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Accident, Injury and Rehabilitation, PC v. Azar

United States Court of Appeals, Fourth Circuit

November 21, 2019

ACCIDENT, INJURY AND REHABILITATION, PC, d/b/a Advantage Health & Wellness, Plaintiff - Appellee,
ALEX M. AZAR, II, Secretary of the United States Department of Health and Human Services; SEEMA VERMA, Administrator for the Centers for Medicare and Medicaid Services, Defendants - Appellants.

          Argued: September 18, 2019

          Appeal from the United States District Court for the District of South Carolina, at Florence. Donald C. Coggins, Jr., District Judge. (4:18-cv-02173-DCC)


          Joshua Marc Salzman, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants.

          Robert Bruce Wallace, Stephen Daniel Bittinger, NEXSEN PRUET, LLC, Charleston, South Carolina, for Appellee.

         ON BRIEF:

          Joseph H. Hunt, Assistant Attorney General, Mark B. Stern, Rachel F. Homer, Civil Division, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C.; Sherri A. Lydon, United States Attorney, OFFICE OF THE UNITED STATES ATTORNEY, Columbia, South Carolina; Robert P. Charrow, General Counsel, Janice L. Hoffman, Associate General Counsel, Susan Maxson Lyons, Deputy Associate General Counsel for Litigation, Greg Bongiovanni, UNITED STATES DEPARTMENT OF HEALTH & HUMAN SERVICES, Washington, D.C., for Appellants.

          Before WILKINSON, NIEMEYER, and AGEE, Circuit Judges.

          Judge Niemeyer wrote the opinion, in which Judge Wilkinson and Judge Agee joined.


         According to the Department of Health and Human Services ("HHS"), healthcare provider Accident, Injury and Rehabilitation, P.C., d/b/a Advantage Health & Wellness ("Advantage Health"), was improperly paid over $6 million for Medicare claims it submitted over a four-year period that did not qualify for reimbursement. HHS began recouping the overpayments from current Medicare reimbursements payable to Advantage Health, even as Advantage Health pursued appeals of HHS's initial overpayment determination through the administrative process. Because hearings before administrative law judges ("ALJs") - the third level of review in the administrative process provided by the Medicare Act - are currently severely backlogged, Advantage Health contends that HHS's continuing recoupment of overpayments before completion of the severely delayed administrative process is denying it procedural due process.

         Advantage Health commenced this action in the district court, seeking injunctive relief prohibiting HHS from pursuing recoupment efforts until Advantage Health could challenge the recoupment amounts in a hearing before an ALJ. On Advantage Health's motion, the district court granted a preliminary injunction, enjoining HHS "from withholding Medicare payments to [Advantage Health] to effectuate recoupment of any alleged overpayments."

         On HHS's appeal, we conclude that the injunction entered in this collateral proceeding, which prohibits HHS from recouping overpayments in accordance with applicable law, was inappropriately entered because the delay of which Advantage Health complains could have been and still can be avoided by bypassing an ALJ hearing and obtaining judicial review on a relatively expeditious basis, as Congress has provided. See Cumberland County Hosp. Sys., Inc. v. Burwell, 816 F.3d 48, 52-53, 55 (4th Cir. 2016) (noting that the "comprehensive" and "coherent" administrative process afforded by Congress includes mechanisms by which, in the event of a delay, healthcare providers may bypass certain levels of administrative review and obtain judicial review in "a relatively expeditious time frame"). Because we conclude that this administrative review process does not deny Advantage Health procedural due process, we vacate the district court's preliminary injunction.


         Advantage Health is a South Carolina professional corporation that provides medical, chiropractic, and holistic care for patients in the Florence and greater Piedmont areas of South Carolina. Prior to 2015, it earned gross revenues of close to $6.8 million per year, with approximately one-third of that sum derived from Medicare reimbursements.

         Based on an analysis of Advantage Health's Medicare billings, the Medicare Program Integrity Coordinator for South Carolina, AdvanceMed, opened an investigation in September 2012 into Advantage Health's Medicare claims for reimbursement. That analysis indicated that Advantage Health had become "the top paid provider in South Carolina for physical therapy codes," but it did not appear to have sufficient growth in its patient population to justify its growth in reimbursement claims. Specifically, AdvanceMed found that "[f]rom 2010 to 2011, . . . the number of services [that Advantage Health] billed to Medicare increased 332%, and the amount paid to [it] increased 592% for a patient population that only increased by an additional 35 beneficiaries." A follow-up analysis conducted months later showed that nurse practitioner "Judy Rabon . . . a member of [Advantage Health], was paid more than $1.5 million for the years 2012 and 2013, averaging more than $5, 000 per beneficiary and billing more than 160 ...

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