Towards a Fair Appeal: Rethinking Medicare Provider Agreement Termination Appeals

• Author: Dexter R. Golinghorst
• Position: J.D. Candidate, The University of Iowa College of Law, 2019
• Pages: 353-383

353

Towards a Fair Appeal:

Rethinking Medicare Provider Agreement

Termination Appeals

Dexter R. Golinghorst*

ABSTRACT: Medicare is a significa nt contributor to the health ca re system

in the United States. In order to deliver c are, the Centers for Medicare and

Medicaid Services (“CMS”) contracts wi th providers using “provider

agreements.” CMS enforces its reg ulations through a survey review p rocess,

which may result in a notice of termination of the p rovider agreement for

noncompliance. Currently, providers ca n appeal to an Administrative Law

Judge; but, the termination proceeds anywa y, regardless of whether or not an

appeal decision has been issued. This ha s created chaos for providers, who are

forced to attempt to secure a tem porary restraining order against CMS, which

often fails, or to try to avail themselves o f the protection of bankruptcy la w.

This appeals process is inadequate to e nsure that providers are able to tr uly

exercise their right to an appeal. With out a means to stay termination of the

provider agreement while waiting for an appeal decision, providers face th e

harsh reality that even if they win their appeal, th ey may have already felt the

consequences of a terminated ag reement. Under the current system, a provider

may be forced to close because of their t erminated agreement only to find o ut

they were correct after an appeal d ecision issued months after the impact of

the termination has already been felt. This possibility alone demand s

modification of the Medicare provid er agreement appeals framework. Thi s

Note argues that the statutory framework establ ishing the process for Medicare

provider agreement appeals should be am ended to include a stay of

termination until an appeal decisio n is issued.

I. INTRODUCTION ........................................................................... 354

II. MEDICARE PROVIDER AGREEMENT FRAMEWORK .......................... 356

* J.D. Candidate, The University of Iowa College of Law, 2019; Master of Health

Administration Candidate, The University of Iowa College of Public Health, 2020; B.A., The

University of Iowa, 2016. I would like to thank my family for their unending support in my

educational endeavors, and the s taff of the Iowa Law Review for their excellent advice du ring the

editing process.

354 IOWA LAW REVIEW [Vol. 104:353

A. BRIEF HISTORY OF MEDICARE ENACTMENT .............................. 356

B. MEDICARE REQUIREMENTS AND REGULATIONS ........................ 357

C. TRACKING CURRENT STATUTORY APPEAL RIGHTS FOR

QUALIFYING MEDICARE PROVIDERS UNDER MEDICARE .............. 362

III. THE SCRAMBLE TO SAVE THE PROVIDERS’ AGREEMENT ............... 365

A. SPLIT AMONG COURTS GRANTING TROS AGAINST CMS........... 365

B. PROVIDER ATTEMPTS TO USE BANKRUPTCY LAW FOR

PROTECTION ......................................................................... 368

1. Bankruptcy Law’s Automatic Stay ............................... 369

2. Bankruptcy Protection is Not an Adequate

Solution ........................................................................ 370

IV. A STATUTORY SOLUTION ............................................................ 377

A. IMPLEMENTING A STAY PENDING APPEAL ................................ 377

B. THE STATUTORY SOLUTION IS SUPERIOR TO

ALTERNATIVES ...................................................................... 380

V. CONCLUSION .............................................................................. 382

I. INTRODUCTION

Medicare provides protection and health care coverage for 44 million

Americans.1 This represents 15% of the total population of the United States,

mainly including those 65 years of age and older.2 This number is projected

to reach a striking 79 million by 2030, which will create substantial

“administrative and fiscal challenges to the system.”3 But, the federal

government does not provide any actual care; it only pays for it.4 Thus,

Medicare requires agreements betwe en providers and the Centers for

1. BEN UMANS & K. LYNN NONNEMAKER, AARP PUB. POL’Y INST., THE MEDICARE BENEFICIARY

POPULATION 1 (Jan. 2009), https://assets.aar p.org/rgcenter/health/fs149_medicare.pdf.

2. Id. at 2 (“A little more than half of current aged Medicare enrollees are between the ages

of 65 and 74, though the older segments of the population are growing. Today, indi viduals over the

age of 85 account for a little m ore than 10 percent of the total Medicare populati on, but their use

of Medicare services and their overall impact on the prog ram are substantial.” (footnotes omitted)).

3. Id. at 3 (noti ng this figure is “more than double the year 2000 enr ollment”).

4. This Note does not address any services or agreements of the Veterans Administration,

which acts as both payer and provider of medical care.