Case 4:21-cv-00665 Document 1 Filed 08/26/21 Page 1 of 28 PageID #: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE EASTERN DISTRICT OF TEXAS
`(Sherman Division)
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` CIVIL ACTION NO. 4:21-cv-00665
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`MEDSTRIVE, L.L.C.,
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`Plaintiff,
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`vs.
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`XAVIER BECERRA, Secretary,
`UNITED STATES
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`DEPARTMENT OF HEALTH
`AND HUMAN SERVICES,
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`Defendant.
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`VERIFIED COMPLAINT
`FOR INJUNCTIVE AND DECLARATORY RELIEF AND ATTORNEY FEES
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`COMES NOW, Medstrive, L.L.C. (the “Plaintiff” or “Medstrive”), and files this its
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`Verified Complaint for Injunctive and Declaratory Relief and Attorney Fees against Xavier
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`Becerra, Secretary of the United States Department of Health and Human Services (the
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`“Defendant”), and alleges and avers as follows:
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`INTRODUCTION
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`On March 17, 2020, HHS issued a Medicare payment suspension to withhold all
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`1.
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`earned payments for services rendered by Medstrive, a durable medical equipment prosthetics,
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`orthotics, and supplies supplier ("DMEPOS" or “DME”). These payments will be applied toward
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`a Medicare overpayment should one be subsequently determined by HHS. However, the
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`government provided no appeal or right to hearing to dispute or contest the action. Accordingly,
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`Plaintiff moves to temporarily enjoin HHS’s “suspension” of its Medicare payments during the
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`COVID-19 emergency or until the government provides a hearing on the adverse action in
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`conformance with Due Process of Law. The suspension will irreparably harm Plaintiff by
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`forcing it out of business and into bankruptcy, and it jeopardizes the health and safety of the
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`provider’s patients by disrupting their services and requiring that they obtain them elsewhere in
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`the Houston area, a “hot spot” of the COVID-19 outbreak.
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`2.
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`Medstrive is a supplier of durable medical equipment, prosthetics, orthotics, and
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`supplies (DMEPOS) that delivers durable medical equipment (DME) to patients in their homes
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`in the greater-Denison area. To be covered, the DME must be necessary and reasonable for
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`treating an illness or injury or improving the function of a malformed body member. For such
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`medical equipment to be billed to Medicare, the supplier must receive a signed certificate of
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`medical necessity (CMN) from the treating physician. In addition, the supplier must have a
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`signed original, faxed, photocopied, or electronic CMN in its records before it can submit a claim
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`for payment to Medicare. In addition to the CMN requirement, CMS has designated a list of
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`certain covered items, referred to as Special Covered Items, that require a written order. They
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`include, among others, any items of DME that appear on the durable medical equipment,
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`prosthetics, orthotics, and supplies fee schedule with a price ceiling at or greater than $1,000.
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`3.
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`On April 9, 2021, Defendant noticed the imposition of a Medicare payment
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`suspension of Plaintiff’s Medicare payments. The suspension was brought under 42 C.F.R. §
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`405.371(a)(2) based upon a “credible allegation of fraud.” CMS, the federal agency that
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`administers the Medicare program, based its decision upon its mistaken belief that “Medstrive is
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`in violation of Medicare DMEPOS Supplier Standard #11 by soliciting Medicare beneficiaries.”
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`According to CoventBridge, “Medstrive bills Medicare for orthotics that neither the beneficiaries
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`nor their primary care physicians have requested and are medically unnecessary.” In fact, CMS
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`asserts that the DME supplier has committed fraud by providing orthotics devices under the
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`guise of using “generic diagnoses” to provide multiple orthotics to every beneficiary for areas of
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`2
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`the body never treated by their physicians. Of course, this ignores that the product was
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`prescribed by a treating practitioner and supported by information from the patients’ medical
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`records in all instances. As a result of the suspension action, all Medicare payments owed to the
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`supplier are being withheld pending resolution of the ongoing investigation.
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`4.
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`Like “the Sword of Damocles,” the government threatens prosecution for fraud,
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`alleging Plaintiff has incorrectly reported diagnoses or procedures to maximize Medicare
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`payments wrongly. However, Plaintiff has no right to an administrative appeal to challenge or
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`otherwise dispute these allegations. Yet, its Medicare payments are “suspended” and may be
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`interrupted for a year or longer. And even then, the provider may have no legal recourse to
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`challenge the adverse action.
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`5.
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`Unfortunately, the suspension action could not have come at a worse time.
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`President Donald Trump declared a national emergency over the COVID-19 outbreak on March
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`13, 2020. Dr. Deborah Birx, White House Coronavirus Response Coordinator, reported that U.S.
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`deaths caused by COVID-19 might be catastrophic. She said that Dr. Anthony Fauci, Director of
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`the National Institute of Allergy and Infectious Diseases, has predicted U.S. deaths could range
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`from 1.6 to 2.2 million in a worst-case scenario and projected 100,000 to 200,000 in a best-case
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`scenario. Thus far, the United States has reported 625,375 deaths through August 20, 2021.1 In
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`addition, the U.S. Department of Health and Human Services Secretary, Xavier Becerra, signed a
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`renewal of determination that extended the current COVID-19 public health emergency by 90
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`days, effective July 20, 2021.2 The virus has had a substantial impact on our nation’s hospitals
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`1 In at least 90% of these deaths, COVID-19 was listed as the underlying cause of death. For the remaining deaths,
`COVID-19 was listed as a contributing cause of death. https://covid.cdc.gov/covid-data-
`tracker/#trends_totaldeaths_ totaldeathsper100k.
`2 https://aasm.org/hhs-extends-covid-19-public-health-emergency-january-2021/.
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`3
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`and a cascading effect on ancillary providers and practitioners.3 Suffice it to say, DME suppliers
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`face tremendous challenges as they attempt to treat an ever-growing patient base due to the
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`COVID-19 infection.
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`6.
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`The impact of the Medicare payment suspension threatens to force Plaintiff’s
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`closure and filing of bankruptcy. The DME supplier derives approximately 60% of its revenues
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`from providing sick and elderly Medicare patients durable medical equipment. Obviously, if the
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`provider is not paid for these supplies, it cannot pay its employees, who provide necessary
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`treatment options, to these very needy patients.
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`7.
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`If Plaintiff is forced to close, Plaintiff’s patients will have to obtain their medical
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`equipment elsewhere. Indeed, due to the COVID-19 outbreak, the ability to secure such services
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`is limited. It is evident that the healthcare industry, including medical suppliers, in Texas is
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`facing a crisis due to the pandemic. Plaintiff strives to maintain a balance between care for its
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`employees and those patients who rely on Plaintiff’s supplies during this unprecedented time.
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`With the prospect of burgeoning coronavirus visits combined with the suppliers achieving this
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`type of balance, it will undoubtedly result in a scramble on behalf of patients to obtain supplies
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`because of COVID-19.
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`8.
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`Had Defendant acted properly, it would not have imposed the suspension.
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`Federal regulations provide that CMS may find good cause exists not to suspend a supplier’s
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`Medicare payments where it is determined that beneficiary access to items or services would be
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`so jeopardized by a payment suspension in whole or in part as to cause a danger to life or health.
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`42 C.F.R. § 405.371(b)(1)(ii). It is a clear abuse of discretion for CMS not to find that good
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`3 The Trump Administration announced a wide array of temporary regulatory waivers and new rules to equip the
`American health care system, including DME Suppliers, with maximum flexibility to respond to the COVID-19
`pandemic. These temporary regulatory waivers are still in effect during the Current Administration.
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`4
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`cause exists here when the COVID-19 pandemic and the surge of confirmed coronavirus cases is
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`adversely affecting America’s healthcare system, including DME suppliers.4 Not only will
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`Plaintiff be forced to shut down, but the government’s suspension action also places an even
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`greater burden on the already overworked healthcare community.5
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`9.
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`Notwithstanding the abuse of discretion, Medstrive has a constitutional property
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`interest in payments for services rendered and is now indefinitely suspended during the
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`investigation into the adequacy of its documentation. Defendant violates Due Process of Law by
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`imposing the adverse action during the COVID-19 pandemic and national emergency when it
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`fails to give notice and an opportunity for a hearing to contest the Medicare payment suspension.
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`Indeed, the provider has no administrative appeal rights to contest the suspension. Clearly, there
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`is a high risk that Plaintiff will be erroneously deprived of its property interest in earned
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`Medicare payments withheld by suspension, pursuant to 42 C.F.R. § 405.371(a)(2), because the
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`supplier is not entitled to an administrative appeal to dispute and contest the adverse action, HHS
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`has abused its discretion and not found good cause not to impose the adverse action, and there is
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`absolutely no established time frame for resolving the investigation of its documentation.
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`10. Moreover, patients at Medstrive have a constitutional Due Process right
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`(consistent with principles of equal protection) to obtain safe and reliable medical equipment
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`4 Aside from the jeopardy to patients, the impact of the suspension is at odds with the coronavirus stimulus package.
`On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was enacted, an economic
`relief package in response to the COVID-19 pandemic. The CARES Act provides economic support at the federal
`level to the business sector, employees, individuals and families, and specific industries that have been impacted,
`including air transportation, healthcare, and education. Key provisions providing for loan forgiveness require that
`workers need to remain employed.
`5 HHS’s Office of Inspector General issued a message on minimizing burdens to providers on March 30, 2020. It
`stated that the OIG places a high priority on providing the health care community with the flexibility to provide
`needed care during this emergency. The delivery of patient care during this public health emergency must be the
`primary focus of the health care industry. For any conduct during this emergency that may be subject to OIG
`administrative enforcement, OIG will carefully consider the context and intent of the parties when assessing whether
`to proceed with any enforcement action. In view of the consequences, a review that is primarily focused on
`documentation that allegedly failed to support the complexity of claimed services does not warrant suspension of
`Medicare payments during the COVID-19 pandemic and national emergency.
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`5
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`under a federal Medicare program. HHS violates the patients’ right to access such healthcare by
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`imposing the suspension during the COVID-19 pandemic and national emergency. Due to the
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`COVID-19 outbreak securing such essential healthcare supplies is uncertain. In fact, during the
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`crisis, these patients may only be able to obtain medically necessary durable medical equipment
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`through Plaintiff’s DME supplier. Clearly, good cause exists for Defendant not to suspend the
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`DME supplier’s Medicare payments. Given, the beneficiary’s access to items or services is
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`jeopardized, and the risk of patient abandonment causes a danger to life or health. See 42 C.F.R.
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`§ 405.371(b)(1)(ii).
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`11.
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`Plaintiff is entitled to injunctive relief that requires Defendant to temporarily
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`rescind the Medicare payment suspension during the COVID-19 pandemic and national
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`emergency and release all suspended payments until the national emergency is lifted or
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`Defendant otherwise gives notice and an opportunity for a hearing on the adverse action in
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`conformance with Due Process of Law. Clearly, the government’s ill-advised Medicare payment
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`suspension during the COVID-19 pandemic and national emergency will irreparably harm
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`Plaintiff by destroying its business and forcing its closure. Further, it clearly jeopardizes the
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`health and safety of the provider’s patients and violates their Due Process right (consistent with
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`principles of equal protection) to access essential healthcare services. Moreover, the
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`government’s action will place a more significant burden on area providers and practitioners.
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`Defendant’s egregious ultra vires conduct can only be remedied by an order for injunctive relief
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`otherwise unavailable through the administrative process. Accordingly, Plaintiff is entitled to
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`injunctive relief that requires Defendant to rescind the Medicare payment suspension during the
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`COVID-19 pandemic and national emergency, as well as release all suspended payments until
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`6
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`the emergency ends or Defendant can otherwise give notice and a hearing in conformance with
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`Due Process of law.6
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`PARTIES
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`12. Medstrive, L.L.C., is a Texas limited liability company with its principal place of
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`business at 416 W. Main Street, Denison, Texas. It provides medical equipment to the northern
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`Grayson County area.
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`13.
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`Defendant, Xavier Becerra, in his official capacity, is the Secretary of the United
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`States Department of Health and Human Services (“HHS”), the governmental department which
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`contains the Centers for Medicare and Medicaid Services (“CMS”), the agency within HHS that
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`is responsible for the administration of the Medicare and Medicaid programs. He may be served
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`with process in accordance with Rule 4 of the Federal Rules of Civil Procedure by serving the U.S.
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`Attorney for the district where the action is brought, serving the Attorney General of the United
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`States in Washington, D.C., by certified mail, or by serving the United States Department of
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`Health and Human Services by certified mail.
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`JURISDICTION
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`14.
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`The Court has jurisdiction pursuant to 28 U.S.C. § 1331 under the
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`entirely collateral Constitutional claim exception to the Medicare exhaustion requirement
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`established by Mathews v. Eldridge, 424 U.S. 319 (1976). Defendant’s imposition of the
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`Medicare payment suspension during the COVID-19 pandemic and national emergency without
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`giving notice and an opportunity for a hearing to contest the adverse action violates Due Process
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`6 Recently, in Family Rehabilitation, Inc. v. Azar, 886 F.3d 496 (5th Cir. 2018), the Fifth Circuit held the trial court
`had jurisdiction under the collateral-claim exception to the administrative exhaustion requirement over a provider’s
`due process and ultra vires claims. The provider brought an action to prevent recoupment until a hearing could be
`provided in accordance with 42 U.S.C. § 1395ff(d) and in conformance with Due Process of Law.
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`7
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`of Law. There is a high risk that Plaintiff will be erroneously deprived of its property interest in
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`Medicare payments it has earned for services rendered and withheld indefinitely by the
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`suspension, pursuant to 42 C.F.R. § 405.371(a)(2) because the provider is not entitled to notice
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`and opportunity for a hearing to dispute and contest the suspension, and there is absolutely no
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`established time frame for resolving the investigation. Thus, Plaintiff is deprived of an
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`administrative appeal, which effectively prevents the provider from exhausting administrative
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`remedies to challenge the payment suspension. No administrative or judicial review is otherwise
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`available to contest Defendant’s ultra vires actions. Such failure violates Plaintiff’s
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`constitutional right of Due Process guaranteed by the U.S. CONST. amend. V, § 1. Moreover, the
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`Medicare payment suspension and the request to temporarily rescind the action is not a benefits
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`determination but an otherwise unreviewable procedural issue. Jurisdiction is based upon
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`Plaintiff’s constitutional claim that is collateral to a substantive claim for benefits. Likewise,
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`Defendant violates Plaintiff’s patients’ right to access such healthcare by imposing the
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`suspension during the COVID-19 pandemic and national emergency.
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`15.
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`Additionally, the Court has jurisdiction over the lawsuit pursuant to 42 U.S.C. §§
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`405(g), 1395ii and 1395ff(b), and on the authority of Shalala v. Illinois Council on Long Term
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`Care, Inc., 529 U.S. 1 (2000). Defendant’s failure to extend to Plaintiff an administrative appeal
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`to contest the Medicare payment suspension violates Due Process of Law. Thus, Plaintiff is
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`deprived of an administrative appeal, which effectively prevents the provider from exhausting
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`administrative remedies to challenge the payment suspension. No administrative or judicial
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`review is otherwise available to contest Defendant’s ultra vires actions. Section 405 of the
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`statute “would not simply channel review through the agency but would mean no review at all.”
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`Illinois Council, 529 U.S. at 17. Therefore, the exhaustion requirement is excepted under Bowen
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`8
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`v. Michigan Academy of Family Physicians, 476 U.S. 667 (1986). This exception was explicitly
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`reaffirmed by Illinois Council, 529 U.S. at 19-23. The amount in controversy exceeds the $1,000
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`jurisdictional limit.
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`VENUE
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`16.
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`Venue is proper in this Court under 42 U.S.C. §§ 505(g), 1395ii and 1395ff(b),
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`and 28 U.S.C. §§ 1391(b) and (e), and 5 U.S.C. § 703.
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`APPLICABLE MEDICARE LAWS
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`The Medicare Program
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`17.
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`As part of the Social Security Amendments of 1965, Congress established the
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`Medicare program: a national health insurance plan to cover the cost of medical care for the
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`elderly and disabled. See 42 U.S.C. § 1395 et seq. Officially known as “Health Insurance Benefits
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`for the Aged and Disabled,” it provides basic protection against the costs of inpatient hospital
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`and other institutional provider care. It also covers the costs of physician and other healthcare
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`practitioner services and items not covered under the basic program. In 1997, beneficiaries were
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`extended the option of choosing a managed care plan. More recently, in 2006, the program was
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`expanded further to include a prescription drug benefit.
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`Durable Medical Equipment
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`18. Medicare pays for the rental or purchase of durable medical equipment if the
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`equipment is used in a beneficiaries’ home or an institution used as a home. See 42 U.S.C. §
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`1395x(s)(6). Part B covers leg, arm, back, and neck braces, trusses, artificial legs and arms, and
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`eyes when furnished incident to a physician’s services or on a physician’s order. See 42 U.S.C.
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`9
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`§ 1395x(s)(9); 42 C.F.R. § 410.36(a)(3). Braces include rigid and semi-rigid devices that
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`support weak areas of a malformed body member or to restrict or eliminate motion in diseased or
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`injured parts of the body. Back braces include but are not limited to special corsets, including
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`sacroiliac, sacrolumbar and dorsolumbar corsets, and belts. Elastic stockings, garter belts, and
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`similar devices do not come within the definition of a brace. Pub. 100.02, Ch. 15, § 130.
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`19.
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`To be covered, the DME must provide necessary and reasonable treatment of an
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`illness or injury which improves the functioning of a malformed body member. Ordinarily, the
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`physician’s prescription for the equipment and other information available to the Medicare
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`contractor will be sufficient to establish that the equipment meets this requirement. Pub. 100.02,
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`Ch. 15, § 110.1. For items or services billed to a Medicare contractor, the DME supplier must
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`receive a certificate of medical necessity (CMN) from the patient’s treating physician. The
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`supplier must have executed CMN in its records before it can submit a claim payment to
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`Medicare. Pub. 100.08, Ch. 1, § 1. In addition to the CMS requirement, HHS has designated a
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`list of certain DME items, referred to as Special Covered items, that require a written order.
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`42 U.S.C. § 1395m(11)(B)(i); 42 C.F.R. § 410.38(g)(1).
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`Payment and Audit Functions
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`20. Medicare’s payment and audit functions are performed by various federal
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`contractors. For instance, the payment of durable medical equipment claims at issue, in this case,
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`was made by AdvanceMed. Various other contractors, like Qlarant, a Unified Program Integrity
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`Contractor (“UPIC”), investigate instances of suspected fraud, waste, and abuse as well as identify
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`any improper payments that are to be collected by Administrative Contractors.
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`10
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`Appeal Process
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`21.
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`DME suppliers participating in the Medicare program are entitled to appeal the
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`initial determination. See 42 U.S.C. § 1395ff. Federal regulations establish an elaborate
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`administrative appeal process to review the adverse action. See 42 C.F.R. Subpart I –
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`Determinations, Redeterminations, Reconsiderations, and Appeals Under Original Medicare.
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`A provider dissatisfied with an initial determination may request a Redetermination by a
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`contractor in accordance with 42 C.F.R. §§ 405.940-405.958. The Redetermination must be
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`issued within sixty (60) calendar days. If a provider is dissatisfied with a Redetermination
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`decision, it may request a Reconsideration by a Qualified Independent Contractor (“QIC”) in
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`accordance with 42 C.F.R. §§ 405.960-405.986. The Reconsideration must be issued within sixty
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`(60) calendar days. In the event the provider is dissatisfied with the Reconsideration decision, it
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`may request an ALJ hearing in accordance with 42 C.F.R. §§ 405.1000-405.1054. The ALJ must
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`issue a decision within ninety (90) calendar days. The provider may request a review of the
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`ALJ’s decision by the Medicare Appeals Council in accordance with 42 C.F.R. §§ 405.1100-
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`405.1140. The Council must issue a decision within ninety (90) calendar days. The Council’s
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`decision is the final agency action, and it is subject to judicial review. See 42 U.S.C. § 1395ff; 42
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`C.F.R. §§ 405.1130, 405.1132, 405.1134; see also 42 U.S.C. § 405(g).
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`Suspension of Medicare Payments
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`22. Medicare payments to providers may be suspended, in whole or in part, by CMS
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`or its contractors if there is “reliable information that an overpayment exists.” 42 C.F.R.
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`§ 405.371(a)(1).
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`11
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`23.
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`In cases of suspected fraud, CMS or its contractors may suspend Medicare
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`payments where there is a “credible allegation of fraud” against the provider unless there is good
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`cause not to suspend payments. 42 C.F.R. § 405.371(a)(2).
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`24.
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`CMS may find that good cause exists not to suspend a provider’s payments
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`where, among other things, it is determined that beneficiary access to services would be so
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`“jeopardized by a payment suspension” as to cause a “danger to life or health.” 42 C.F.R.
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`§ 405.371(b)(ii).
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`25.
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`Every 180 days after the initiation of a suspension of payments based on a
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`credible allegation of fraud, CMS will evaluate whether there is good cause to extend the
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`suspension. 42 C.F.R. § 405.371(b)(2). Good cause to not continue a suspension is deemed to
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`exist if it has been in effect for 18 months and there has not been a resolution of the
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`investigation. 42 C.F.R. § 405.371(b)(3). However, the suspension can be continued
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`indefinitely if the case has been referred to OIG for enforcement action or the DOJ requests that
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`it be continued based on the ongoing investigation and anticipated filing of a criminal or civil
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`action or both. 42 C.F.R. §§ 405.371(b)(3)(i), (ii).
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`Rebuttal Statement
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`26.
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`A provider whose payments are suspended without notice, as in this case, is given
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`by the Medicare contractor an opportunity to submit a rebuttal statement as to why the
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`suspensions should be removed. 42 C.F.R. § 405.372(b)(2). See also 42 C.F.R. § 405.374.
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`When a rebuttal statement is submitted, CMS, or its contractor, within 15 days from the date of
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`12
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`its receipt, must provide written notice of the determination. The rebuttal determination is not an
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`appealable decision. 42 C.F.R. §§ 405.375(a)-(c).7
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`CONDITIONS PRECEDENT
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`27.
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`All conditions precedent have been performed or have occurred.
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`FACTS
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`DME Supplier
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`28. Medstrive is a DME supplier located in Denison, Texas, participating in the
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`Medicare program.
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`29.
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`Plaintiff has been in operation in the northeastern Grayson County area for over
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`15 years. The provider derives approximately 60% of its revenue from Medicare payments, and
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`it has an estimated value of approximately $9 million.
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`30. Many of Plaintiff’s patients have recently experienced hospitalization or frequent
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`emergent care treatment and potentially debilitating injuries before their prescription for durable
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`medical equipment.
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`AdvanceMed’s On-site Records Request
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`31.
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`Between February 28, 2019, and July 27, 2019, Plaintiff received requests from
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`AdvanceMed, a Medicare contractor for medical records on five beneficiaries: L.T., C.C., B.M.,
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`F.F., R.M. Each time the requests were responded to adequately and timely. The letter issued by
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`AdvanceMed informed Plaintiff it would be conducting a review of selected claims it had
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`submitted to Medicare and/or Medicaid. The letter explained that the records it requested
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`7 The suspension is not considered an “initial determination” and no appeal rights, including right to ALJ hearing,
`are extended to a provider to contest the adverse action.
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`13
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`included all documentation to support the medical necessity of services billed for the specified
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`dates of service on an attached list plus the proceeding 60 days. Essentially, the request asked
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`Plaintiff to produce all records related to or which support the subject Medicare claims,
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`including records maintained by the patient’s physician or hospital documentation (during the
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`qualifying period). Indeed, documents that Plaintiff is not required or otherwise does not possess
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`in the ordinary course of business.
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`32.
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`On or November 1, 2019, Plaintiff produced all pertinent records available to the
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`provider that were responsive to AdvanceMed’s records request.
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`Medicare Payment Suspension
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`33.
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`April 9, 2021, CoventBridge Group, a Medicare contractor, issued Plaintiff a
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`notice of suspension of Medicare payments. The suspension took effect on April 9th because
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`CMS had asserted that prior notice was “not appropriate,” citing 42 C.F.R. §§ 405.372(a)(3) and
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`(4). The suspension action was brought under 42 C.F.R. § 405.371(a)(2) and alleged a “credible
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`allegation of fraud.”
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`34.
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`As a result of the suspension action, all Medicare payments owed to the provider
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`are being withheld pending resolution of the ongoing investigation.
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`
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`35.
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`According to the Medicare contractor, the decision to suspend Medstrive’s
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`Medicare payments was made by CMS, the federal agency that administers the Medicare
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`program.
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`36.
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`CoventBridge Group asserted in its correspondence that CMS based its decision
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`upon the belief that “Medstrive is in violation of Medicare DMEPOS Supplier Standard #11 by
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`soliciting Medicare beneficiaries.” It also alleged that “Medstrive bills Medicare for orthotics
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`14
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`Case 4:21-cv-00665 Document 1 Filed 08/26/21 Page 15 of 28 PageID #: 15
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`that neither the beneficiaries nor their primary care physicians have requested and are medically
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`unnecessary.
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`37.
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`Further, the Medicare contractor concluded that the DME supplier had committed
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`fraud by providing orthotics devices under the guise of using “generic diagnoses” to provide
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`multiple orthotics to every beneficiary for areas of the body never treated by their physicians.
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`Suspension Will Force Plaintiff to Shut Down and File Bankruptcy
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`38.
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`Impact of the Medicare payment suspension threatens to force Plaintiff’s closure
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`and filing of bankruptcy.
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`39.
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`A prolonged and sustained suspension of all Medicare payments will eventually
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`result in the DME supplier’s loss of operating funds and its ability to continue business. The
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`process is prolonged by notices that are not followed by immediate action, such as the Medical
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`Review Records Request made on June 21, 2021.
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`CMS Abused its Discretion in Not Exercising Good Cause Exception to Suspension
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`40.
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`Had Defendant acted properly, it would not have imposed the suspension. CMS
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`may find good cause exists not to suspend a provider’s Medicare payments where it is
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`determined that beneficiary access to items or services would be so jeopardized by a payment
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`suspension as to cause a danger to life or health. 42 C.F.R. § 405.371(b)(1)(ii). It is a clear
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`abuse of discretion for CMS not to find that good cause exists here when the COVID-19
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`pandemic and the surge of confirmed coronavirus cases will soon overwhelm America’s
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`healthcare system, including DME suppliers. Not only will Plaintiff be forced to shut down, but
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`the government’s suspension action also places a greater burden on a healthcare community that
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`is already suffering due to COVID-19.
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`15
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`Case 4:21-cv-00665 Document 1 Filed 08/26/21 Page 16 of 28 PageID #: 16
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`COVID-19 Pandemic and National Emergency
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`
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`41.
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`On March 13, 2020, President Donald Trump declared a national emergency
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`because of the COVID-19 pandemic.8
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`42.
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`Governor Gregg Abbott also declared a state of disaster in Texas due to COVID on
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`March 13, 2020.9
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`43. When the national emergency was declared, the U.S. Government COVID-19
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`Response Plan was issued outlining the coordinated federal response activities for COVID-19.10
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`The Government's response plan makes two things clear: (1) the pandemic "will last 18 months
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`or longer" and (2) the COVID-19 outbreak will result in the implementation of drastic measures
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`to contain its spread throughout the nation. Therefore, society as a whole may soon be faced with
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`strict containment and social distancing measures for an extended amount of time.
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`
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`44.
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`Dr. Deborah Birx, White House Coronavirus Response Coordinator, has reported
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`that US deaths caused by COVID-19 may be catastrophic.11 She said that Dr. Anthony Fauci,
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`Director of the National Institute of Allergy and Infectious Diseases, has predicted U.S. deaths
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`could range from 1.6 to 2.2 million in a worst-case scenario and projects 100,000 to 200,000 in a
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`best-case scenario. With the surge of confirmed coronavirus cases, America’s hospitals are
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`being overwhelmed. And it is having a cascading effect on ancillary Medicare providers and
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`suppliers, including DME suppliers.
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`
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`45.
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`In addition, the U.S. Department of Health and Human Services Secretary Xavier
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`Becerra signed a renewal of determination that extended the current COVID-19 public health
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`8 The emergency has been extended multiple times since first announced.
`9 The state of disaster has also been extended.
`10 https://int.nvt.com/data/documenthelper/6819-covid-l 9-responseplan/d367f758bec47cad361
`f/optimized/full.pdf#page=l
`11 Interview with TODAY Show on Monday, March 30, 2020.
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`16
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`Case 4:21-cv-00665 Document 1 Filed 08/26/21 Page 17 of 28 PageID #: 17
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`emergency by 90 days, effective July 20, 2021.12 This extension was followed by several other
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`extensions and will likely not be the last. Therefore, it is foreseeable that supplies will only
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`continue to become more lim