Popkin v. Burwell

172 F.Supp.3d 161

Gregg Popkin, et al., Plaintiffs,

v.Sylvia M. Burwell, Defendant.

Civil Action No. 16-141 (RMC)

United States District Court, District of Columbia.

Signed March 24, 2016

Kenneth Joel Haber, Law Office of Kenneth Joel Haber, P.C., Boyds, MD, for Plaintiffs.

Andrew Marshall Bernie, U.S. Department of Justice, Washington, DC, for Defendant.

OPINION

ROSEMARY M. COLLYER, United States District Judge

The Department of Health and Human Services, through the Centers for Medicare and Medicaid Services, deemed Dr. Gregg Popkin and his clinic, Atlantic Medical, Inc., to be at high risk for fraud and abuse and placed Atlantic Medical on pre-payment review. When the vast majority of claims for payment were denied, Atlantic Medical went out of business. Plaintiffs Dr. Popkin and Atlantic Medical sue the Secretary of the Department of Health and Human Services, alleging claims under the Administrative Procedure Act, 5 U.S.C. § 701 et seq ., the Fifth Amendment Due Process Clause, and the First Amendment. They seek a preliminary injunction terminating pre-payment review and requiring the Secretary to remit all payments. The Secretary opposes. Because Plaintiffs failed to exhaust their administrative remedies, the case must be dismissed for lack of jurisdiction and the motion for a preliminary injunction will be denied.

I. FACTS

A. Medicare Act and the Administrative Process

The Medicare Act, 42 U.S.C. § 1395 et seq ., establishes a health insurance program for disabled and elderly individuals. Part A covers inpatient hospital stays, other institutional care, and home health care. 42 U.S.C. § 1395d. Part B covers physician and other medical services. Id . § 1395k. The Secretary of the Department of Health and Human Services administers the Medicare program through the Centers for Medicare and Medicaid Services, which contracts with Medicare Administrative Contractors to manage enrollment of health care providers and to process payments. Id . §§ 1395kk-1395kk-1(a). Under this system, a Medicare health care provider submits its claim for payment directly to the Medicare Administrative Contractor for its geographic region, and the Medicare Administrative Contractor issues an initial payment determination. Id . §§ 1395kk-1(a), 1395ff(a)(1)-(2); 42 C.F.R. § 405.904(a)(2).

When a Medicare Administrative Contractor denies or limits payment on a claim on initial determination, there is a four-level appeal process. 42 U.S.C. § 1395ff. At the first level, a provider may seek redetermination from an individual at the Medicare Administrative Contractor who was not involved in the initial decision. Id . § 1395ff(a)(3) ; 42 C.F.R. §§ 405.904(a)(2), .948. At the second level, a provider may seek reconsideration by a Qualified Independent Contractor.¹ 42 U.S.C. § 1395ff(b) -(c), (g) ; 42 C.F.R. § 405.904(a)(2). If the Qualified Independent Contractor does not make a decision within 60 days, a provider can bypass such review and appeal to the third level. 42 U.S.C. § 1395ff(c)(3)(C)(ii) ; 42 C.F.R. § 405.970.

Where the amount in controversy is over $100, a third level of review is available—a hearing before an administrative law judge (ALJ). 42 U.S.C. §§ 1395ff(b)(1)(E), (d)(1). The Medicare Act requires the ALJ to conclude a hearing and render a decision on the appeal of a decision of a Qualified Independent Contractor within 90 days after the request for hearing. Id . § 1395ff(d)(1)(A) ; 42 C.F.R. § 405.1016. A claimant can appeal the decision of the ALJ to the fourth level, the Medicare Appeals Council, see id . § 1395ff(d)(2), or if the ALJ fails to render a decision in 90 days, a claimant can “escalate” his appeal to the Medicare Appeals Council. Id . § 1395ff(d)(3)(A). The regulations describe the process for requesting that an appeal be escalated to the next level:

(a) Requesting escalation. An appellant who files a timely request for hearing before an ALJ and whose appeal continues to be pending before the ALJ at the end of the applicable ALJ adjudication period under § 405.1016 may request [Medicare Appeals Council] review if—

(1) The appellant files a written request with the ALJ to escalate the appeal to the MAC after the adjudication period has expired; and

(2) The ALJ does not issue a decision, dismissal order, or remand order within the later of 5 calendar days of receiving the request for escalation or 5 calendar days from the end of the applicable adjudication period set forth in § 405.1016.

(b) Escalation.

(1) If the ALJ is not able to issue a decision, dismissal order, or remand order within the time period set forth in paragraph (a)(2) of this section, he or she sends notice to the appellant.

(2) The notice acknowledges receipt of the request for escalation, and confirms that the ALJ is not able to issue a decision, dismissal order, or remand order within the statutory timeframe.

(3) If the ALJ does not act on a request for escalation within the time period set forth in paragraph (a)(2) of this section or does not send the required notice to the appellant, the QIC decision becomes the decision that is subject to MAC review consistent with § 405.1102(a).

(c) No escalation. If the ALJ's adjudication period set forth in § 405.1016 expires, the case remains with the ALJ until a decision, dismissal order, or remand order is issued or the appellant requests escalation to the MAC.

42 C.F.R. § 405.1104.

The Medicare Appeals Council conducts a de novo review of the ALJ decision. 42 U.S.C. § 1395ff(d)(2). On appeal from an ALJ decision, the Medicare Appeals Council must make a decision or remand within 90 days. See id .; see also 42 C.F.R. § 405.1100(d) (in cases where there was no ALJ decision and the appeal was escalated to the Council from the ALJ level, the Council must render a decision or remand within 180 days). If the Medicare Appeals Council fails to render a timely decision, the claimant can file suit in federal district court. 42 U.S.C. § 1395ff(d)(3)(B). The Medicare regulations also describe the process for taking a claim to federal court when the Medicare Appeals Council has not issued a decision within the allotted time for adjudication:

(a) If the MAC [i.e ., the Medicare Appeals Council] does not issue a decision or dismissal or remand the case to an ALJ within the adjudication period specified in § 405.1100, or as extended as provided in this subpart, the appellant may request that the appeal, other than an appeal of an ALJ dismissal, be escalated to Federal district court. Upon receipt of a request for escalation, the MAC may—

(1) Issue a decision or dismissal or remand the case to an ALJ, if that action is issued within the latter of 5 calendar days of receipt of the request for escalation or 5 calendar days from the end of the applicable adjudication time period set forth in § 405.1100 ; or

(2) If the MAC is not able to issue a decision or dismissal or remand as set forth in paragraph (a)(1) of this section, it will send a notice to the appellant acknowledging receipt of the request for escalation and confirming that it is not able to issue a decision, dismissal or remand order within the statutory time frame.

(b) A party may file an action in a Federal district court within 60 calendar days after the date it receives the MAC's notice that the MAC is not able to issue a final decision, dismissal order, or remand order unless the party is appealing an ALJ dismissal.

42 C.F.R. § 405.1132.

Most of the work done by Medicare Administrative Contractors consists of audits on providers after payments have been made to them. “Most of the millions of Medicare claims are reviewed on a post payment ‘honor system.’ The carrier pays the claim upon receipt of a minimum set of information and later audits the physician's or supplier's underlying documentation of medical necessity and other such requirements.” Bertschland Family Practice Clinic, P.C. v. Thompson , No. IP01–562–CHF, 2002 WL 1364155, at *2 (S.D.Ind. June 4, 2002). If a Medicare Administrative Contractor denies a claim during post-payment review and the claimant appeals, the Secretary can recoup the payment if the payment denial is affirmed at the first two appeal levels. 42 U.S.C. § 1395ddd(f)(2). If the claimant subsequently prevails, the Secretary is required to repay the funds to the claimant.

However, to ensure that the Medicare program pays only legitimate claims, Medicare Administrative Contractors also are authorized to conduct pre-payment review of Medicare claims submitted by providers deemed to be at high risk for fraud and abuse. See Farkas v. Blue Cross & Blue Shield of Mich ., 24 F.3d 853, 854 n. 1 (6th Cir.1994) (“The use of [pre-payment review] finds statutory support at 42 U.S.C. § 1395l e, which provides that ‘[n]o payment shall be made to any provider of services ... unless there has been furnished such information as may be necessary in order to determine the amounts due such provider ....’ ”). When a provider is placed on pre-payment review, the provider is required to submit substantive documentation to support some or all of its claims before such claims can be paid. The Medicare Administrative Contractor examines such material to determine the sufficiency of the documentation and whether the medical services or supplies were medically necessary, reasonable, and otherwise payable under Medicare law. See 42 U.S.C. § 1395u(b)(3) ; 42 C.F.R. § 405.501 et seq . ; Isaacs v. Bowen , 865 F.2d 468, 470 (2d Cir.1989).

Whether pre-payment review or post-payment review is utilized, an initial denial of a Medicare claim can be appealed through the four-level process described above. After exhausting administrative remedies and obtaining a final agency decision, either from the Medicare Appeals Council or, if the Council fails to render a timely decision, by utilizing the escalation process, a claimant may seek judicial review in federal district court. 42 U.S.C. §§ 405(g), (h) (made applicable to the Medicare Act via 42 U.S.C. §§ 1395ff(b)(1)(A), 1395ii ).

B...