# Price

> District Court, W.D. Louisiana · September 2, 2026

URL: https://www.frixlaw.com/law-library/cases/11433875

## Case

- **Full name:** D & G Holdings, LLC v. Robert F. Kennedy, Jr.
- **Court:** District Court, W.D. Louisiana
- **Decided:** September 2, 2026
- **Opinion:** 100trialcourt
- **Cited by:** 0 later opinions in the Frix Law Library

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## Opinion text

UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
SHREVEPORT DIVISION

D & G HOLDINGS, LLC CASE NO. 17-cv-1045

-VS- JUDGE DRELL
ROBERT F. KENNEDY, JR. MAGISTRATE JUDGE HORNSBY

RULING
Before the court are D&G Holdings, LLC’s (D&G) motion for partial summary judgment
(Doc. 146) and the Secretary of the U.S. Department of Health and Human Services Robert F.
Kennedy Jr.’s (“the Secretary”) motion for summary judgment (Doc. 150). In the motion for
partial summary judgment, D&G Holdings contends it is owed interest on a reimbursement
provided by the Secretary for improperly recouped payments. The Secretary seeks dismissal of
this case arguing interest is not owed and all reimbursements owed to D&G have been paid.
For the following reasons, both motions are DENIED.
I, Background
From 1986 until April 2016, D&G was an independent medical laboratory in Pleasant Hill,
Louisiana that provided lab service to residential home-bound, nursing home, and hospice patients.
On October 19, 2011, October 29, 2011, and May 13, 2013, AdvanceMed, a Medicare Zone
Program Integrity Contractor, requested documentation from D&G for the purpose of conducting
a post-payment review of claims. In a letter dated December 19, 2014, AdvanceMed concluded
that D&G did not properly prorate mileage billed to Medicare, and based on a post-payment review
of 99 claims and a statistical analysis and extrapolation of those 99 claims, D&G received an
overpayment of $8,329,967.03.

On December 31, 2014, Novitas, the Medicare Administrative Contractor for Louisiana,
issued a demand letter to D&G ordering that it refund $8,329,967.03 to the Secretary, Recoupment
efforts were initiated in January 2014.
On January 28, 205, D&G submitted a request for redetermination to Novitas arguing the
extrapolation was fraught with errors and did not comply with the minimum requirements
established by the Centers for Medicare and Medicaid Services in the Medicare Program Integrity
Manual. On March 27, 2015, Novitas issued a letter directing that the alleged overpayment amount
be recalculated, and on April 22, 2015, Novitas advised that the overpayment actually totaled
$8,284,323.81, but interest was also owed in the amount of $222,641.21. On July 9, 2014, Novitas
resumed recoupment efforts.
On July 20, 2025, D&G initiated the next step in the appeals process and filed a request for
reconsideration with the Qualified Independent Contractor, C2C Solutions, Inc. Novitas was
notified of the filing, and continued to recoup the alleged overpayments. By mid-July, it had
recouped a total of $111,520.98.
On September 18, 2015, C2C Solutions, Inc. issued a letter to D&G advising D&G “should
receive a revised Medicare Summary Notice of Remittance Advice from Novitas Solutions, Inc.
within 60 days of this letter.”
On October 14, 2015, D&G took yet another step in the appeals process and requested
review by an Administrative Law Judge (“ALJ”). On October 20, 2015, D&G notified Novitas of
the same and requested it stay further recoupment efforts. Thereafter, D&G received a letter from
Novitas dated October 19, 2015 advising that Novitas recalculated the overpayment and
determined the new principal amount was $8,344,116.78, plus $677,923,59 in interest. Novitas
demanded D&G submit payment in the amount of $9,012,040.37 by November 4, 2015.

On March 4, 2016, the Secretary revoked D&G’s billing privileges. The revocation was
based on a finding that D&G submitted Medicare claims for beneficiaries subsequent to the
beneficiaries’ dates of death. D&G did not receive another Medicare payment and ceased doing
business in April 2016.
On May 10, 2016, the Office of Medicare Hearings and Appeals granted D&G’s request
for escalation of it appeal to the Medicare Appeals Council, and on November 14, 2016, the
Medicare Appeals Council ordered the matter remanded to the ALJ “for a timely hearing with
specific direction aimed at clarifying the existing substantive bases for the overpayment and related
issues.” A timely hearing was not conducted by the ALJ, so D&G again appealed to the Medicare
Appeals Council, and it issued a final decision on July 13, 2017 reversing C2C Solution, Inc’s
reconsideration noting the underlying bases for the overpayment were not sufficiently supported
by record evidence.
On August 17, 2017, the Secretary remitted a payment in the amount of $1,828,133.78 to
D&G. The parties now dispute whether this payment constitutes full and final payment and
whether interest is owed this payment and any future payments that might be due.
Il. Summary Judgment Standard
A court “shall grant summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R.
Civ. P. 56(a). A dispute of material fact is genuine if evidence is such that a reasonable jury could
return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248
(1986). We consider “all evidence in the light most favorable to the party resisting the motion.”
Seacor Holdings, Inc, v. Commonwealth Ins, Co., 635 F.3d 680 (5th Cir. 2011) (internal citations
omitted), It is important to note that the standard for summary judgment is twofold: (1) there is no

genuine dispute as to any material fact, and (2) the movant is entitled to judgment as a matter of
law. Id.
The movant has the burden of pointing to evidence proving there is no genuine dispute as
to any material fact, or the absence of evidence supporting the nonmoving party’s case. Liberty
Lobby, 477 U.S. at 250. The burden shifts to the nonmoving party to come forward with evidence
which demonstrates the essential elements of his claim, Id. The nonmoving party must establish
the existence of a genuine dispute of material fact for trial by showing the evidence, when viewed
in the light most favorable to her, is sufficient to enable a reasonable jury to render a verdict in her
favor. Duffy v. Leading Edge Prods., Inc., 44 F.3d 308, 312 (Sth Cir, 1995) (citing Celotex Corp.
vy. Catrett, 477 U.S. 317, 321 (1986)). A party whose claims are challenged by a motion for
summary judgment may not rest on the allegations in the complaint and must articulate specific
factual allegations which meet his burden of proof. Id. “Conclusory allegations unsupported by
concrete and particular facts will not prevent an award of summary judgment.” Duffy, 44 F.2d at
312 (citing Liberty Lobby, 477 U.S. at 247),
When ruling on a motion for summary judgment, it is improper for a court to make a
credibility determination or weigh the evidence. Reeves v. Sanderson Plumbing Prods., Inc., 530
U.S. 133, 150 (2000). A court must also view the evidence in the light most favorable to the non-
movant and draw all reasonable inferences in that party’s favor. Clift v. Clift, 210 F.3d 268, 270
(Sth Cir. 2000). Under this standard, a genuine dispute of material fact exists when the evidence
would allow for a reasonable trier of fact to return a verdict for the nonmovant. Renfroe v. Parker,
974 F.3d 594, 599 (Sth Cir. 2020) (citing Austin v. Kroger Tex., L.P., 864 F.3d 326, 328 (Sth Cir.
2017)).

Unlike summary judgment, “{a] partial summary judgment order ... is not a final judgment
but is merely a pre-trial adjudication that certain issues are established for trial of the case.” Streber
v. Hunter, 221 F.3d 701, 737 (5" Cir. 2000). Partial summary judgment, like its more fulsome
counterpart, summary judgment, does serve “to root out, narrow, and focus the issues” argued at
trial. Calpetco 1981 v. Marshall Exp loration, 989 F.2d 1408, 1415 (5" Cir. 1993).
II. Analysis
A. The Secretary’s Motion for Summary Judgment
Although it is the latter filed motion, we first address the Secretary’s motion for summary
judgment in which he contends that not only have reimbursements been paid, but D&G was
overpaid by $107,523.66. The Secretary’s witness, Melissa Gusler, a Business Analyst in the Debt
Recovery Department at Novitas, issued an “Expert Lay Report” in which she opined that “D&G
has been properly reimbursed for the Medicare Appeals Council’s decision, they are not owed
interest, and the 1099s are properly reporting the gross payment [to the Internal Revenue Service],
Therefore, the Medicare prograin does not have any monies due and owing D&G Holdings, LLC.”
(Doc. 150-2).
In response, D&G argues that it was not paid the full amount of the money the defendants
recouped; it is owed interest pursuant to 42 U.S.C, § 1395ddd(f)(2)(B); and the defendants are
liable for damages related to tax overpayments made by D&G to the IRS because of inaccurate
1099s. In support, D&G provides an expert report prepared by R. Christoper Rosenthal,
CPA/ABV/CFF, ASA, AEP who reviewed and analyzed the parties’ financial data pertaining to
the recoupment and repayment. Rosenthal opined that: “Totaling recoupment, interest accrued on
amounts owed to D&G, the offset of the overpayment and interest, and damages resulting from
the income tax overpayment results in total damages of $1,615,381.45.” (Doc, 146-4).

As there is a genuine dispute as to the amount of money owed to D&G, there is no basis
upon which to grant summary judgment.
B. D&G’s Motion for Partial Summary Judgment
In its motion for partial summary judgment, D&G claims that it is owed interest on the
money that the defendants reimbursed on August 17, 2017. The Secretary states that it has not
paid interest as it does not owe interest. D&G argues that by admitting it has not paid interest,
there is no issue of fact, and the only question before the court, whether interest is owed, is a legal
issue which this court can and should decide at this juncture.
The legal issue is whether a statute in the Medicare Integrity Program or a regulation in the
CFR controls this situation. D&G argues that 42 U.S.C. § 1395ddd controls, and the Secretary
argues that the provisions of Section 1395ddd are curtailed by 42 C.F.R. 405.378.
The Medicare Integrity Program provides for “the Secretary [to] promote the integrity of
the Medicare program by entering into contracts in accordance with this section with eligible
entities, or otherwise to carry out the activities described in subsection (b).” 42 U.S.C. §
1395ddd(a). Among the activities set forth in subsection (b) is the “[d]etermination[] as to whether
payment should not be, or should not have been, made under this subchapter by reason of section
1395y(b) of this title, and recovery of payments that should not have been made.” 42 U.S.C, §
1395ddd(b)(3).
Subsection (f) pertains to the recovery of overpayments by the Secretary. 42 U.S.C. §
1395ddd(H(2)(B) provides:
Insofar as the determination on such appeal is against the provider of services or
supplier, interest on the overpayment shall accrue on and after the date of the
original notice of overpayment. Insofar as such determination against the provider
of services or supplier is later reversed, the Secretary shall provide for repayment

of the amount recouped plus interest at the same rate as would apply under the
previous sentence for the period in which the amount was recouped.
Id. It is the latter part of the provision which is at issue here.
D&G contends that this provision clearly establishes that it is owed interest, but the
Secretary argues that whether interest is owed under Section 1395ddd(f)(2)(B) is determined by
the process set forth in 42 C.F.R. § 405.378: “Interest charges on overpayment and underpayments
to providers, suppliers, and other entities.” The Secretary specifically notes Section 405.378(),
entitled “Special rule for provider or supplier overpayments subject to 405.379” which provides:!
If an overpayment determination subject to the limitation on recoupment under §
405.379 is reversed in whole or part by an Administrative Law Judge (ALJ) or at
subsequent administrative or judicial levels of appeal and if funds have been
recouped and retained by the Medicare contractor, interest will be paid to the
provider or supplier as follows:
(1) The applicable rate of interest is that provided in paragraph (d) of this
section.
(2) The interest rate in effect on the date the ALJ, the Medicare Appeals,
Council, the Federal district court or subsequent appellate court issues a
decision reversing the overpayment determination in whole or in part is the
rate used to calculate the interest due the provider or supplier.
(3) Interest will be calculated as follows:
(i) Interest will be paid on the principal amount recouped only.
(ii) Interest will be calculated on simple rather than a compound basis.
(iii) Interest will be calculated in fill 30-day periods and will not be
payable on amounts recouped for any periods of less than 30 days
in which the Medicare contractor has possession of the funds.
(iv) calculating the period in which the amount was recouped, days in
which the ALJ’s adjudication period to conduct a hearing are tolled
under 42 C.F.R. 405.1014 shall not be counted
(v) In calculating the period in which the amount was recouped, days in
which the Medicare Appeals Council’s adjudication period to
conduct a review are tolled under 42 C.F.R. 405.1106 shall not be
counted.

1 42 CFR 405.379 provides that “This section implements section 1893(f)(2)(A) of the Act which limits recoupment
of Medicare overpayments if a provider of services or supplier seeks a reconsideration until a decision is rendered
by a Qualified Independent Contractor (QIC). This section also limits recoupment of Medicare overpayments when
a provider or supplier seeks a redetermination until a redetermination decision is rendered.” Recoupment efforts
were not limited during D&G’s appeal,

(4) If the decision by the ALJ, Medicare Appeals Council, Federal district court
or a subsequent Federal reviewing court, reverses the overpayment
determination, as modified by prior levels of administrative or judicial
review, in part, the Medicare contractor in effectuating the decision may
allocate recouped monies to that part of the overpayment determination
affirmed by the decision. Interest will be paid to the provider or supplier or
recouped amounts that remain after this allocation in accordance with this
paragraph (j) of this section.

The Secretary then points to 42 C.F.R.§ 405.378(g), “Rules applicable to partial payments”
which provides:
If an overpayment is repaid in installments or recouped by withholding from several
payments due the provider or supplier of services —
(1) Each payment or recoupment will be applied first to accrued interest and
then to the principal; and
(2) After each payment or recoupment, interest will accrue on the remaining
unpaid balance.
We agree that the plain reading of 42 U.S.C. § 1395ddd(f)(2)(B) calls for the
reimbursement of all money wrongly recouped by the Secretary whether it was applied to interest
or principal. This is often referred to as 935 interest.? We also agree the Secretary implemented
a tule which directs for the payment of interest only when the recouped payments were applied to
principal. However, what we don’t know is whether D&G’s payments were applied only to
interest payments. In fact, we don’t even know whether D&G owed any interest. D&G argues
(without citing authority) that interest was never due because a debt was never owed, and the
Secretary argues (without proof of the matter) that only interest was recouped.

* Section 405.378 only applies to 405.379 and it “implements [1395ddd] which limits recoupment of Medicare
overpayments if a provider of services or supplier seeks a reconsideration until a decision is rendered by a Qualified
Independent Contractor (QIC),”
} After Section 935 of the Medicare Modernization Act.

To confuse things further, there are rules within rules which the Secretary promulgated.
For example, a rule, found in the “Internet Only Manual,” states that 935 interest is only applicable
to involuntary recoupments. We don’t know whether the payinents made during the time period at
issue were considered voluntary or involuntary recoupments.
Without answers to these and other questions not articulated herein, we cannot say that
interest is owed to D&G. Accordingly, we deny the motion for partial summary judgment.
Il. Conclusion
IT IS HEREBY ORDERED that the motion for partial summary judgment (Doc. 146) is
DENIED. It is further
ORDERED that the motion for summary judgment (Doc, 150) is DENIED
THUS DONE AND SIGNED at Alexandria, Louisiana this LN day of August-2026.

DEE D. DRELL, SENIOR JUDGE~-—.
UNITED STATES DISTRICT COURT □

4 We do not know what the “Internet Only Manual” is or where to obtain a copy of it. Nor do we know how it
applies to this matter,

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/11433875. Public record. Not legal advice.