USDC IN/ND case 2:22-cv-00028 document 1 filed 02/14/22 page 1 of 8
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF INDIANA
`HAMMOND DIVISION
`
`COMMUNITY HOSPITAL,
`
`)
`)
`)
`)
`)
`)
`)
`)
`XAVIER BECERRA, Secretary,
`)
`UNITED STATES DEPARTMENT
`OF HEALTH AND HUMAN SERVICES, )
`)
`)
`)
`
`
`
`
`
`
`
`Plaintiff,
`
`v.
`
`Defendant.
`
`Case No.
`
`2:22-cv-28
`
`Appeal from:
`Medicare Appeals Council
`No. M-13-1584
`
`ALJ Nos. 1-932875452
`1-932911968
`1-932882096
`1-932866201
`
`COMPLAINT FOR JUDICIAL REVIEW
`
`Plaintiff, Community Hospital, hereby petitions for judicial review from the
`
`final Order of the Medicare Appeals Council dismissing its request for review of four
`
`administrative law judge (“ALJ”) decisions, and in support hereof states as follows.
`
`INTRODUCTION
`
`1.
`
`This matter arises from Community Hospital seeking Medicare
`
`payment for four patients, B.D., R.K., H.P., and B.G., who each received a cardiac
`
`procedure that was followed by a one-day inpatient hospital stay.
`
`2.
`
`Pursuant to Section 1886(d) of the Social Security Act (the “Act”),
`
`Community Hospital billed the procedure and in-patient stay for each patient to
`
`Medicare Part A (hospital care), under the diagnosis-related group (“DRG”)
`
`appropriate for the cardiac procedure, which determines the allowable Medicare
`
`
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE NORTHERN DISTRICT OF INDIANA
`HAMMOND DIVISION
`
`COMMUNITY HOSPITAL,
`
`)
`)
`)
`)
`)
`)
`)
`)
`XAVIER BECERRA, Secretary,
`)
`UNITED STATES DEPARTMENT
`OF HEALTH AND HUMAN SERVICES, )
`)
`)
`)
`
`
`
`
`
`
`
`Plaintiff,
`
`v.
`
`Defendant.
`
`Case No.
`
`2:22-cv-28
`
`Appeal from:
`Medicare Appeals Council
`No. M-13-1584
`
`ALJ Nos. 1-932875452
`1-932911968
`1-932882096
`1-932866201
`
`COMPLAINT FOR JUDICIAL REVIEW
`
`Plaintiff, Community Hospital, hereby petitions for judicial review from the
`
`final Order of the Medicare Appeals Council dismissing its request for review of four
`
`administrative law judge (“ALJ”) decisions, and in support hereof states as follows.
`
`INTRODUCTION
`
`1.
`
`This matter arises from Community Hospital seeking Medicare
`
`payment for four patients, B.D., R.K., H.P., and B.G., who each received a cardiac
`
`procedure that was followed by a one-day inpatient hospital stay.
`
`2.
`
`Pursuant to Section 1886(d) of the Social Security Act (the “Act”),
`
`Community Hospital billed the procedure and in-patient stay for each patient to
`
`Medicare Part A (hospital care), under the diagnosis-related group (“DRG”)
`
`appropriate for the cardiac procedure, which determines the allowable Medicare
`
`
`
`USDC IN/ND case 2:22-cv-00028 document 1 filed 02/14/22 page 2 of 8
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`reimbursement for the procedure and hospitalization. Medicare initially paid the
`
`claim for each patient.
`
`3.
`
`Subsequently, the Recovery Audit Contractor reopened the claim and
`
`requested medical records for review. For each patient, the Recovery Audit
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`Contractor, CGI Federal, advised Community Hospital that the hospital stay was
`
`not necessary and reasonable under section 1862(a)(1)(A) of the Act, and that
`
`Community Hospital therefore had received an overpayment.
`
`4.
`
`The Recovery Audit Contractor did not question the medical necessity
`
`of the cardiac procedure itself for any patient. Nevertheless, it advised the
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`Medicare Administrative Contractor at the time, National Government Services, to
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`demand that Community Hospital repay the entire amount that Medicare had paid
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`for the cardiac procedure and one-day hospital stay under Part A, DRG.
`
`5.
`
`National Government Services demanded full repayment, without
`
`offsetting the applicable Medicare Part B (outpatient care), ambulatory patient
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`classification (“APC”) amount for the cardiac procedure followed by outpatient
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`observation. Because the cardiac procedure was medically necessary and at a
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`minimum required outpatient observation after the procedure, Community Hospital
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`should only have been required to repay the difference between the amounts
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`initially paid under Part A, DRG, and the allowable amounts under Part B, APC.
`
`THE PARTIES
`
`6.
`
`Community Hospital is a nonprofit organized in Indiana with its
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`principal place of business in Munster, Indiana.
`
`
`
`-2-
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`
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`USDC IN/ND case 2:22-cv-00028 document 1 filed 02/14/22 page 3 of 8
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`7.
`
`Xavier Becerra is the Secretary of the United States Department of
`
`Health and Human Services (the “Agency”). The Secretary adopts and issues final
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`decisions of the Medicare Appeals Council and is the Defendant in appeals for
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`judicial review under 42 C.F.R. § 405.1136(d).
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`JURISDICTION AND VENUE
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`8.
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`The Court has jurisdiction over this Complaint and appeal for judicial
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`review under 42 C.F.R. § 405.1130. Community Hospital hereby appeals a decision
`
`of the Medicare Appeals Council dated December 15, 2021. A true and accurate
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`copy of the Medicare Appeals Council’s decision is attached as Exhibit A hereto.
`
`Community Hospital is required to file its Complaint within sixty days of receipt of
`
`the decision. 42 C.F.R. § 405.1130. Receipt is presumed within five days after the
`
`date the decision was mailed. 42 C.F.R. § 405.1136(c)(2). Community Hospital’s
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`appeal accordingly is timely.
`
`9.
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`Community Hospital’s principal place of business is in Munster,
`
`Indiana. Venue is therefore proper in this Court. 42 C.F.R. § 405.113(b).
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`10. The amount in controversy for each patient exceeds the current
`
`minimal threshold of $1,760.00. 42 U.S.C. § 1395ff(b); 82 Fed. Reg. 60795.
`
`BACKGROUND AND PROCEDURAL HISTORY
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`11. B.D. received services from October 30, 2008 to October 31, 2008. R.K.
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`received cardiac and one-day inpatient services August 25, 2008 to August 26, 2008.
`
`H.P. received cardiac and one-day inpatient services June 30, 2008 through July 1,
`
`
`
`-3-
`
`
`
`USDC IN/ND case 2:22-cv-00028 document 1 filed 02/14/22 page 4 of 8
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`2008. B.G. received cardiac and one-day inpatient services May 30, 2008 to May 31,
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`2008.
`
`12.
`
`In the instance following the Recovery Audit Contractor’s
`
`determination that Medicare had made an overpayment as to each patient’s
`
`inpatient services, Community Hospital filed a redetermination request with
`
`National Government Services. National Government Services responded
`
`collectively as to all four (and additional) patients on September 8, 2011, providing
`
`that Community Hospital should bill Part B for the ancillary supplies involved in
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`the procedure and to appeal denial of the inpatient admission under Part A.
`
`13. Although Community Hospital responded as to each patient on
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`September 29, 2011 with an amended redetermination request providing that it had
`
`disputed the inpatient denial in its initial request, National Government Services
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`responded as to each patient on November 10, 2011 that it would not conduct a
`
`redetermination because it determined that Community Hospital was not disputing
`
`the denial of the inpatient stay.
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`14. On November 30, 2011, Community Hospital requested that the
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`Qualified Independent Contractor issue a reconsideration determination regarding
`
`the inpatient stay and services for each patient. The Qualified Independent
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`Contractor subsequently dismissed Community Hospital’s request for
`
`reconsideration under 42 C.F.R. § 405.972(b)(6) on the grounds that National
`
`Government Services had not conducted a redetermination.
`
`
`
`-4-
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`
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`USDC IN/ND case 2:22-cv-00028 document 1 filed 02/14/22 page 5 of 8
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`15. Community Hospital made timely requests for Administrative Law
`
`Judge (“ALJ”) hearings before the Office of Medicare Hearings and Appeals, asking
`
`the ALJ to reverse the dismissal by the Qualified Independent Contractor and
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`remand the matter to National Government Services with instructions to perform
`
`the redetermination. The ALJ conducted a hearing as to each patient on August 14,
`
`2012.
`
`16. By decisions dated October 31, 2012, the Administrative Law Judge
`
`upheld the Qualified Independent Contractor’s dismissal of Community Hospital’s
`
`request for reconsideration on the grounds that National Government Services had
`
`not previously conducted a redetermination. A true and accurate copy of the ALJ
`
`decisions are attached as Exhibit B hereto.
`
`17.
`
`In a decision dated December 15, 2021, the Medicare Appeals Council
`
`dismissed Petitioner’s requests for review on the grounds that the Council could not
`
`review an affirmation of the Qualified Independent Contractor’s dismissal of a
`
`request for reconsideration. See Exhibit A.
`
`JUDICIAL REVIEW
`
`18. The Order of the Medicare Appeals Council is final and binding on all
`
`parties. 42 C.F.R. § 405.1130. It accordingly is subject to judicial review as
`
`requested by Community Hospital.
`
`19. Community Hospital has exhausted its administrative remedies by
`
`filing requests for redetermination, reconsideration, an ALJ hearing, and review by
`
`
`
`-5-
`
`
`
`USDC IN/ND case 2:22-cv-00028 document 1 filed 02/14/22 page 6 of 8
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`the Medicare Appeals Council. 42 U.S.C. § 1395ff(b); 42 C.F.R. § 405.1130; 42
`
`C.F.R. § 405.1136.
`
`CLAIMS FOR RELIEF
`COUNT I – THE MEDICARE APPEALS COUNCIL AND ALJ ERRED IN
`NOT REVERSING THE QUALIFIED INDEPENDENT CONTRACTOR’S
`DISMISSAL AND REMANDING IT TO NATIONAL GOVERNMENT
`SERVICES
`
`20. Community Hospital incorporates by reference paragraphs 1 through
`
`
`
`19 of its Complaint as though set out in full herein.
`
`21. The Qualified Independent Contractor dismissed Community
`
`Hospital’s request for redetermination under 42 C.F.R. § 405.972(b)(6) on the
`
`grounds that National Government Services had not conducted a redetermination.
`
`22. National Government Services refused to conduct a redetermination
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`because it determined that Community Hospital did not dispute the denial of the
`
`inpatient stay.
`
`23.
`
`42 C.F.R. § 405.952(b) permits a contractor, including National
`
`Government Services, to dismiss a redetermination request only where1:
`
` (1) When the person or entity requesting a redetermination is
`not a proper party under § 405.906(b) or does not otherwise have a
`right to a redetermination under section 1869(a) of the Act;
`
`(2) When the contractor determines the party failed to make
`out a valid request for redetermination that substantially complies
`with § 405.944;
`
`(3) When the party fails to file the redetermination request
`within the proper filing time frame in accordance with § 405.942;
`
`
`
`1 The regulation is cited in the form in effect at the time of National Government Services’ denial.
`-6-
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`
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`USDC IN/ND case 2:22-cv-00028 document 1 filed 02/14/22 page 7 of 8
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`(4) When a beneficiary or the beneficiary’s representative
`files a request for redetermination, but the beneficiary dies while the
`request is pending, and all of the following criteria apply:
`
`
`(ii) No other individual or entity with a financial interest in
`the case wishes to pursue the appeal; and
`
`(iii) No other party filed a valid and timely redetermination
`request under § 405.942 and § 405.944;
`
`(5) When a party filing the redetermination request submits
`a timely written request for withdrawal with the contractor; or
`
`(6) When the contractor has not issued an initial
`determination on the claim or the matter for which a redetermination
`is sought.
`
`24. National Government Services did not dismiss Community Hospital’s
`
`
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`request for redetermination for any of the grounds provided in 42 C.F.R. § 405.952
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`and was not a “contractor’s dismissal” under the regulation.
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`25. National Government Services’ communication denying
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`redetermination also did not provide notice of the right to request it vacate the
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`dismissal as provided by 42 C.F.R. § 405.952(c).
`
`26. Community Hospital properly sought reimbursement under Part B
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`and offset against the overpayment under Part A.
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`27. The Medicare Appeals Council and the ALJ erred in not reversing the
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`Qualified Independent Contractor’s dismissal and remanding to National
`
`Government Services for redetermination.
`
`
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`-7-
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`
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`USDC IN/ND case 2:22-cv-00028 document 1 filed 02/14/22 page 8 of 8
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`COUNT II – THE AGENCY’S ACTION WAS ARBITRARY AND
`CAPRICIOUS, IN EXCESS OF AUTHORITY AND NOT SUPPORTED BY
`SUBSTANTIAL EVIDENCE
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`28. Community Hospital hereby incorporates by reference paragraphs 1
`
`
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`through 27 of its Complaint as though set out in full herein.
`
`29. Based on the administrative record and procedural history, the
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`decision of the Medicare Appeals Council, which is the final Agency action, was
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`arbitrary and capricious, in excess of its statutory authority, and not supported by
`
`substantial evidence.
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`PRAYER FOR RELIEF
`
`
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`WHEREFORE, Community Hospital respectfully requests that the Court
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`exercise its judicial review and set aside the decision of the Agency, remand the
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`proceedings to the Medicare Appeals Council for redetermination of Community
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`Health’s claims and offset, or direct the Council to remand the proceedings to the
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`ALJ for redetermination of Community Hospital’s claims and offset, and grant
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`Community Hospital all other just and proper relief.
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`Dated: February 14, 2021
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`-8-
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`Respectfully submitted,
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`
`
`
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`
`
`/s/ Jeanine Kerridge
`J. Michael Grubbs
`Jeanine Kerridge
`BARNES & THORNBURG LLP
`11 South Meridian Street
`Indianapolis, IN 46204
`Telephone
`(317) 236-1313
`Facsimile
`(317) 231-7433
`Michael.grubbs@btlaw.com
`Jeanine.kerridge@btlaw.com
`
`Attorneys for Plaintiff, Community Hospital
`
`
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