Palmetto Audio Notification

Nathan Baugh, Director of Government Affairs


Palmetto Audio Notification

The following message is directed to those RHCs who for many years submitted their RHC claims to Cahaba. This does NOT impact those RHCs who submit claims to other MACs. However, RHCs who submit claims to other MACs may want to read this message as a cautionary tale to make sure something like does not happen to you.

Earlier this week, approximately 1,000 Rural Health Clinics who submit their RHC claims through Jurisdiction J began receiving letters from Palmetto indicating that they received improper payments (overpayments) from Cahaba (the previous MAC) for services provided between 2014 and 2018. These overpayments supposedly occurred because the patients for whom these claims were submitted, were enrolled in a Medicare Advantage plan at the time the service was provided.

It appears that Cahaba (as Jurisdiction J MAC) failed to properly conduct a front-end edit of both Part A and Part B claims for several provider types, including RHCs. The result, according to Palmetto, is that thousands of claims were paid by traditional Medicare that should have been submitted to an MA Plan that was responsible for paying for the care of these Medicare beneficiaries.

Palmetto has identified thousands of improperly paid claims submitted by more than 1,000 RHCs in Jurisdiction J (nearly one quarter of all RHCs in the country). They are seeking recoupment for these improperly submitted claims.

Please note that we’ve heard from several RHCs indicating that there are major errors in the Palmetto list of “improper” claims for which they are seeking recoupment. There are claims that truly were appropriate for traditional Medicare or situations where the RHC itself had previously identified the improper payment and reimbursed the money and Palmetto does not seem to be aware of this resolution.

At this time, we are unable to offer any solutions but we would encourage you to review all of the claims that Palmetto has identified as being paid in error.

For all of those RHCs affected by this mess, we want to assure you that NARHC has been in touch with CMS and Palmetto and we are looking at ways to resolve this mess. Due to looming deadlines, we are pressing these officials to provide a solution sooner rather than later. we can assure you that this is being reviewed at the highest levels of the Center for Medicare and Medicaid Services and we have impressed upon these officials that some RHCs will have to close because under “timely filing” limits, they will be unable to submit these claims to the MA plan for payment. Many RHCs cannot afford that type of financial loss.

NARHC will continue to work with CMS and Palmetto to get this resolved. Our goal is to ensure that no RHC has to close because of this and that there is a way for RHCs to either keep the money they’ve been paid or allow the RHCs to resubmit these claims to the MA plan (i.e. waive timely filing) so they can get paid by the proper payer for the care they provided.

As we get more information, we will post this on the listservs (both RHC TA and NARHC News).

Nathan Baugh
Director of Government Affairs
(202) 544-1880