Federal judge: Primary-care doctors don’t have to pay back ‘Medicaid bump’ funds

Feb. 06--In a case that could set a national precedent, a federal court judge has ruled in favor of 21 Tennessee physicians who filed suit against the federal government when it ordered them to repay some Medicaid reimbursements.

The primary-care doctors filed the lawsuit in the U.S. District Court of the Middle District of Tennessee in November 2016, challenging the national Centers for Medicare and Medicaid Services' interpretation of a federal law, the Medicaid Payment Statute.

Doctors used the $2.3 million, part of the "Medicaid pay bump" written into the Affordable Care Act as an incentive for primary-care doctors to care for low-income patients, to expand or enhance services in underserved communities -- for example, adding hours or bilingual staff.

To qualify for the enhanced Medicaid reimbursement rates in 2013-14, doctors had to either be board-certified in family medicine, pediatrics or geriatrics, or if they were not board-certified, at least 66 percent of the claims they billed -- the number of claims, not the monetary value -- had to be for evaluation and management services or vaccinations, not labs or imaging tests.

But in 2015, CMS sent notices to 118 Tennessee doctors telling them they didn't meet those requirements and would have to pay back the incentive money. Thirty-three of them appealed.

The 21 doctors who opted to file suit argued that CMS was discriminating against them because they provided diagnostic labs or imaging in-house -- which they did because such services weren't readily available to the patients they served, either because they required a long drive, or because patients lacked the resources to get to them. Some of them said they assumed the 66 percent applied to the monetary amount of claims, not the actual number of claims filed.

On Jan. 24, a federal court judge agreed, ruling that CMS's regulation went against Congress' intent in the Affordable Care Act to improve access to care in underserved communities.

"We were a full-service clinic" in a neighborhood where many residents would have had trouble finding or getting to other lab services, said one of the plaintiffs, Dr. Jack King Jr.,

Before his King's retirement, he operated a private family practice in Mechanicsville, one of Knoxville's most medically underserved areas.

"To me, the government is trying to say if you're a patient in this area, you don't need the same services as another person gets," he said. "And yet they want physicians to serve in those areas."

CMS's attempt to "claw back" the money came after a federally mandated audit in Tennessee. Since Tennessee was one of the first states audited, this case, Averett vs. U.S. Department of Health and Human Services, could have ramifications in other states where CMS has notified physicians they need to pay back funds.

Law firm Bass, Berry and Sims PLC, who represented the physicians with the support of the Tennessee Medical Association, said some doctors who had to end services they used the extra funds to implement are now looking at bringing those back. Among them: Brownsville family practitioner Dr. Clarey Dowling, whom CMS had ordered to repay $200,000 he'd used to hire two Spanish-speaking nurses and a staffer trained to help patients manage diabetes.

"The risk of having to repay funds we received years ago forced us to end some of the steps we took to expand access, such as hiring an internal medicine specialist to improve our treatment and prevention of chronic illnesses such as diabetes," said Dowling, who said he initially had to lay off one of the bilingual nurses and couldn't renew the diabetes expert's contract.

Now, Dowling said, he may be able to reinstate those services.

The government has 30 days to file an appeal to the court ruling.

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