Maine Medical Center sues federal official over nearly $3 million in unpaid medical claims

Posted April 04, 2013, at 5:21 p.m.

PORTLAND, Maine — Maine Medical Center has sued U.S. Department of Health and Human Services Secretary Kathleen Sebelius over nearly $3 million in unpaid medical claims for patients with government health insurance.

The outstanding bills date back a decade and cover treatment that the Portland hospital provided to patients covered by both Medicare and Medicaid.

The suit is unrelated to the current debate over $484 million owed to Maine’s hospitals under the Medicaid program, debt that dates back to 2009.

In the suit filed Tuesday in U.S. District Court in Portland, MMC said it was never fully paid for services provided to patients eligible for both Medicare and MaineCare, the state’s version of the Medicaid program.

With “dual eligible” patients, Medicare pays its share of the claim first, reimbursing hospitals for services that were provided. Then the claim typically “crosses over” to MaineCare, which helps low-income patients to afford their Medicare coverage by footing the bill for Medicare co-insurance and deductible expenses.

But in July 1999, MaineCare decided to stop paying such “crossover claims,” according to the suit. MaineCare sent health providers documentation showing zero payment for the claims, which providers could then furnish to the federal government to get paid through Medicare.

In MMC’s case, an “anomaly of unknown origin” prevented MaineCare from processing those crossover claims between November 2001 and August 2003, according to the suit. Because the claims were never processed, MMC wasn’t issued the zero payment documentation and couldn’t get reimbursed by Medicare.

A Medicare payment contractor rejected the hospital’s request for payment, according to the suit. The unpaid claims amounted to $1.1 million in fiscal year 2002 and $1.7 million in fiscal year 2003.

MaineCare still hasn’t been able to retrieve or process the claims, according to the suit.

MMC appealed the payment denial to an independent Medicare review board, which unanimously favored the hospital in a Nov. 29, 2012 decision.

The head of the Centers for Medicare and Medicaid Services, acting for Sebelius, then reversed the review board’s decision in early February, citing MMC’s lack of documentation. In the suit, MMC described the decision to reverse the review board’s ruling as “arbitrary” and “capricious.” The hospital asked the court to instruct CMS to uphold the review board’s decision.

An MMC spokesman did not immediately provide comment on the suit.

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