By Jessica Y. Washington, J.D.
The threat of bankruptcy was sufficient to justify a temporary restraining order preventing recoupment of Medicare payments, pending an administrative hearing.
Claiming subject matter jurisdiction based on the collateral-claim exception (42 U.S.C. §405(g)), the U.S. District Court for the Eastern District of North Carolina found in favor of Brier Creek Integrated Pain & Spine PLLC (Brier Creek), a pain management and opiate addiction treatment center, and granted a temporary restraining order (TRO) preventing recoupment of Medicare overpayments. The court was swayed by the treatment center’s allegation of procedural due process rights violations pending administrative law judge (ALJ) review of the merits of the underlying matter involving the validity of overpayments. The district court ruled that the provider met all of the criteria necessary for the grant of a TRO and the waiver of bond. The court reserved its ruling on the provider’s request for a preliminary injunction. (Brier Creek Integrated Pain & Spine PLLC v. HHS, September 5, 2019, Britt, W.).
Collateral-claim exception. The district court took jurisdiction of this matter based on the collateral-claim exception, which gives a federal court jurisdiction over claims that are (1) entirely collateral to all underlying substantive issues, and (2) colorable. The court found that the question of whether ongoing recoupment payments assessed against the provider during the prolonged delay of an ALJ hearing violates Constitutional due process rights, was independent of the merits of the underlying challenge to the Medicare overpayments, and, thus, should be considered collateral. Moreover, the court found the provider’s contention that the financial hardships it experienced as a result of the ongoing recoupment during the three-year period pending an ALJ hearing (i.e., loss of revenue, pay cuts, staff reductions, and potential bankruptcy), to be arguable and non-frivolous, and, thus, colorable.
Temporary restraining order and preliminary injunctive relief. The district court granted the provider a TRO finding that the provider was (1) likely to succeed on the merits of its claim; (2) likely to suffer irreparable harm without an injunction; (3) able to demonstrate that the balance of hardships weighed in its favor; and (4) able to show that the injunction was in the public interest. The court found that the provider had a significant property interest in receiving payment for services rendered, that there was substantial risk of erroneous deprivation of the provider’s property interest absent its ability to mount a case challenging the overpayments at the ALJ hearing stage, and that the government would not be unduly burdened, fiscally or administratively, by the provider’s request for injunctive relief pending an ALJ hearing. The district court found that the threat of bankruptcy to the provider constituted a substantial threat of immediate and irreparable harm that has no remedy at law. The court agreed with the provider’s contention in its verified complaint, that its nearly 7,000 patients, many of whom receive services in rural areas, would be deprived of necessary treatment if bankruptcy forced it to go out of business. The district court ruled that the provider’s demonstrated harm and threat of insolvency substantially outweighed the harm suffered by the government resulting from the delay in collecting Medicare recoupments until an ALJ hearing. The court held that the provider offers a necessary medical service in the face of the nationwide opioid crisis and that it serves a particularly vulnerable demographic that would have great difficulty in finding opiate addiction services elsewhere.
The case is No. 5:19-CV-300-BR.
Attorneys: Frank S. Kirschbaum (Wyrick Robbins Yates & Ponton LLP) for Brier Creek Integrated Pain & Spine PLLC.
Companies: Brier Creek Integrated Pain & Spine PLLC
MainStory: TopStory CMSNews PaymentNews NorthCarolinaNews
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