UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF OHIO 

EASTERN DIVISION 

Chillicothe Chiropractic 

and Wellness Center, 

Plaintiff, 

v. 

Kathleen Sibelius, 

Secretary, United States 

Department of Health and 

Human Services 

Defendant. 

Case No. 2:12-cv-330 

Judge Michael H. Watson 

Magistrate Judge Deavers 

OPINION AND ORDER 

Chillicothe Chiropractic and Wellness Center ("Plaintiff'), a Medicare 

provider, seeks review of the decision of the Department of Health and Human 

Services (the "Secretary") finding Plaintiff liable for overpayments received from 

Medicare. The Magistrate Judge issued a Report and Recommendation ("R&R") 

recommending that the Court affirm the Secretary's decision. ECF No. 35. On 

May 2, 2014, Plaintiff filed Objections to the R&R. ECF No. 38. For the following 

reasons, the Court OVERRULES Plaintiffs Objections and ADOPTS the R&R. 

I. BACKGROUND 

The complete background of this case is set forth in the R&R, ECF No. 35. 

Briefly, on December 9, 2009, the Secretary notified Plaintiff that it had overpaid 

Plaintiff for Medicare services in the amount of $90,628. In calculating the 

Case: 2:12-cv-00330-MHW-EPD Doc #: 40 Filed: 11/24/14 Page: 1 of 6 PAGEID #: <pageID>
overpayment, the Secretary examined 1 00 fully or partially paid claims. Upon 

review of those claims, it determined that every claim was missing some requisite 

documentation. It ultimately denied all 1 00 claims for various reasons, attributing 

to them $2,541.44 in actual overpayment. The Secretary then extrapolated that 

amount of overpayment to the entire universe of Plaintiff's claims, resulting in an 

estimated overpayment of $90,628. 

Plaintiff sought redetermination of the Secretary's finding before the 

appropriate entities and eventually before an Administrative Law Judge ( "ALJ"). 

On September 29, 2011, the ALJ issued a partially favorable decision wherein he 

concluded that some of the claims in the sample did in fact satisfy Medicare's 

coverage requirements, the statistical sample the Secretary used was invalid, 

and the Secretary's sample analysis could not be extrapolated to Plaintiff's larger 

population of claims. 

On November 25, 2011, the Secretary referred the matter to the Medicare 

Appeals Council ("MAC"). The MAC found that the ALJ erred in invalidating the 

statistical sample and that Plaintiff did not satisfy its burden to demonstrate the 

invalidity of the statistical sampling method. It concluded that the overpayment 

should be assessed at the lower limit of a one-sided, 90% confident interval. 

Plaintiff appealed the MAC's determination to this Court, arguing that the 

MAC exceeded its jurisdictional authority in reviewing the ALJ's decision and that 

Plaintiff had carried its burden to demonstrate the invalidity of the Secretary's 

sampling method. 

Case No. 2:12-cv-330 Page 2 of 6 

Case: 2:12-cv-00330-MHW-EPD Doc #: 40 Filed: 11/24/14 Page: 2 of 6 PAGEID #: <pageID>
The Magistrate Judge issued an R&R recommending the MAC's 

determination be affirmed, finding that the MAC did not exceed its jurisdictional 

authority in hearing the appeal and that its decision was supported by substantial 

evidence. R&R, ECF No. 35. Plaintiff objects only to the Magistrate Judge's 

finding that substantial evidence supports the MAC's decision. 

II. STANDARD OF REVIEW 

If a party objects within the allotted time to an R&R, the Court "shall make 

a de novo determination of those portions of the report or specified proposed 

findings or recommendations to which objection is made." 28 U.S.C. § 636(b)(1 ); 

see also Fed R. Civ. P. 72(b). Upon review, the Court "may accept, reject, or 

modify, in whole or in part, the findings or recommendations made by the 

magistrate judge." 28 U.S.C. § 636(b)(1 ). 

Plaintiff's objections address the Magistrate Judge's review of the MAC's 

decision. In reviewing a MAC decision, the Court affirms the Commissioner's 

decision if it is supported by substantial evidence. R&R 8, ECF No. 35 (citing 

Rabbers v. Comm'rof Soc. Sec., 582 F.3d 647, 651 (6th Cir. 2009)). 

Ill. ANALYSIS 

In seeking reversal of the MAC's decision, Plaintiff argued the decision 

was not supported by substantial evidence because: ( 1) the MAC incorrectly 

concluded that the ALJ did not include sufficient detail in his analysis of the 

Secretary's sampling method, and (2) the MAC incorrectly determined Plaintiff 

Case No. 2:12-cv-330 Page 3 of 6 

Case: 2:12-cv-00330-MHW-EPD Doc #: 40 Filed: 11/24/14 Page: 3 of 6 PAGEID #: <pageID>
failed to satisfy its burden to prove the invalidity of the Secretary's sample 

methodology. Brief 4-5, ECF No. 28. 

The Magistrate Judge concluded that Plaintiff's first argument was 

irrelevant because in determining whether substantial evidence supports the 

MAC's decision, the district court does not consider the ALJ's findings: 

[l]n ascertaining whether substantial evidence supports the 

Secretary's decision, the Court reviews only the MAC's findings. See 

John Balko & Assoc., Inc., v. Sec'y of Health & Human Servs., No. 

13-1568, --- F. App'x ----, 2014 WL542262, at *5 (3d Cir. Feb. 12, 

2014) ("[l]nasmuch as we are concerned on this appeal ... with a 

review of MAC's decision, we do not review the ALJ's findings, and 

[the plaintiff's] arguments addressing those findings are irrelevant."). 

For this reason, Plaintiff's contention that the MAC erroneously 

attacked the sufficiency of detail in the ALJ's analysis is not relevant 

to this Court's determination of whether substantial evidence 

supports the Secretary's decision. 

R&R 11-12, ECF No. 35. 

Plaintiff objects to this conclusion. Its argument is as follows. In declining 

to review the ALJ's findings, the Magistrate Judge relied on Balko's conclusion 

that the ALJ's findings are irrelevant. In reaching that conclusion, Balko relied on 

International Rehabilitative Sciences Inc. v. Sebelius, 688 F.3d 994, 1001-02 

(9th Cir. 201 0). lnt'l Rehab. does not, however, stand for the proposition that the 

ALJ decision should be ignored when reviewing the MAC's decision. Balko 

therefore incorrectly found the ALJ decision irrelevant, and in relying on Balko, so 

too did the Magistrate Judge. Had the Magistrate Judge correctly applied 

International Rehab. and considered Plaintiff's argument regarding the MAC's 

Case No. 2:12-cv-330 Page 4 of 6 

Case: 2:12-cv-00330-MHW-EPD Doc #: 40 Filed: 11/24/14 Page: 4 of 6 PAGEID #: <pageID>
treatment of the ALJ's analysis, she would have found that the MAC's decision is 

not supported by substantial evidence. 

Plaintiff's argument is not well taken. Even assuming lnt'l Rehab. required 

the Magistrate Judge to consider the MAC's attack on the sufficiency of the ALJ's 

analysis, Plaintiff fails to explain how such consideration would affect the 

Magistrate Judge's finding of substantial evidence. Indeed, the Magistrate Judge 

found that substantial evidence existed to support the MAC's decision without 

considering Plaintiff's challenge to MAC's attack on the sufficiency of the ALJ's 

reasoning. As Plaintiff does not challenge the evidence on which the Magistrate 

Judge relied in determining that substantial evidence existed, it is unclear how 

consideration of Plaintiff's argument would change the Magistrate Judge's 

conclusion. 1 

In sum, Plaintiff has failed to establish that the Magistrate Judge erred in 

finding that the MAC's decision was not supported by substantial evidence. 

1 Plaintiff's also takes issue with the fact that the MAC considered the case even though 

the Secretary did not participate in the hearing before the ALJ. Again, however, Plaintiff 

fails to explain how the Secretary's absence at the hearing demonstrates a lack of 

substantial evidence to support the MAC's decision. To the extent Plaintiff meant to 

object to the Magistrate Judge's conclusion that the MAC did not lack authority to 

consider the case absent the Secretary's participation in the hearing, Plaintiff fails to 

present a cogent argument to that effect. 

Case No. 2:12-cv-330 Page 5 of 6 

Case: 2:12-cv-00330-MHW-EPD Doc #: 40 Filed: 11/24/14 Page: 5 of 6 PAGEID #: <pageID>
IV. CONCLUSION 

For the foregoing reasons, the Court OVERRULES Plaintiff's Objections, 

ECF No. 38, and ADOPTS the R&R, ECF No. 35. The Secretary's final decision 

is hereby AFFIRMED. 

IT IS SO ORDERED. 

Case No. 2:12-cv-330 

MlCHAELH:WATSON, JUDGE 

UNITED STATES DISTRICT COURT 

Page 6 of6 

Case: 2:12-cv-00330-MHW-EPD Doc #: 40 Filed: 11/24/14 Page: 6 of 6 PAGEID #: <pageID>