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From Health Law Daily, November 4, 2015

Narrative requirement for reimbursement was reasonable (even though it no longer exists)

By Kayla R. Bryant, J.D.

HHS’ requirement that physicians document an explanation of why homebound patients are in need of home health services in addition to simply documenting that a face-to-face encounter occurred, referred to as a “narrative requirement,” is not an overreach of its authority provided by the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The U.S. District Court for the District of Columbia granted summary judgment in favor of HHS in a case filed by the National Association for Home Care & Hospice (NAHC) protesting this narrative requirement. HHS eliminated the narrative requirement in November 2014, but the requirement still applies to claims filed before that change (National Association for Home Care & Hospice, Inc. v. Burwell, November 3, 2015, Cooper, C.).

Narrative requirement. The ACA modified the requirements for home health services seeking Medicare reimbursement. Physicians originally only needed to certify that home health services are needed because the patient is confined to the home, a physician established and periodically reviews the plan for services, and services were furnished while the patient was under a physician’s care. Congress added the requirement that a physician have an in-person encounter with the patient in section 6407 of the ACA.

HHS’ regulation required the face-to-face encounter to occur no more than 90 days before or within 30 days of the start of home health care (42 C.F.R. section 424.22). What became known as the “face-to-face narrative requirement” also stated that the physician’s initial certification must include “an explanation of why the clinical findings of such encounter support that the patient is homebound and in need of either intermittent skilled nursing services or therapy services.” NAHC (representing 6,000 home health agencies) stated that HHS routinely denies reimbursement for an insufficient explanation, despite the fact that a face-to-face encounter has occurred and the patient meets other required standards. NAHC filed suit against HHS in June 2014, asserting that the requirement violated the ACA’s authorization provision. HHS removed the narrative requirement in November 2014 in order to ease the administrative burden, but claims that were filed before this regulatory adjustment are still subject to that requirement.

Chevron analysis. Courts review an agency’s administration of a statute under a two-part framework. First, courts determine whether Congress foreclosed the statutory interpretation the agency has chosen. If the interpretation falls within the range of possibilities due to the ambiguity of the statute, courts will question whether the agency’s interpretation is permissible.

Documentation requirement. The court noted that the ACA requires that a physician document that a face-to-face encounter occurred. HHS interpreted “document” as including an explanation of why the patient needs home health care. NAHC argued that the statute’s plain language simply requires documentation that the encounter occurred without further explanation, and that the regulation is inconsistent with this plain language. HHS argued in return that the interpretation is reasonable because it furthers Congress’s interest in reducing fraud and abuse. The court agreed with HHS’ reasoning, and found that “Congress likely intended the encounter itself to relate to and focus on the patient’s homebound status and need for home-health services.” The court found that the first step of the Chevron test was satisfied. This same reasoning also served to satisfy the second step of the Chevron test, as HHS had a reasonable explanation for why it imposed the requirement.

The case is No. 14-CV-00950 (CRC).

Attorneys: William Alexander Dombi (Center for Health Care Law) for National Association for Home Care & Hospice, Inc. Justin Michael Sandberg, U.S. Department of Justice, for Sylvia Burwell, Secretary, U.S. Department of Health and Human Services.

Companies: National Association for Home Care & Hospice, Inc.; U.S. Department of Health and Human Services

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