Court Opinion

ID: 5133866
Source: CourtListenerOpinion
Date Created: 2021-12-10 01:00:23.370718+00
Date Added: 2024-06-11T08:23:40.430594
License: Public Domain

Case: 20-10443      Document: 00516124053         Page: 1    Date Filed: 12/09/2021

           United States Court of Appeals
                for the Fifth Circuit                                   United States Court of Appeals
                                                                                 Fifth Circuit

                                                                               FILED
                                                                        December 9, 2021
                                   No. 20-10443
                                                                          Lyle W. Cayce
                                                                               Clerk

   Med-Cert Home Care, L.L.C.,

                                                             Plaintiff—Appellee,

                                       versus

   Xavier Becerra, Secretary, U.S. Department of Health
   and Human Services; Seema Verma, Administrator for
   Centers for Medicare and Medicaid,

                                                        Defendants—Appellants.

                  Appeal from the United States District Court
                      for the Northern District of Texas
                           USDC No. 3:18-CV-2372

   Before Dennis, Elrod, and Duncan, Circuit Judges.
   Jennifer Walker Elrod, Circuit Judge:
          Med-Cert Home Care, L.L.C. sued the federal officials in charge of
   administering the Medicare program for alleged violations of its procedural
   due process rights. Med-Cert claimed that when the Department of Health
   and Human Services (HHS) sought to recoup overpaid Medicare funds from
   Med-Cert before its hearing with an administrative law judge, HHS violated
   Med-Cert’s due process rights. The district court agreed and enjoined the
   federal officials from recouping funds until after the hearing. While this case
Case: 20-10443     Document: 00516124053           Page: 2   Date Filed: 12/09/2021

                                    No. 20-10443

   was on appeal, we issued Sahara Health Care Inc. v. Azar, 975 F.3d 523 (5th
   Cir. 2020). There, we held that a similarly situated health-care provider was
   not denied due process. Id. at 530–33. We have since applied Sahara to
   reverse a district court’s permanent injunction like the one in this case.
   Family Rehab., Inc. v. Becerra, 16 F.4th 1202 (5th Cir. 2021). Because Sahara
   controls here, we REVERSE and REMAND for the district court to
   consider Med-Cert’s alternative claims.
                                         I.
          The Medicare program allows HHS to recoup funds that it overpaid
   to a health-care provider. 42 U.S.C. § 1395ddd(f). If the provider believes it
   was not overpaid, it can challenge HHS’s determination through a four-step
   administrative review process, followed by review in a federal court. Id.
   § 1395ff. Step one is a “redetermination” by an HHS contractor. Id.
   § 1395ff(a)(3); 42 C.F.R. § 405.948. Step two involves “reconsideration” by
   a qualified independent contractor. 42 U.S.C. § 1395ff(b)–(c); 42 C.F.R.
   §§ 405.902, 405.904(a)(2). These first two steps are the only time the
   provider can submit paper evidence, absent “good cause.” 42 U.S.C.
   § 1395ff(b)(3); 42 C.F.R. §§ 405.946(a), 405.966(a)(2).
          After steps one and two, the Medicare statute allows HHS to begin
   recouping overpayments, and if the provider is ultimately successful in the
   later steps, HHS must pay it back (with interest).                42 U.S.C.
   § 1395ddd(f)(2)(B). Step three is an ALJ hearing which can include an in-
   person hearing and the chance to present oral testimony and cross-
   examination. 42 C.F.R. § 405.1036(c)–(d). If the ALJ does not give a hearing
   or issue a decision within ninety days of the timely request, the provider can
   skip step three and go straight to step four: de novo review by the HHS
   Appeals Board. 42 U.S.C. § 1395ff(d)(3)(A). And if the Appeals Board does

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   not issue a decision within 180 days, the provider can seek judicial review in
   federal court. Id. § 1395ff(d)(3)(B).
                                            II.
            In this case, the government determined that Med-Cert was overpaid
   almost $1.8 million. Med-Cert began the four-step administrative process by
   filing a Request for Redetermination. In support of that request, Med-Cert
   filed nearly 13,000 pages of clinical documents and an expert opinion,
   showing that Med-Cert was not overpaid for the services it provided. The
   step-one “redetermination” came out the same way as the initial review.
   Med-Cert then went to step two: “reconsideration” of the redetermination.
   The reconsideration reaffirmed the redetermination that Med-Cert was
   overpaid nearly $1.8 million. Med-Cert then appealed that decision and
   requested an ALJ hearing, but in the meantime, HHS began recouping the
   funds.
            Because of administrative backlog at HHS, Med-Cert still has not
   received an ALJ hearing. Rather than “escalate” to step four (review before
   the Appeals Board), Med-Cert sued federal officials to prevent recoupment
   while it waited for an ALJ determination. To Med-Cert, the ALJ hearing was
   essential to afford it the due process it was entitled to. The district court
   agreed, granting a preliminary injunction, then eventually granting summary
   judgment to Med-Cert, permanently enjoining the federal officials from
   recouping payments until after Med-Cert has received an ALJ hearing. The
   federal officials timely appealed.
            We review the grant of summary judgment de novo, the permanent
   injunction for abuse of discretion, and the legal issues underlying the grant of
   the injunction de novo. Family Rehab., 16 F.4th at 1204.

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                                         III.
          Med-Cert’s procedural due process claim is foreclosed by Sahara.
   There, we explained that the provider’s inability to explain why “steps one
   and two, standing alone, fail to satisfy the constitutional requirement” was
   fatal. Sahara, 975 F.3d at 531. Though the step-three ALJ hearing gives
   providers the chance to present live testimony and to cross-examine
   witnesses, it does not (absent good cause) allow the provider to supplement
   the evidence that it presented in steps one and two. Just like the provider in
   Sahara, Med-Cert admits it “has no need to provide more evidence.” This
   cuts against Med-Cert’s purported need for a live hearing because the
   hearing will only rehash what has already been produced. See id. at 531–32.
          Also in-line with the provider in Sahara, Med-Cert cannot “explain
   how the possibility of cross-examination at the hearing would benefit it.” Id.
   at 531. Cross-examination is most helpful when material facts are in dispute
   and the case turns on the credibility or veracity of the government’s
   witnesses. Id. That is not the case here. Med-Cert contends that “it could
   present witnesses at the ALJ hearing that would clearly demonstrate the
   gross inaccuracies on how the clinical files were ignored in the audits,” and
   that a “live teleconference” “would ensure that [the] incorrect audit
   contractor decisions would be addressed, discussed, and proven to be
   inaccurate.” But nothing about that approach is unique to a live hearing. In
   reality, Med-Cert merely wants someone else to review its case. But as we
   said in Sahara, that is not enough to establish a right to such a hearing. Med-
   Cert “has already received two meaningful opportunities to be heard,” id. at
   530, and “it can escalate the review process to the fourth step or to a federal
   district court” if it so chooses, Family Rehab., 16 F.4th at 1204.
          Though Med-Cert claims that a live hearing would give the ALJ the
   opportunity to “make critical credibility determinations,” it fails to explain

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   how any witness’s credibility would make a difference in this case. Rather,
   as in Family Rehabilitation, Med-Cert’s claims concern only “documentation
   issues.”   See id. (holding that a live hearing was not required where
   overpayment claims “involve[d] documentation issues” and “not objections
   to the substantive medical judgments of doctors”). Thus, Med-Cert’s
   arguments, like those of the providers in Sahara and Family Rehabilitation,
   are unavailing.
          Med-Cert is correct to say that Sahara does not foreclose every due-
   process claim challenging HHS’s recoupment of overpayments. Each case
   comes down to its facts. For instance, the provider in Sahara did “not even
   assert that it desire[d] to subpoena any witness.” 975 F.3d at 532. Med-Cert
   says that it plans to provide expert testimony at its ALJ hearing. Even so, the
   critical point is that the basis of HHS’s determination is a lack of supporting
   documentation as required by law, not the doctors’ subjective medical
   judgment on the necessity of services provided. Thus, there is no added
   benefit of live testimony and cross-examination here, which leads us to the
   same conclusion as in Sahara.

                            *              *              *
          Because the district court did not resolve some of Med-Cert’s
   alternative claims, we REVERSE the district court’s grant of summary
   judgment and the permanent injunction and REMAND for consideration of
   those claims by the district court in the first instance.

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