Homecare Company Native Angels Sues HHS Over Medicare Recoupment

Natvie Angels Home Health Agency Inc. filed a complaint in a federal North Carolina court on Monday against the Department of Health and Human Services for alleged violations of the Medicare Modernization Act of 2003. 

Natvie Angels, a Medicare-certified home health agency, claims DHH violated its due process rights when it denied two of its Medicare claims without allowing a hearing. Under the MMA, Medicare providers have a right to contest payment denials through an appeals process within HHS, including judicial review by an Administrative Law Judge. However, because of increased auditing activity by HHS contractors, providers have experienced delays in the appeals process, according to the complaint. 

“Not only has the extraordinary delay stymied timely appeals, it also violates the statute, which requires the ALJ to hold a hearing within 90 days of an appeal being filed. Instead, providers such as Native Angels often wait up to 5 years to have their claims heard by an ALJ. In many instances, the ALJ will deny the provider a hearing based on a technicality or uphold the prior ruling without a hearing, which further deprives the provider of its due process rights,” the complaint states. 

At issue are two denied Medicare payments totalling $3,691.30. In both cases, HHS contractor AdvanceMed sent additional document requests to Native Angels. While Native Angels provided the documents to AdvancedMed immediately, AdvancedMed failed to send them to claims provider Palmetto GBA within a timely manner. When Palmetto denied the Medicare payments, Native Angels’ appeals requests were also denied because its medical records had been submitted late. Native Angels claims this is no fault of its own, but AdvancedMed’s.

Native Angels is seeking a hearing on the merits, damages and attorney’s fees. It is represented by Practus LLP.