21 TENNESSEE PHYSICIANS FILE LAWSUIT AGAINST FEDERAL GOVERNMENT TO

OVERTURN ARBITRARY RULE, STOP RECOUPMENT OF PAYMENTS

Physicians appropriately used increased payments to
expand services, locations, hours in underserved communities
Nashville, Tenn., (October 31, 2016) Primary care physicians from across Tennessee jointly filed a federal
lawsuit today to stop efforts to reclaim more than $2.3 million in Medicaid payments made to the physicians to
encourage them to expand their practices in underserved areas in 2013 and 2014. The physicians predominantly
serve rural communities and disadvantaged populations, including Medicaid participants, and provide vital
services in areas with limited access to medical care.
The lawsuit, filed by 21 physicians in the U.S. District Court of the Middle District of Tennessee, seeks to overturn
a rule made by the Centers for Medicare & Medicaid Services (CMS) and stop efforts to recoup the funds by
TennCare, the states Medicaid program. CMS required TennCare and all other state Medicaid agencies to audit
physicians who received these payments. In total, TennCare is demanding repayment from more than 100
physicians. Physicians who received these payments in other states may eventually face similar claims.
We acted just as Congress intended in passing the law by expanding hours, services or locations to meet the
needs of the underserved communities we practice in and then the federal government tried to take the money
back because we didnt meet an arbitrary standard set by bureaucrats, not Congress, said Dr. William Rodney,
founder of the clinic that employs plaintiff Dr. Rickey Carson. With the payments, Dr. Carsons practice in
Memphis, Tenn., opened an outreach clinic for bilingual uninsured patients, expanded hours to weekends and
upgraded other services. About 90 percent of the clinics patients are covered by Medicaid.
The Tennessee Medical Association, the states oldest and largest professional association for physicians, is
financially supporting the lawsuit to further TMAs interest in promoting access to healthcare for underserved
populations, and advocate for Tennessee physicians against bait-and-switch tactics that could be financially
devastating to some small medical practices. CMS is blatantly overreaching its authority and misinterpreting the
intent of Congress, said Yarnell Beatty, TMAs vice president of advocacy and general counsel. These arbitrary
actions by CMS punish doctors trying to do the right thing and put some of Tennessees most underserved
populations and communities at even greater risk. This is a significant public health issue, and we are confident
the court will do what is best for these communities.
CMS Rule Arbitrary, Contrary to Statute
The complaint focuses on 42 U.S.C. 1396a(a)(13)(C) (Medicaid Enhanced Payment Statute). The intent of the
U.S. Congress in passing the statute was to entice physicians to expand necessary healthcare services in
underserved areas. The statute established increased Medicaid payments for any physician with a primary
specialty designation of family medicine, general internal medicine, or pediatric medicine in these underserved
areas.
The 21 physicians bringing the federal lawsuit satisfy this requirement set by Congress, yet CMS arbitrarily added
a second requirement through the regulatory rulemaking process. Under the rule, CMS requires physicians either
to be board certified or to bill 60 percent or more of the Medicaid codes he or she has billed within certain
specified billing code categories.
Many of the plaintiff physicians began practicing medicine before board certification became common for licensing
or hospital privileges. In addition, several of the plaintiff physicians fell short of the arbitrary 60 percent billing code
threshold only because their offices provide ancillary services, such as lab tests, that increase convenience to
patients. Similar services in better-served areas are more often provided in dedicated labs.
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CMS then required state Medicaid agencies to audit the physicians who received the payments to ensure they
met this now-two-part test, according to the complaint. TennCare was the entity in charge of auditing the
physicians to CMS standards and is ultimately responsible for enforcing the recoupment. Separately, the
physicians are seeking a stay on their consolidated TennCare Provider Appeal currently pending before the
Commissioner of the Tennessee Department of Finance and Administration.
Rule Unfairly Impacts Patients
To best serve the patients in our small community, our office used the increased reimbursements to hire a
bilingual nurse to better communicate with Spanish-speaking patients, providing a badly needed alternative to the
emergency room, said Dr. Clarey Dowling, of Brownsville, Tenn., who has practiced medicine for almost 40
years. About 60 percent of his patients are covered by TennCare. We also invested in hiring an internal medicine
specialist to provide expertise in preventive medicine and to educate patients on the treatment and prevention of
chronic illnesses like diabetes.
Unfortunately, we couldnt afford to keep these vital providers on staff once we were facing the prospect of
having to repay funds we received two years ago, Dr. Dowling added.
The impact of this arbitrary rule on these mostly small-town, rural physicians who were trying to do the right thing
for their patients is borderline catastrophic, said David A. King, an attorney with Bass, Berry & Sims PLC.
Despite numerous warnings and simple appeals to common sense by many, including the Tennessee Medical
Association and several state Medicaid agencies, CMS has continually failed to consider or respond to comments
about how these arbitrary requirements would impact well-meaning family doctors and the underserved patients
they care for.
The lawsuit was filed by attorneys from Bass, Berry & Sims, headquartered in Nashville with offices in
Washington, D.C., Memphis and Knoxville, Tenn. King, leader of Bass Berrys Managed Care Strategy &
Disputes Team, notes that patients and physicians in many other states ultimately could be affected by this case.
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For more information, including a copy of the lawsuit, contact:
Ellis Metz Jarrard Phillips Cate & Hancock, Inc.
615-254-0575
emetz@jarrardinc.com
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