On August 28, 2017, the United States District Court for the Eastern District of Michigan held that a provider must fully exhaust administrative remedies before it can seek a remedy in Federal court against a Medicare contractor that withheld reimbursement owed to the provider. In New Vision Home Health Care, Inc. v. Anthem, Inc. , et al. , New Vision Home Health Care, Inc. (New Vision) filed suit against the Medicare government contractors to whom New Vision submits Medicare claims for reimbursement (Defendants).

In 2007, Defendants initiated an audit of New Vision’s Medicare claims for dates of service 2003-2006 and concluded that the government overpaid New Vision for those claims. Defendants then used statistical extrapolation to calculate an estimated total overpayment of more than $4.1 million (Disputed Amount) for that period. New Vision alleges that Defendants have withheld payments since 2006 in order to recoup the Disputed Amount. In 2008, New Vision filed a claim through the Medicare Appeals Process over the Disputed Amount, and the Administrative Law Judge (ALJ) ruled in its favor.  Defendants then appealed the decision through the Medicare Appeals Council, which remanded for a new ALJ hearing. Noting defects with Defendants’ extrapolation methods, the ALJ ultimately held in 2013 that New Vision owed only $35,872 in overpayments.

In the Federal lawsuit, New Vision sought, among other things, a writ of mandamus to enforce the ALJ’s 2013 decision. The court, however, held that New Vision could not seek a writ of mandamus because it failed to exhaust administrative remedies on the specific allegations that the amounts Defendants withheld beginning in 2006 were related to 2003-2006 claims and were intended to collect on the Disputed Amount. The court stated, “[t]here were no findings of fact or conclusions of law that pertain to the funds Defendants withheld from New Vision beginning in 2006, nor was there a finding that Defendants withheld funds beginning in 2006 to continue to collect on the Disputed Amount. Furthermore, the ALJ made no finding that Defendants had to pay New Vision a specific amount (or a finding that there was any amount). ”  The court concluded that it lacked subject matter jurisdiction over New Vision’s claims.

The decision, New Vision Home Health Care, Inc. v. Anthem, Inc. , et al. , No. 16-cv-13173 (E.D. Mich. Aug. 28, 2017), is available here.