CHICAGO — A Tinley Park-based home healthcare company can't pursue their fraud claims against a Medicare administrative company that stopped paying them over belief the home healthcare provider had received improper payments, as a federal judge says it hasn't yet exhausted administrative remedies provided to it through Medicare.

On Oct. 19, U.S. District Judge Matthew F. Kennelly dismissed the case brought by home healthcare provider, MedPro, against Tom Price, U.S. Secretary of Health and Human Services, and Medicare payment processor AdvanceMed.

In November 2016, MedPro was notified that AdvanceMed had reviewed 32 of its patient charts and determined there was evidence that MedPro was"billing Medicare for services that were not medically reasonable or necessary and where the required face-to-face encounters and physician recertification were invalid," Kennelly said. Based on that determination, AdvanceMed told MedPro it was suspending its Medicare payments.

AdvanceMed is one of the entities authorized by the Secretary of Health and Human Services (HHS) to administer the Medicare program through the Centers for Medicare and Medicaid Services (CMS).

Zone program integrity coordinators like AdvanceMed are asked to identify cases of possible Medicare fraud and prevent "the mistaken overpayment of Medicare funds to healthcare providers," Kennelly wrote. If fraud is suspected, reimbursement payments may be suspended while an investigation is conducted for a maximum of 180 days. Providers may submit a response explaining what happened. 

In December 2016, MedPro answered the allegations with a rebuttal that included several boxes of records. AdvanceMed, however, told MedPro CMS had decided to continue the suspension of payments. 

"MedPro alleges that the secretary's refusal (through AdvanceMed) to review the additional documentation submitted with MedPro's rebuttal statement constitutes a failure to carry out the duties prescribed by ... the Medicare Program Integrity Manual," Kennelly said in the decision. "MedPro further alleges that the secretary's failure to ensure the enforcement of these regulations has deprived MedPro of its right of review.”

In order to get the secretary of HHS to review the rebuttal statement and additional documentation, MedPro requested a writ of mandamus. 

“MedPro also alleges that AdvanceMed committed fraud by making false representations to MedPro and similarly situated providers that AdvanceMed would (and did) review supporting documentation submitted with a rebuttal statement in accordance with the applicable regulations,” Kennelly said in the decision.

The judge noted MedPro has asserted AdvanceMed "never" reviews supporting documentation attached to rebuttal statements.

While the lawsuit was pending, AdvanceMed terminated MedPro’s payment suspension, but on the same day notified MedPro it had concluded the care provider had received more than $6.9 million in overpayments through Medicare.

Kennelly, however, concluded the case should be dismissed for failure to exhaust administrative remedies, saying MedPro's fraud claim couldn't be separated from its underlying action requesting payment for services under Medicare. 

"There is no real way to isolate the fraud claim from other claims that plainly require exhaustion," Kennelly wrote. "More specifically, the temporary suspension resulted from AdvanceMed's suspicion that MedPro was billing Medicare for services that were not medically reasonable or necessary, and MedPro's rebuttal statement - which it alleges AdvanceMed promised to but never intended to review - included a 'thorough examination' of these same claims. 

"The Court concludes that MedPro's fraud claim cannot be separated from its underlying claims for payment and that the claim therefore arises under the Medicare Act."

MedPro is represented in the action by attorneys with Jurisprudence Health Law Group PC, of Naperville.

Defendants were represented by the U.S. Attorney's Office, in Chicago. 

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U.S. Department of Health and Human Services (HHS) U.S. District Court for the Northern District of Illinois

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