at the next level, before an independent administrative law judge, is one where hospitals really have a chance, experts said. Yet recoupment isn’t put on hold for that.
The hospital and lawyers who deal with such cases also point out that the CMS contractors have incentive to decide that the agency overpaid. In some cases the contractors are rehired on the basis that they’ve shown they can do a good job recognizing overpayments. In others, they’re paid a commission on whatever they said was overpaid.
Jimmy Lewis, whose business Hometown Health is a consultant to rural Georgia hospitals, said he hears from clients about Medicare recoupment clawbacks “on a regular basis.”
“Usually there’s not a lot of room for them to have any recovery,” he said. “The way those things work, you basically get a letter, it’s kind of their way or the highway.” And since many of the facilities often just have a few days’ cash flow in the bank, he added, “That can be a killer, there’s no question about it.”
Both Augusta University Health, which runs the Warm Springs hospital, and the CMS declined to comment, citing ongoing litigation.
A lawyer who researched Medicare recoupments for the Emory Law Journal, Maleaka Guice, said regulation surrounding recoupment has to be changed. In bankruptcies Medicare keeps taking money in spite of ongoing appeals even though all other creditors are put on hold, said Guice, who works with Grizzle.
But even if the rules are finally changed to put recoupment on hold through all levels of appeals, “they have got to get that backlog down,” Guice said.
“It’s a lack of due process to wait three to five years to go in front of a neutral judge,” she said.