Senior living firms engaged in a Medicare claims appeal currently are required to return any disputed payments right away. A recent court ruling, however, gives operators a chance to retain disputed amounts until an administrative law judge hears the case.

The U.S. Court of Appeals for the Fifth Circuit said Family Rehabilitation Inc. can go directly to court and challenge a Medicare contractor’s demand to repay a challenged payment before the appeal is resolved. Although the ruling here applies to a home health firm, attorneys said the precedent can be used by other senior living operators similarly challenged.

In this case, the provider received a letter demanding that it repay more than $7.8 million in excess payments. The operator countered that a two-to-five year wait for the case to be heard would mean insolvency. The appellate court agreed, ruling that in cases of undue hardship, providers should not be required to forfeit payments while a case is pending.