General Medicine Files Suit Against HHS, Seeking Review of Katrina-Era Overpayment Demands

General Medicine, P.C., (General Medicine) has filed suit against Xavier Becerra in his position as Acting Secretary of the Department of Health and Human Services. The suit comes after years of litigation and is directly related to two contested decisions where the Medicare Appeals Council and an Administrative Law Judge ruled against General Medicine. General Medicine is requesting that those two decisions be vacated in their entirety.

General Medicine is a “post-hospitalist company that employs board certified physicians and nurse practitioners who specialize in the care of patients residing in post-acute, long-term care and assisted living facilities.” In 2010, the Centers for Medicare & Medicaid Services (CMS) conducted a post-payment audit of prior claims that had been submitted for coverage by General Medicine. The result of the audit was a decision by CMS that out of 90 randomly selected claims, the majority of them had been overpaid. From here, CMS “extrapolated the statistical sampling of the overpaid claims which resulted in an overpayment demand amount of $804,653.00”

The claims reviewed by CMS consisted almost entirely of services given to residents in long-term care facilities in Louisiana before, during, and after the devastation of Hurricane Katrina. General Medicine appealed the overpayment demand by CMS, citing that it is counterintuitive that an overpayment demand be made for services which Medicare was created to provide.

The appeal eventually led to a Request for Hearing, which would take place before an Administrative Law Judge (ALJ). After a waiting period of 2 years, the ALJ notified the plaintiff that the request for hearing was denied due to the plaintiff’s failure to send copies of the request for the hearing to all of the parties/beneficiaries of the case, of which there were 73. General Medicine asserted that it was unnecessary for them to complete this since they had not been required to in earlier litigation.

In 2016, the ALJ dismissed the appeal of the overpayment demand entirely due to the plaintiff’s failure to “serve the 73 beneficiaries.” General Medicine then appealed the dismissal, claiming that “the beneficiaries are not ‘parties’ to the appeal as defined by Medicare regulations because Plaintiff was appealing on its own behalf,” and that “if the beneficiaries were ‘parties,’ then the QIC would have been required to serve them with its decision, which it did not do.” They further cited previous rulings and pointed out that the cases’ seven-year delay rendered any minor delay of notice meaningless.

The Medicare Appeals Council (MAC) ruled against General Medicine in the appeal, which the plaintiff claims was a decision they came to absent of any analysis. MAC contended that it was necessary for the beneficiaries to be served copies of the request. General Medicine is now appealing and challenging both the ARJ and MAC rulings, and ultimately requesting that the Court “vacates the decision of the Medicare Appeals Council and remand this matter to the ALJ to complete the hearing on the Plaintiff’s appeal of the overpayment determination.”The plaintiff is represented by Seyburn Kahn.