Healthcare Litigation

Quality Reimbursement Services, has a 28+ year history of advocating for hospital rights and reimbursements. In addition to cost report and S-10 consulting, disproportionate share, crossover bad debt, SSI Disability Eligibility and 340B services – QRS is possibly best known for its work at the PRRB and in District Court. Whenever QRS sees an injustice or an error by the government that adversely affects US hospitals, a group appeal will be formed. Beginning with the landmark case of Loma Linda Medical Center vs. HHS back in 1992 , QRS has built a sterling reputation for representing client hospitals at the PRRB, District and the Supreme Court. The end result has been over $900 million in court settlements for client hospitals.

There’s still time to join a QRS group appeal.

QRS is compensated entirely on a contingency basis, so it costs hospitals nothing to join a QRS group appeal. QRS pays all up-front and filing costs. If the case is decided in favour of the providers, QRS negotiates a settlement with CMS for client hospitals. If the case is not decided in favour of providers, there is no fee/charge. Following is a brief history of QRS healthcare litigation. Note that QRS is still accepting hospitals who want to join the St. Francis Medical Center v. Azar group appeal as well as the Citrus(Wage Index) appeal (see both below). If you are interested in joining these appeals, simply contact us Click Here.

• Loma Linda Medical Center vs. HHS

QRS was the lead firm in this 1992 appeal that protested the manner in which SSI percentages were used in calculating DSH reimbursements. Up until this decision, hospitals had no way of knowing how SSI data was applied to their DSH calculations. Success in this appeal made it possible for providers to request their SSI information from CMS via a “Data Use Agreement” (DUA) and receive PSA reports. Providers have since been able to confirm or protest SSI percentages in their DSH calculations and reimbursements.

• In Re Medicare.

QRS represented over 130 hospitals (out of a total 667 plaintiffs) in this group appeal. The case was concluded in 2008 after more than 4 years of litigation, and resulted in a $666.1 million settlement for providers that participated in the group appeal.

• Cape Cod v. Sebelius.

Sometimes known as the Rural Floor Budget Neutrality Adjustment (RFBNA) Appeal, this decision in the DC Circuit Court of Appeals, found that CMS knowingly perpetuated an error in factoring the “Rural Floor Budget Adjustment” in calculating PPS payments. QRS represented over 200 hospitals in this group appeal, resulting in $190 million in reimbursements to client hospitals.

• 2-Midnight Rule.

The 2014 IPPS Final Rule changed the criteria for inpatient admissions, requiring the admitting doctor to determine if the patient needed a hospital stay lasting 2 midnights in order for the patient to qualify as an Inpatient. After being challenged by multiple lawsuits, CMS agreed to reimburse hospitals for shortfalls in 2014, 2015 and 2016 IPPS payments. The 2017 Federal Register increased IPPS payments for all Medicare hospitals by a factor of 0.6% (0.2% per year for each of the three years in dispute). However, QRS argued that hospitals should be reimbursed for interest on lost revenue over the course of payment shortfalls. A decision was reached in favor of providers, but only for lost interest.

• 1498R and 1498R1 or “SSI Systemic Errors”

QRS contended that CMS erroneously placed SSI “No Pay” and “Exhausted Days” in the Part A denominator for DSH calculations, thereby reducing payments to DSH hospitals. As a general business practice, QRS appeals this and many other issues automatically for all DSH clients – thereby preserving the hospitals rights to appeal the issues if/when the appeal is found in favor of providers. A favorable decision on 1498R has resulted in settlements totaling more than $85 million for 300 QRS Clients.

• Allina v. Sebelius (Allina I).

At issue, was the 2004 final rule that placed Medicare Advantage (Part C) days in the denominator of the DSH Medicare fraction, thereby diluting the value of the Medicare fraction and reducing reimbursements for most hospitals. Allina I challenged the rule on procedural as well as substantive grounds. The district court in Washington DC found that the rule was procedurally invalid because CMS did not provide fair notice changing the existing rule (which excluded Part C days from the fraction). The DC circuit agreed and vacated (invalidated) the 2004 rule. This victory for hospitals resulted in over $50 million for over 200 hospitals in the QRS group appeal.

• St. Francis Medical Center v. Azar.

Also known as the Predicate Facts/Standardized Amount Appeal, alleges that CMS erroneously calculated the 1981 standardized amounts (Federal rate) by failing to properly account for transfer cases in calculating the Federal rate. CMS used the “Predicate Facts” rule to dismiss any challenges to a rule already in existence. The Saint Francis decision in the DC Court of Appeals, held that “Predicate Facts” cannot be used to shield CMS from errors made in the past, but still affecting providers today. The Saint Francis case also mentioned errors in the cap on the number of full-time (FTE) residents eligible for reimbursement established in a previous year. By knocking-down the “Predicate Facts” rule, providers may appeal this issue as well. QRS organized a group appeal for the 2018 Federal Register, seeking reimbursements for the standardized amount issue – estimated to be 1% of DRG for all cost report years that can still be appealed. And until there is a final decision (if the Supreme Court decides to take the case), QRS will add hospitals to the group and appeal the issue on NPRs as they are released. There are currently 350 hospitals signed-up for this group appeal, and new hospitals may join the appeal up until a final decision is reached. Plans are also in the works to appeal the Predicate Facts/FTE Cap.

• Citrus HMA v Becerra

The 2020 Wage Index Final Rule changed the way CMS calculated the states Rural Floors, by excluding data from urban hospitals that reclassified to rural. This had the effect of lowering IPPS payments, and leaving hundreds of hospitals with Wage Indexes lower than the states Reclassified Wage Indexes. In 2022, the US District Court for the District of Columbia, in Citrus HMA v Becerra, found in favor of the plaintiff hospitals and remanded the case back to CMS. But instead of appealing the issue, CMS issued a new Wage Index Final rule in the 2024 Federal Register that reinstated pre-2020 calculations for establishing a state’s rural floor.

Plaintiff hospitals in the suit will be reimbursed accordingly. But all other hospitals that were damaged by the 2020 Final Rule must appeal the issue in order to be reimbursed for damages. Quality Reimbursement Services has identified over 500 hospitals that would most likely benefit from appealing the Citrus issue. To find out if your hospital would likely benefit from appealing the issue and the estimated value of your appeal, follow this link:Click Here Just fill out the form and submit.