Prestige Home Health Care Sues Hhs For Millions In Damages

Prestige Home Health Care filed a lawsuit against the U.S. Department of Health and Human Services (HHS) on Jan. 9. The company claims that a flawed Medicare claim appeals process has caused it to suffer millions of dollars in damages.

Based in Chicago, Prestige Home Health Care serves 12 counties in Illinois. It offers home care, private-duty nursing, and occupational therapy services.

The lawsuit states that between 2015 and 2019, Prestige underwent a post-payment audit of 33 claims for services submitted to Medicare. Following the audit, AdvanceMed Corporation, the HHS contractor, alleged that 91% of the reviewed claims did not meet Medicare coverage criteria, resulting in an overpayment of more than $2.5 million.

Prestige challenged the alleged overpayment through the HHA’s administrative appeals process, which the company claims was subject to “delay, mismanagement and incompetence,” as stated in the complaint.

Providers who are unsatisfied with an adverse claim determination may contest it through a four-step administrative appeals process. The steps include redetermination, reconsideration, a hearing before an administrative law judge (ALJ), and a review by the Medicare Appeals Council.

In this case, the ALJ assigned to the appeal ruled against Prestige. Upon reviewing the decision, the company alleged that the ALJ had copied findings from a previous appeal decision.

“This is an egregious violation of applicable regulations that require ALJs to review cases de novo and make independent findings of fact and conclusions of law,” the lawsuit states.

Prestige subsequently appealed to the council, challenging the ALJ’s decision. After 90 days without a decision, the company invoked its right to bypass the council and escalate the case to federal court. Instead of honoring this request, the council remanded the case to the ALJ.

The ALJ addressed the issues outlined in the remand order without further proceedings and returned the case to the council. After an additional 90 days, Prestige sought to escalate its appeal to federal court again. Rather than approving this request within the five days required by agency regulations, the council took 11 months to confirm that the company was entitled to escalate the case, the complaint indicated.

Throughout this appeals process, interest accrued on the alleged overpayment at 10.625% annually.

Prestige is now seeking an order from the U.S. District Court for the Northern District of Illinois, declaring the agency’s final decision “unlawful, unsupported by substantial evidence, and arbitrary and capricious.” The company also requests an award of all damages, penalties, costs, and attorney’s fees to the maximum extent law allows.

“Generally speaking, it is rare to see an appeal carried through to the district court level,” Angelo Spinola, co-chair of the home health, home care, and hospice practice at Polsinelli told Home Health Care News. “There are five stages of appeal, and it is common for appeals to be filed for large overpayment determinations at least through the first few stages, particularly when there is solid evidence to show that the overpayment extrapolation is incorrect. These appeals often achieve reasonable success in terms of overpayment adjustments or, less commonly, reversals. However, once a provider reaches the less common fourth and fifth stages of appeal, the chances of reversal diminish.”

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