Wheelchair and Walker Rentals, Inc. v. Azar

CourtDistrict Court, W.D. Texas
DecidedJuly 26, 2019
Docket3:18-cv-00340
StatusUnknown

This text of Wheelchair and Walker Rentals, Inc. v. Azar (Wheelchair and Walker Rentals, Inc. v. Azar) is published on Counsel Stack Legal Research, covering District Court, W.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Wheelchair and Walker Rentals, Inc. v. Azar, (W.D. Tex. 2019).

Opinion

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF TEXAS . EL PASO DIVISION WHEELCHAIR AND WALKER § RENTALS, INC., § Plaintiff, ; v. : EP-18-CV-00340-FM ALEX M. AZAR II, SECRETARY OF : THE UNITED STATES § . DEPARTMENT OF HEALTH AND § HUMAN SERVICES, - § . Defendant. :

ORDER GRANTING MOTION TO DISMISS Before the court is “Defendant’s Motion to Dismiss for Lack of Subject Matter Jurisdiction and Failure to State a Claim” [ECF No. 24], filed March 4, 2019 by Alex M. Azat Il, Secretary of the United States Department of Health and Human Services (“Defendant”); “Plaintiff's Amended Response to Defendant’s Motion to Dismiss” [ECF No. 27], filed March □ 22, 2019 by Wheelchair and Walker Rentals, Inc. (“Plaintif? and “Defendant’s Reply to Plaintiff's Opposition to Defendant’s Motion to Dismiss” [ECF No. 30], filed April 5, 2019.

_ This case arises from a billing dispute over Medicare payments for services rendered by Plaintiff. Plaintiff seeks injunctive relief to “suspend recoupment, refund the improperly recouped funds, and halt accrual of interest on the alleged overpayment amount until Defendant can provide an ALJ hearing in accordance with 42 U.S.C. § 1395ff(d).”!

} “Verified Complaint for Injunctive Relief and Attorneys Fees” (“Compl.”} 2 2, ECF No. 1, filed Nov. 6,

I. | BACKGROUND A. Medicare Act

In order to understand the issue in dispute, it is necessary to examine the Medicare Act, 42 U.S.C, § 1395 et seg. The Medicare Act was enacted in 1965 under Title XVIII of the Social Security Act.2 The Secretary of the United States Department of Health and Human Services (“Secretary”)-promulgates regulations for the administration of the Medicare program.’ Medicare Administrative Contractors (“MAC”) determine payment amounts for covered claims and reimburse the healthcare provider.4 In the event a healthcare provider is dissatisfied with a determination by the MAC, it may seek review of the determination pursuant to 42 U.S.C. § 1395ff “§ 1395ff”).° Section 1395ff prescribes a four-step administrative review process and permits judicial review following its completion.® In the first stage of review, the MAC conducts a redetermination of the assessed amount of overpayments.’ During the second stage of review, the healthcare provider seeks reconsideration by a Qualified Independent Contractor (“QIC”)}—a third-party contractor who “review{s] the evidence and findings” from the prior determination.*

742. U,S.C, § 1395 et seq. 3 Id. § 1395ff(a)(1). 4 Id. §§ 1395u(a), 1395kk-1{a)(4). □ 5 Id. § 1395fKb)(1)(A). ° Cumberland Cty. Hosp. Sys., inc. v. Burwell, 816 F.3d 48, 53 (4th Cir. 2016). 742 U.S.C. § 1395ff(a)(3); Cumberland Cty, Hosp. Sys., 816 F.3d at 53.

942 U.S.C. § 1395ff(c); 42 C.F.R. § 405.968. □

At the third stage, the healthcare provider may seek review of the QIC’s reconsideration in a hearing before an Administrative Law Judge (“ALJ”).’ In such hearing, the “parties may submit evidence... , examine the evidence used in making the determination under review, and. present and/or question witnesses.” Finally, the fourth stage consists of a de novo review of the ALJ’s decision by the Departmental Appeals Board (“DAB”).!! The DAB “shall conduct and conclude a review of the decision.”!” A decision by the DAB concludes the administrative review process.'* Dissatisfied healthcare providers may then seek judicial review in a United States District Court.!4 The Medicare Act provides deadlines for the completion of each stage of review. The first two stages of review require a decision within sixty days.!> In the event a deadline is not adhered to, the Medicare Act permits a healthcare provider to bypass—or “escalate”—1o the next stage of review.’ For instance, if the QIC fails to render a decision within sixty days, the healthcare provider may opt to “escalate” the review process by requesting a hearing before an ALJ” Ina similar fashion, ifthe ALJ does not conduct a hearing of the QIC’s redetermination

942 U.S.C. § 1395ff(d)\{(1); 42 C.F.R. § 405.1000, . , 0 42 C.F.R. § 405.1000. 1 42 U.S.C. § 1395ff(d)(2)(A). 2 Td. B42 C.F.R. § 405.1130. 4 42 U.S.C. § 1395ff(b)(1)(A). 'S Id § 1395ff(a)(3)(C)Cii). 16 See id. § 1395ff(c)(3)(C)\ii); id. § 1395ff(d)(3)(A); id. § 1395ff(d)(3)(B).

7 Id § 1395ff(c)(3)(C)Gi). When an appeal is escalated to the ALJ from the second stage of review, the ALI shall issue a decision within 180 days. 42 C.F.R. §405.1016. . 30

ninety days,'* the healthcare provider may “escalate” to the next stage and seek ieview by the DAB."® Ifthe DAB does not issue a decision within sixty days, a healthcare provider may opt for judicial review. Under 42 U.S.C. § 1395ddd(f)(1)(A) (“$ 1395ddd”), the Secretary may not recoup an alleged overpayment until review by the QIC is completed.?! In other words, § 1395ddd only suspends the recoupment of overpayments in the first two stages of review." There is no provision barring the recoupment of overpayments during the third and fourth stages of review?

B. Factual Background

Plaintiff is a durable medical equipment supplier who participates in the Medicare program." According to Plaintiff, it “derives some 70% of its total revenues from Medicare payments.”25 On June 29, 2016, Health Integrity, LLC—a Zone Program Integrity Contractor (“ZPIC”}—identified an overpayment in the amount of $2,449,631.40 for claims during the

18 fd § 1395£8(d)(1)(A). 19 Id § 1395ff(d)(3)(A). If the healthcare provider opts to escalate to review by the DAB in the event the ALI fails to conclude a hearing within ninety days, the deadline for the DAB to issue a final decision is 180 days. ‘42 CFR, § 405.1100(d). 20 49 C.F.R. § 405.11132(b). 142 U.S.C. § 1395ddd(A(}(A). □ 22 See id, 3 Seeid . . % Compl. 8 § 21. . . 5 Id at 8 922. .

period of September 30, 2012 to February 5, 2016.”° Plaintiff disputes this assessed amount of overpayment.’ . .

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Wheelchair and Walker Rentals, Inc. v. Azar, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wheelchair-and-walker-rentals-inc-v-azar-txwd-2019.