Medstrive Contests Medicare, Medicaid Suspension in Court

On Thursday a case was filed in the Eastern District of Texas by Medstrive, L.L.C, against Xavier Becerra as Secretary of the Department of Health and Human Services. The case concerns the suspension of Medstrive from the Medicare and Medicaid system under an allegation of fraud.

The plaintiff a supplier of durable medical goods, the complaint begins, which includes products such as wheelchairs, prosthetics, orthotics and other goods. However, in order to ensure that these goods are only ordered in circumstances of medical necessity, Medicare requires that the suppliers of these products receive a signed certificate of medical necessity (CMN) from the treating physician. In addition, the supplier must have a signed original, faxed, photocopied, or electronic CMN in its records before it can submit a claim for payment to Medicare, the complaint said. 

Finally, the government has designated a list of certain covered items, referred to as Special Covered Items, that require a written order, the complaint explained.  They include, among others, any items of DME that appear on the durable medical equipment, prosthetics, orthotics, and supplies fee schedule with a price ceiling at or greater than $1,000.  

Per the plaintiff, Medicare received an allegation from Covent Bridge, a Medicare processor, claiming that “Medstrive bills Medicare for orthotics that neither the beneficiaries nor their primary care physicians have requested and are medically unnecessary.” Medicare then suspended current payments to Medstrive in order to recoup the past overpayments.

Medstrive disputes that there were past overpayments which require recoupment, noting that they have the required documentation that Medicare requires. Also, the suspension is not an appealable adjudication, so until the overpayments have been processed, Medstrive argues that they are not receiving payments legally due. Medstrive also argues that the restriction is also pushing the company to insolvency, which would result in fewer durable goods suppliers during the current COVID-19 emergency, and that Medicare could grant an exemption from the suspension on those grounds as well.

Medstrive is alleging violation of procedural due process and alleges ultra vires violations, seeking injunctive relief from the court. They are represented by Kennedy, Attorneys & Counselors at Law