Mid-Atlantic Health Law TOPICS

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Did You Know? Summer 2020

Extrapolation: Did you know that Medicare’s “extrapolation” method to determine the amount of an overpayment has been validated? A Medicare contractor audited a small sample of claims from a 2-1/2 year period submitted by Palm Valley Health Care Inc., a home health agency, and determined that Medicare overpaid more than half of the claims, totaling approximately $80,000 in overpayments. The audited claims were a small fraction of the thousands of claims Palm Valley submitted during that time. Medicare’s extrapolation resulted in the company owing $12 million. Though the company appealed the decision, a federal appellate court held that the extrapolation method was a valid way for administrative agencies to determine the extent of overpayments and related repayments when a valid sample from a larger pool of provider claims is available.

Hospital Corporate Negligence: Did you know that a South Carolina court has determined that a hospital is not liable to patients when a doctor practicing at the hospital has insufficient insurance coverage to cover medical malpractice claims? In McCord v. Laurens County Health Care System, two patients who suffered complications from surgery sued the hospital when the surgeon did not have sufficient malpractice prior acts or tail coverage to cover the claims, even though the surgeon had been insured at the time of the procedures. The court found that, neither a hospital bylaw requirement for members of the medical staff to maintain valid insurance coverage, nor the hospital agreeing to render services to the patients, made the hospital liable to the patients. Although this South Carolina court rejected the theory of hospital corporate negligence in this situation, courts in other states have sometimes reached the opposite conclusion.

Alexandria K. Montanio
410-576-4278 • amontanio@gfrlaw.com