Court Refuses to Intervene in Medicare Payment Suspension

The U.S. District Court for the District of Missouri decided not to require the Centers for Medicare & Medicaid Services (CMS) to make a final determination on a provider’s suspension from the Medicare Program on the basis that such decisions are solely within the discretion of CMS

[Naushad v. United States Department of Health and Human Services, No. 4:20-CV-00018 JAR (E.D. Missouri May 29, 2020)]. Dr. Abdul Naushad owned a clinic called Advanced Pain Center (APC) that provided pain management services to Medicare beneficiaries. Dr. Naushad was charged with federal offenses related to illegal importation and use of a foreign injectable drug known as Orthovisc that was not approved by the U.S. Food and Drug Administration (FDA).

 

CMS suspended Medicare reimbursement to APC through its contractor, AdvanceMed, based on credible allegations of fraud. The Notice of Suspension advised APC that it had the right to submit a rebuttal statement. The Notice said that CMS would make a decision within fifteen days of receipt of the rebuttal about whether to lift the suspension. APC submitted a rebuttal statement asking CMS to lift the suspension. AdvanceMed responded two days later and said that it was reviewing the rebuttal statement and that a final response to the rebuttal “would be forthcoming.” APC then submitted a supplement to its original Rebuttal Statement.

 

APC also followed up six times with AdvanceMed regarding the status of its request, asking for status updates and demanding a final decision about lifting the suspension. AdvanceMed continued to respond by telling APC that it was reviewing the Rebuttal Statement and that a final response would be provided in addition to the interim response that was already provided. APC continued to submit letters and additional evidence to CMS and AdvanceMed to consider.

 

Approximately four months after payments were suspended, APC filed suit asking the Court to order CMS/AdvanceMed to provide a final decision about continuing the suspension of payments. The Court ruled against APC. According to the Court, APC is not entitled to a final determination about its suspension because CMS has no obligation to make any final determinations or lift suspensions before the investigation of providers is resolved, including any pending civil or criminal actions. Decisions to suspend payments or to continue payment suspensions, said the Court, are made at the sole discretion of CMS.

 

Further, the Court said that the length of suspensions is not limited to fifteen days. Suspensions based on credible allegations of fraud may last until the resolution of underlying investigations. Providers’ rights to appeal are triggered by overpayment determinations; not by decisions to continue or lift suspensions after consideration of rebuttal statements submitted by providers. The Court said that it would not upset the “balance” between hardship resulting from delays in administrative processes and the potential for overly casual or premature judicial intervention in administrative systems that process millions of claims every year.

 

There is definitely something wrong with this picture! Whether or not the allegations against providers are true, CMS “wins” because few providers have the financial resources to withstand suspension of payments from the Medicare Program for months at a time. The only option for many providers is to close their doors. Providers should surely receive more due process before such devastating losses take effect.

 

 

©2020 Elizabeth E. Hogue, Esq.  All rights reserved.

Elizabeth HogueCourt Refuses to Intervene in Medicare Payment Suspension
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