Health Law Daily Risk of closing provider business not enough to show irreparable harm
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Thursday, November 29, 2018

Risk of closing provider business not enough to show irreparable harm

By Rebecca Mayo, J.D.

A health care provider’s motion requesting a temporary restraining order (TRO) to keep CMS from terminating its Medicare provider agreement was denied by a district court. The court found that the provider failed to show there would be irreparable harm or that the balance of harms or public interest weighed in favor of granting emergency relief. The court further held that being put out of business by the termination of a provider agreement was a risk the provider voluntarily took when it enrolled in the program and structured its business to rely solely on Medicare reimbursements for income (Compassus OP of Missouri, LLC v. Azar, November 27, 2018, Perry, C.).

Termination. After inspections of a number of hospice agencies owned by the same parent company, CMS inspected a hospice care provider in St. Louis and determined that the provider failed to meet care standards and had placed patients in "immediate jeopardy." CMS notified the provider that its provider agreement would be terminated but stipulated that payments would continue for up to 30 days for patients previously admitted to allow time to find a new provider, and offered the provider the option to submit a plan of correction. The provider submitted a plan of correction; however it was not accepted and CMS sent a final notice of Medicare termination. The provider formally requested a hearing before an Administrative Law Judge (ALJ) and filed for a TRO in District Court to prevent CMS from terminating the provider agreement.

Due process. The court could not say that the deficiencies set out in the inspections on which CMS based its decision were so obviously wrong that there was a colorable due process violation. Additionally, even if the provider had a property interest in its continued participation in the Medicare program, and even if the patients had a due process interest in continuing care with the provider, and even if the provider could assert the due processes interests of its patients, due process does not require a pre-termination hearing in every case.

Irreparable harm. Being put out of business by the termination of Medicare provider agreement is a risk that providers choose to take when they sign up for the Medicare program and structure their business to receive 100% of its revenues from Medicare. Further, there are processes in place for providers to have termination decisions reviewed by the agency and then the court once the agency has made a final decision. Therefore, there is no irreparable harm to the provider. The provider provides services to patients in their homes or in a skilled nursing facility, so there is no reason any hospice patients would be required to be physically moved to a different facility because of the termination. CMS provided 30 days for patients to find a new provider and there are alternative qualified Medicare providers in the St. Louis area. Therefore, the patients will not be irreparably harmed if the injunction is not issued.

Decision. The balance of harms and the public interest is difficult for the court to evaluate in this case and ultimately the burden is on the provider to show that these factors weigh in the provider’s favor for granting a TRO. The court held that the provider did not meet those burdens. It also failed to show irreparable harm to either the provider or the patients and failed to show a likelihood of success on the due process claim. Therefore, the court denied the motion for a TRO.

The case is No. 4:18 CV 1942 CDP.

Attorneys: Elizabeth Brooke Herrington (Morgan and Lewis LLP) for Compassus OP of Missouri LLC d/b/a Compassus Hospice and Pallative Care. Amy E. Sestric, Office of U.S. Attorney, for Alex M. Azar II.

Companies: Compassus OP of Missouri, LLC d/b/a Compassus Hospice and Palliative Care – St. Louis

MainStory: TopStory CaseDecisions CMSNews CoPNews ProviderNews QualityNews MissouriNews

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