United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANTS' MOTION FOR
RECONSIDERATION (Doc. # 32) and GRANTING DEFENDANTS'
MOTION TO DISMISS (Doc. #20)
Victoria A. Roberts United States District Judge
matter is before the Court on Defendants' Motion for
Reconsideration. The Court finds there was a palpable defect
by which it and the parties were misled in issuing its first
Order. By addressing it, a different outcome is warranted.
Loc. Civ. R. 701(h)(3). Accordingly, the Court GRANTS
Defendant's Motion for Reconsideration and GRANTS
Defendants' Motion to Dismiss. This revised order
addresses the issues raised by both defense motions.
STATEMENT OF FACTS
Vision Home Health Care, Inc., and Saleem Shakoor, the owner
of New Vision (collectively, “New Vision”), filed
suit against National Government, Inc., TrustSolutions, LLC,
and Anthem, Inc. (collectively “Defendants”). New
Vision's Second Amended Complaint (“SAC”)
contains eight claims: Count I - writ of mandamus for
enforcement of the ALJ's September 4, 2013 decision
(Contractors Within Course and Scope); Count II - writ of
mandamus for enforcement of the ALJ's September 4, 2013
decision (Contractors Outside of Course and Scope and Failed
to Exercise Due Care); Count III - negligence; Count IV -
gross negligence; Count V - tortious interference with
business relationships and expectancies; Count VI - violation
of right to procedural due process; Count VII - declaratory
judgment; and, Count VIII - injunction.
are government contractors for the Medicare program
administered by the U.S. Department of Health and Human
Services (“HHS”). New Vision submits Medicare
claims to Defendants; they determine how much Medicare must
pay New Vision for home health care services.
2007, Defendants initiated an audit of New Vision's
Medicare claims for dates of service from May 8, 2003 through
October 3, 2006. Defendants paid these disputed claims, from
January 1, 2004 to December 10, 2006. Subsequently - through
an audit sample - Defendants concluded that it overpaid New
Vision $672, 493.57 for claims for dates of service May 8,
2003 through October 6, 2006. Defendants then used a
statistical extrapolation formula to calculate an estimated
total overpayment to New Vision of $4, 155, 239.00
(“Disputed Amount”) for that period.
Second Amended Complaint, New Vision says from October 2010
to the present, Defendants have not paid any claims New
Vision has submitted, and that Defendants have withheld
payments in order to recoup the Disputed Amount. (SAC ¶
42 and 43). However, in papers filed in connection with
Defendants' motions, New Vision says Defendants have
withheld payments since 2006 (Doc. # 36; Pg ID 1145). For
purposes of this Opinion, the Court will use the 2006 date.
2008, New Vision filed a claim through the Medicare Appeal
Process over the Disputed Amount for 2003-2006. The
Administrative Law Judge (“ALJ”) ruled in its
favor. Defendants appealed the decision through the Medicare
Appeals Council (“MAC”). The MAC remanded for a
new ALJ hearing. On June 7, 2012, the ALJ conducted a
hearing. New Vision presented arguments contesting the
validity of the methodology the Defendants used to determine
the estimated overpayment. It also presented reports from a
statistical expert who analyzed Defendants' data and
methodology. Defendants' evidence included medical
records and an analysis of each medical claim submitted by
New Vision between 2003 and 2006.
decision, the ALJ set forth the issue before him:
“whether New Vision received and retained the total
overpayment amount identified by [Defendants] …, and
if so, whether [New Vision] is liable for return of the
amount the [Defendants] calculated by extrapolation based
upon its findings from its medical reviews of the claims in a
statistical sample it had drawn.” [Doc. 18-1; Pg ID
451]. To resolve this issue, the ALJ went through each of the
228 claims at issue and listed the amount of overpayment
amount, if any, for that claim.
entered a decision on September 4, 2013 that was partially
favorable to New Vision; instead of being required to pay the
entire Disputed Amount, the ALJ concluded that New Vision was
overpaid only $35, 872.28; this is the amount New Vision had
to return to Defendants.
stated these conclusions of law:
1. Some of the claims New Vision submitted to Defendants met
the Medicare coverage criteria.
2. The reimbursements Defendants made for those claims to New
Visions were appropriate and did not constitute overpayments.
3. Other home care services New Vision provided did not meet
Medicare coverage criteria and/or condition for payment, and
New Vision was overpaid for those claims.
4. The statistical sampling and methodology Defendants used
to calculate the overpayment had numerous defects, which
diminished the reliability and probative value of the
5. Because the sample was not valid, the resulting amount of
the overpayment, calculated by extrapolation for the universe
of claims, was not valid.
6. The overpayment amount subject to recovery was limited to
the actual overpayment amounts based upon the ALJ's
dispositions after conducting individual reviews of the
medical records related to the episode claims in the sample
and the claim lines there.
[Doc. #18-1; Pg ID 739].
made no findings of fact or conclusions of law pertaining to
the amounts Defendant withheld after 2006. Nor were there
findings concerning the claims made by New Vision in Counts
decision ended with this order:
“The Medicare contractors are hereby DIRECTED to
process the claims and claim lines at issue in accordance
with this decision. Any amounts recouped or otherwise
recovered from the Provider based upon the invalid
overpayment demands herein shall be returned to the
[Doc. #18-1; Pg ID 740].
order required Defendants to return to New Vision any amounts
it had “recouped” from New Vision based on the
party appealed the ALJ's decision to the MAC.
the ALJ decision issued, Defendants sent New Vision a letter
demanding $41, 676.65. Defendants calculated that amount by
reducing the $35, 872.28 to $29, 989.11 (reflecting New
Vision earlier payments), and adding $11, 686.54 interest.
New Vision has not paid anything in response to
2006, New Vision says it has not received any reimbursements
for services from Defendants. New Vision claims Defendants
did not pay reimbursements on new claims New Vision
submitted, because Defendants were still attempting to
collect on the Disputed Amount, most of which the ALJ said
New Vision did not owe. New Vision relies on the ALJ's
language in his one paragraph ...