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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NORTH CAROLINA
`
`Southern Division
`
`Civil Action No.:
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`
`
`COMPLAINT
`
`FIVE POINTS HEALTHCARE OF NC,
`LLC d/b/a NATIVE ANGELS HOME
`HEALTH AGENCY, INC.,
`
` Plaintiff,
`
`v.
`
`XAVIER BECERRA, Secretary of the
`Department of Health and Human Services,
`and CHIQUITA BROOKS-LASURE,
`Administrator for the Centers for Medicare
`and Medicaid Services,
` Defendants.
`___________________________________
`
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`
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`COMPLAINT
`
`
`
`Plaintiff, Five Points Healthcare of NC, LLC d/b/a Native Angels Home Health Agency,
`
`Inc. (“Native Angels” or “Plaintiff”) brings this Complaint against the above-named Xavier
`
`Becerra, Secretary of the Department of Health and Human Services (“HHS”) and Chiquita
`
`Brooks-LaSure, Administrator for the Centers for Medicare and Medicaid Services (“CMS”)
`
`(collectively “Defendants”), in their official capacity and state as follows, and in support thereof
`
`states the following:
`
`INTRODUCTION
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`1.
`
`This is a civil action by Plaintiff to recover Medicare payments improperly
`
`recouped by Defendants in violation of Plaintiff’s due process rights.
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`
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 1 of 11
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`1
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`2.
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`Defendants’ recoupment of the amounts at issue without providing Native Angels
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`the opportunity to be heard by an ALJ, as required by applicable law and the United States
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`Constitution violates Plaintiff’s due process rights.
`
`3.
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`Health care providers, including home health agencies such as Native Angels,
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`furnish services to Medicare beneficiaries, following which they submit claims to HHS, which
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`processes them through the Centers for Medicare and Medicaid Services (“CMS”) and its
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`contractors. The Medicare Modernization Act of 2003 (“MMA”) authorized CMS to conduct post-
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`payment reviews of those claims through the use of contractors.
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`4.
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`Under the MMA, providers such as Native Angels have the right to contest the post-
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`payment denials through an appeals process within HHS, with the last level consisting of judicial
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`review.
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`5.
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`As a result of increasing audit activity by HHS contractors, providers have
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`experienced extraordinary delays in the appeals process, particularly at the ALJ level, which has
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`effectively barred providers from challenging payment denials in a timely and efficient manner.
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`6.
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`Not only has the extraordinary delay stymied timely appeals, it also violates the
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`statute, which requires the ALJ to hold a hearing within 90 days of an appeal being filed. Instead,
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`providers such as Native Angels often wait up to 5 years to have their claims heard by an ALJ. In
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`many instances, the ALJ will deny the provider a hearing based on a technicality or uphold the
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`prior ruling without a hearing, which further deprives the provider of its due process rights.
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`7.
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`Native Angels should be afforded a substantive hearing on its claims, whether it be
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`directly by this Court or, alternatively, by the ALJ upon direct order of this Court.
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`JURSIDICTION AND VENUE
`
`
`
`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 2 of 11
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`8.
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`This Court has jurisdiction over the subject matter of this civil action pursuant to
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`42 U.S.C. § 405, 42 U.S.C. §1395ff(b)(1)(A). Native Angels is also entitled to judicial relief
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`pursuant to the Administrative Procedures Act (“APA”), 5 U.S.C. § 705.
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`9.
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`Plaintiff seeks a judicial review of the actions of adverse decisions by the Medicare
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`Appeals Counsel (“MAC”), and a decision or, in the alternative, a remand to the MAC for a review
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`of its claims on the merits, an award of attorneys’ fees, and any other legal relief this Court deems
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`just.
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`10.
`
`11.
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`This Court has jurisdiction over the Defendant.
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`At all times relevant to this Complaint, Plaintiff has provided covered medical
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`services to patients in Pembroke, North Carolina.
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`12.
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`Venue is proper in the Eastern District of North Carolina, Southern Division
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`pursuant to 42 C.F.R. § 405.1136(b).
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`THE PARTIES
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`A.
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`Plaintiff
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`13.
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`Plaintiff, Five Points Healthcare of NC, LLC d/b/a Native Angels Homecare
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`Agency, Inc. is a Medicare-certified home health agency located in Pembroke, North Carolina that
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`provides skilled nursing care, restorative therapy, and medical social services to patients located
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`in the State of North Carolina with its principal place of business in Pembroke, North Carolina,
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`which is located in Robeson County.
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`B.
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`Defendants
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`14.
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`Secretary Becerra is the Secretary of the Department of Health and Human Services
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`and the proper defendant pursuant to 42 C.F.R. § 405.1136(d).
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`
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 3 of 11
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`15.
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`Administrator Brooks La-Sure is the Administrator of the Centers for Medicare and
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`Medicaid Services and the proper defendant pursuant to 42 C.F.R. § 405.1136(d).
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`16.
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`The amount in controversy is more than $1,760.00, not counting interests and costs
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`of courts because Plaintiff is seeking Medicare reimbursement for services rendered.
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`BACKGROUND FACTS
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`17.
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`This action is an appeal of two decisions by the Medicare Appeal Council:
`
`Docket Number: M-20-2956
`ALJ Appeal Number: 3-34-18043294
`Dated: March 21, 2022
`
`Docket Number: M-21-230
`ALJ Appeal Number: 3-3416842011
`Dated: March 17, 2022
`
`
`
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`MAC Docket Number M-20-2956/ALJ Appeal Number 3-3418043294
`
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`18.
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`The Medicare recipient at issue in this appeal received medically necessary, home
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`health care services from Native Angels from August 26, 2014, to October 24, 2014, in the amount
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`of $1,085.01.
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`19.
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`On November 12, 2014, Plaintiff received the initial additional documents request
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`(“ADR”) from ZPIC.
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`20.
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`On November 14, 2014, Plaintiff mailed to ZPIC AdvanceMed (“ZPIC”) the
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`requested records.
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`21.
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`The ADR was due by December 5, 2014, and Plaintiff submitted the documents to
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`the ZPIC well in advance of the deadline.
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`22.
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`ZPIC delayed in sending the information and supporting records to Palmetto GBA,
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`LLC (“Palmetto”) due to no fault of Plaintiff.
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`
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 4 of 11
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`23.
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`Shelly Williamson, employee of the ZPIC, stated on three occasions that he
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`acknowledged the timely receipt of the requested supporting records and stated that the records
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`had been sent to Palmetto.
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`24.
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`25.
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`On January 13, 2015, Plaintiff received a denial of the claim from Palmetto.
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`On May 22, 2015, Palmetto, CMS’s Part B Medicare Administrative Contractor for
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`North Carolina, denied Plaintiff’s appeal by Redetermination Notice of Dismissal based on the
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`records being submitted late, which was due to the ZPIC, not Plaintiff.
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`26.
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`On July 2, 2015, Plaintiff received Palmetto’s denial of the request to vacate the
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`dismissal.
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`27.
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`On July 28, 2015, Plaintiff submitted its request for reconsideration for good faith
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`reconsideration of this claim. Plaintiff’s request for reconsideration was based on the fact that
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`ZPIC did not timely submit information and medical records to Palmetto, thereby causing the
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`initial denial of Plaintiff’s claim on May 22, 2015.
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`28.
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`29.
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`On July 31, 2015, Palmetto received Plaintiff’s request for reconsideration.
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`On September 16, 2015, Palmetto denied Plaintiff’s request for reconsideration of
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`its notice of dismissal on the basis that it was received more than 60 days after the Plaintiff’s
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`receipt of Palmetto’s notice of dismissal.
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`30.
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`31.
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`On January 4, 2016, Plaintiff filed a valid request for ALJ review of the dismissal.
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`On May 14, 2020, the ALJ, after a more than 4-year delay, issued a dismissal order
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`of Plaintiff’s request for reconsideration without conducting a substantive hearing on the merits of
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`the action.
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`32.
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`On May 29, 2020, Plaintiff submitted to the Medicare Appeals Council, a Request
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`for Review of Administrative Law Judge (ALJ) Medicare Decision/Dismissal.
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`
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 5 of 11
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`33.
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`On March 21, 2022, the Medicare Appeals Council, by Chair, Departmental
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`Appeals Board, Constance B. Tobias, issued an “Order of Medicare Appeals Counsel Dismissing
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`Request for Review” (March 21, 2022, Order, attached as Exhibit 1). The March 21st Order
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`dismissed the Appellant Native Angels request for review on the basis that it was unable to review
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`the ALJ’s action in this case, citing to 42 C.F.R. § 405.1102(c).
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`MAC Docket Number – M-21-230/ALG Appeal Number 3-3416842011
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`34.
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`The patient at issue in this appeal received home health care services from Native
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`Angels from October 7, 2014, to December 5, 2014, in the amount of $2,606.29.
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`35.
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`36.
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`On December 12, 2014, Plaintiff received the initial ADR from ZPIC.
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`On December 12, 2014, the same day as the request, Plaintiff mailed to ZPIC
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`AdvanceMed (“ZPIC”) the requested records.
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`37.
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`The ZPIC delayed in sending the information and supporting records to Palmetto
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`due to no fault of Plaintiff.
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`38.
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`Shelly Williamson of ZPIC stated on three occasions that acknowledged the timely
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`receipt of the requested supporting records and stated that the records had been sent to Palmetto.
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`39.
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`On May 22, 2015, Palmetto, CMS’s Part B Medicare Administrative Contractor for
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`North Carolina, reviewed and then denied Plaintiff’s appeal by Redetermination Notice of
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`Dismissal
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`40.
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`On July 2, 2015, Plaintiff received Palmetto’s denied of the request to vacate the
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`dismissal.
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`41.
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`On July 29, 2015, Plaintiff submitted its request for reconsideration for good faith
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`reconsideration of this claim. Plaintiff’s request for reconsideration was based on the fact that
`
`
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 6 of 11
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`6
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`ZPIC did not timely submit information and medical records to Palmetto, thereby causing the
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`initial denial of Plaintiff’s claim on May 22, 2015.
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`42.
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`43.
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`On July 31, 2015, Palmetto received Plaintiff’s request for reconsideration.
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`On September 17, 2015, Palmetto denied Plaintiff’s request for reconsideration of
`
`its notice of dismissal on the basis that it was received more than 60 days after the Plaintiff’s
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`receipt of Palmetto’s notice of dismissal.
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`44.
`
`On May 20, 2016, Maximus QIC sent Plaintiff a letter that it not issued a decision
`
`on Plaintiff’s appeal within the required 60 day time period.
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`45.
`
`On June 23, 2016, Plaintiff filed a valid request for hearing on the merits by the
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`ALJ.
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`46.
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`On September 16, 2020, 2020, the ALJ, after a more than 4-year delay, issued a
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`dismissal order of Plaintiff’s request for reconsideration without conducting a substantive hearing
`
`on the merits of the action.
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`47.
`
`On October 21, 2020, Plaintiff submitted to the Medicare Appeals Council, a
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`Request for Review of Administrative Law Judge (ALJ) Medicare Decision/Dismissal.
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`48.
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`On March 17, 2022, the Medicare Appeals Council, by Administrative Appeals
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`Judge Jordy Hirschfeld, issued an “Order of Medicare Appeals Counsel Dismissing Request for
`
`Review” (March 17, 2022, Order, attached as Exhibit 2). The March 17th Order dismissed the
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`Appellant Native Angels request for review on the basis that it was unable to review the ALJ’s
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`action in this case, citing to 42 C.F.R. § 405.1102(c).
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`CLAIMS FOR RELIEF
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`COUNT I – PROCEDURAL DUE PROCESS
`
`49.
`
`The allegations contained in Paragraphs 1 - 48 of the Complaint are incorporated
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`
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 7 of 11
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`by reference as if fully set out herein.
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`50.
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`The procedures utilized by Defendants to recoup alleged overpayments from Native
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`Angels are constitutionally deficient as they force Native Angels to make repayments without even
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`providing for a hearing on the merits of its claim.
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`51.
`
` To satisfy the requirements of due process, the Defendants are statutorily required
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`to provide a home health agency such as Native Angels with an administrative hearing and an
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`opportunity to challenge the alleged overpayment determinations before a fair and impartial
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`decision maker prior to imposing the recoupment of funds.
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`52.
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`Defendants have threatened to deprive Native Angels of its property interests in or
`
`associated with its Medicare payments and home health business without due process of law, in
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`violation of the Fifth Amendment of the United States Constitution and other applicable law.
`
`53.
`
`54.
`
`Plaintiff suffered damages as a direct result of Defendant’s actions.
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`Defendants’ failure to provide the ALJ hearing deprives Plaintiff of due process
`
`rights under 42 C.F.R. § 405.1000 including the rights to :
`
`a. Submit evidence;
`
`b. Examine the evidence used in making the determinations under review;
`
`c. Present and question witnesses; and
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`d. Supplement the administrative record with the ALJ hearing record.
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`COUNT II – ULTRA VIRES
`
`55.
`
`The allegations contained in Paragraphs 1 through 48 of the Complaint are
`
`incorporated by reference as if fully set out herein.
`
`56.
`
`Defendants are required to provide Native Angels with an ALJ hearing and decision
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`within 90 days of its request. 42 U.S.C. § 1395ff(d)(1)(A); 45 C.F.R. § 405.1016(a).
`
`
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 8 of 11
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`8
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`57.
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`Defendants have engaged in recoupment against Plaintiff while ignoring their
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`statutory obligations, event though they did not provide an ALJ hearing within the statutorily
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`required time period.
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`58.
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`The Court should enjoin Defendants from engaging in such ultra vires actions
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`against Native Angels, which actions are contrary to the limitations on the Defendants’ authority
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`as set forth in Title XVIII of the Social Security Act.
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`59.
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`Plaintiff suffered damages as a direct result of Defendant’s unlawful actions.
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`
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`COUNT III – PRESERVATION OF STATUS OF RIGHTS UNDER SECTION 704 OF
`THE APA
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`The allegations contained in paragraphs 1 through 48 of the Complaint are
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`60.
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`incorporated by reference as if fully set out herein.
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`61.
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`In relevant part, the Administrative Procedure Act provides that “[o]n such
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`conditions as may be required and to the extent necessary to prevent irreparable injury, the
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`reviewing court, including the court to which a case may be taken on appeal from or on
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`application for certiorari or other writ to a reviewing court, may issue all necessary and
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`appropriate process to postpone the effective date of an agency action or to preserve status or
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`rights pending conclusion of the review proceedings.” 5 U.S.C. § 705.
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`62.
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`This Court is a “reviewing court” and a “court to which a case may be taken on
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`appeal.” 42 U.S.C. §§ 405(g), 1395ii.
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`63.
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`Plaintiff suffered damages as a direct result of Defendant’s actions.
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`RELIEF REQUESTED
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`WHEREFORE, the Plaintiff respectfully request that this Court do the following:
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 9 of 11
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`1.
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`2.
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`3.
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`the merits;
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`Accept jurisdiction of this cause and set it for hearing on the merits;
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`Award Plaintiff damages in the amount of at least $3,691.30;
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`Alternatively, remand this matter to the Medicare Review Council for review on
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`4.
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`Grant Plaintiff costs as allowable by 28 U.S.C. § 1920, and attorneys’ fees as
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`allowable by statute, if any, including for example, the Equal Access to Justice Act, 28 U.S.C. §
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`2412 (d)(1)(A) based upon a finding that the Defendants’ position is not substantially justified;
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`and
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`5.
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`Grant such further relief as the Court deems just and proper.
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`CERTIFICATION AND CLOSING
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`Under Federal Rule of Civil Procedure 11, by signing below, I certify to the best of my
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`knowledge, information, and belief that this complaint: (1) is not being presented for an improper
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`purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;
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`(2) is supported by existing law or by a nonfrivolous argument for extending, modifying, or
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`reversing existing law; (3) the factual contentions have evidentiary support or, if specifically so
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`identified, will likely have evidentiary support after a reasonable opportunity for further
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`investigation or discovery; and (4) the complaint otherwise complies with the requirements of Rule
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`11.
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`[Remainder of Page Intentionally Blank]
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 10 of 11
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`Respectfully submitted May 23, 2022.
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`PRACTUS, LLP
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`
`s/Knicole C. Emanuel
`Knicole C. Emanuel
`N.C. Bar No.: 37795
`350 E. Six Forks Rd.
`Box 31345
`Raleigh, NC 27622
`Telephone: (919) 219-9319
`Email: knicole.emanuel@practus.com
`Attorney for Petitioner
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`Case 4:22-cv-00049-D Document 1 Filed 05/23/22 Page 11 of 11
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