holding that a live hearing was not required when provider sought a predeprivation ALJ hearing to present expert witnesses because the case did not turn on witness credibility
How later courts described this case
- holding that a live hearing was not required when provider sought a predeprivation ALJ hearing to present expert witnesses because the case did not turn on witness credibility
- reviewing a permanent injunction “for abuse of discretion[] and the legal issues underlying the grant of the injunction de novo”
Written by the judges who cited it.
The opinion
Case: 20-10443 Document: 00516124053 Page: 1 Date Filed: 12/09/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
December 9, 2021
No. 20-10443
Lyle W. Cayce
Clerk
Med-Cert Home Care, L.L.C.,
Plaintiff—Appellee,
versus
Xavier Becerra, Secretary, U.S. Department of Health
and Human Services; Seema Verma, Administrator for
Centers for Medicare and Medicaid,
Defendants—Appellants.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:18-CV-2372
Before Dennis, Elrod, and Duncan, Circuit Judges.
Jennifer Walker Elrod, Circuit Judge:
Med-Cert Home Care, L.L.C. sued the federal officials in charge of
administering the Medicare program for alleged violations of its procedural
due process rights. Med-Cert claimed that when the Department of Health
and Human Services (HHS) sought to recoup overpaid Medicare funds from
Med-Cert before its hearing with an administrative law judge, HHS violated
Med-Cert’s due process rights. The district court agreed and enjoined the
federal officials from recouping funds until after the hearing. While this case
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No. 20-10443
was on appeal, we issued Sahara Health Care Inc. v. Azar, 975 F.3d 523 (5th
Cir. 2020). There, we held that a similarly situated health-care provider was
not denied due process. Id. at 530–33. We have since applied Sahara to
reverse a district court’s permanent injunction like the one in this case.
Family Rehab., Inc. v. Becerra, 16 F.4th 1202 (5th Cir. 2021). Because Sahara
controls here, we REVERSE and REMAND for the district court to
consider Med-Cert’s alternative claims.
I.
The Medicare program allows HHS to recoup funds that it overpaid
to a health-care provider. 42 U.S.C. § 1395ddd(f). If the provider believes it
was not overpaid, it can challenge HHS’s determination through a four-step
administrative review process, followed by review in a federal court. Id.
§ 1395ff. Step one is a “redetermination” by an HHS contractor. Id.
§ 1395ff(a)(3); 42 C.F.R. § 405.948. Step two involves “reconsideration” by
a qualified independent contractor. 42 U.S.C. § 1395ff(b)–(c); 42 C.F.R.
§§ 405.902, 405.904(a)(2). These first two steps are the only time the
provider can submit paper evidence, absent “good cause.” 42 U.S.C.
§ 1395ff(b)(3); 42 C.F.R. §§ 405.946(a), 405.966(a)(2).
After steps one and two, the Medicare statute allows HHS to begin
recouping overpayments, and if the provider is ultimately successful in the
later steps, HHS must pay it back (with interest). 42 U.S.C.
§ 1395ddd(f)(2)(B). Step three is an ALJ hearing which can include an in-
person hearing and the chance to present oral testimony and cross-
examination. 42 C.F.R. § 405.1036(c)–(d). If the ALJ does not give a hearing
or issue a decision within ninety days of the timely request, the provider can
skip step three and go straight to step four: de novo review by the HHS
Appeals Board. 42 U.S.C. § 1395ff(d)(3)(A). And if the Appeals Board does
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No. 20-10443
not issue a decision within 180 days, the provider can seek judicial review in
federal court. Id. § 1395ff(d)(3)(B).
II.
In this case, the government determined that Med-Cert was overpaid
almost $1.8 million. Med-Cert began the four-step administrative process by
filing a Request for Redetermination. In support of that request, Med-Cert
filed nearly 13,000 pages of clinical documents and an expert opinion,
showing that Med-Cert was not overpaid for the services it provided. The
step-one “redetermination” came out the same way as the initial review.
Med-Cert then went to step two: “reconsideration” of the redetermination.
The reconsideration reaffirmed the redetermination that Med-Cert was
overpaid nearly $1.8 million. Med-Cert then appealed that decision and
requested an ALJ hearing, but in the meantime, HHS began recouping the
funds.
Because of administrative backlog at HHS, Med-Cert still has not
received an ALJ hearing. Rather than “escalate” to step four (review before
the Appeals Board), Med-Cert sued federal officials to prevent recoupment
while it waited for an ALJ determination. To Med-Cert, the ALJ hearing was
essential to afford it the due process it was entitled to. The district court
agreed, granting a preliminary injunction, then eventually granting summary
judgment to Med-Cert, permanently enjoining the federal officials from
recouping payments until after Med-Cert has received an ALJ hearing. The
federal officials timely appealed.
We review the grant of summary judgment de novo, the permanent
injunction for abuse of discretion, and the legal issues underlying the grant of
the injunction de novo. Family Rehab., 16 F.4th at 1204.
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No. 20-10443
III.
Med-Cert’s procedural due process claim is foreclosed by Sahara.
There, we explained that the provider’s inability to explain why “steps one
and two, standing alone, fail to satisfy the constitutional requirement” was
fatal. Sahara, 975 F.3d at 531. Though the step-three ALJ hearing gives
providers the chance to present live testimony and to cross-examine
witnesses, it does not (absent good cause) allow the provider to supplement
the evidence that it presented in steps one and two. Just like the provider in
Sahara, Med-Cert admits it “has no need to provide more evidence.” This
cuts against Med-Cert’s purported need for a live hearing because the
hearing will only rehash what has already been produced. See id. at 531–32.
Also in-line with the provider in Sahara, Med-Cert cannot “explain
how the possibility of cross-examination at the hearing would benefit it.” Id.
at 531. Cross-examination is most helpful when material facts are in dispute
and the case turns on the credibility or veracity of the government’s
witnesses. Id. That is not the case here. Med-Cert contends that “it could
present witnesses at the ALJ hearing that would clearly demonstrate the
gross inaccuracies on how the clinical files were ignored in the audits,” and
that a “live teleconference” “would ensure that [the] incorrect audit
contractor decisions would be addressed, discussed, and proven to be
inaccurate.” But nothing about that approach is unique to a live hearing. In
reality, Med-Cert merely wants someone else to review its case. But as we
said in Sahara, that is not enough to establish a right to such a hearing. Med-
Cert “has already received two meaningful opportunities to be heard,” id. at
530, and “it can escalate the review process to the fourth step or to a federal
district court” if it so chooses, Family Rehab., 16 F.4th at 1204.
Though Med-Cert claims that a live hearing would give the ALJ the
opportunity to “make critical credibility determinations,” it fails to explain
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No. 20-10443
how any witness’s credibility would make a difference in this case. Rather,
as in Family Rehabilitation, Med-Cert’s claims concern only “documentation
issues.” See id. (holding that a live hearing was not required where
overpayment claims “involve[d] documentation issues” and “not objections
to the substantive medical judgments of doctors”). Thus, Med-Cert’s
arguments, like those of the providers in Sahara and Family Rehabilitation,
are unavailing.
Med-Cert is correct to say that Sahara does not foreclose every due-
process claim challenging HHS’s recoupment of overpayments. Each case
comes down to its facts. For instance, the provider in Sahara did “not even
assert that it desire[d] to subpoena any witness.” 975 F.3d at 532. Med-Cert
says that it plans to provide expert testimony at its ALJ hearing. Even so, the
critical point is that the basis of HHS’s determination is a lack of supporting
documentation as required by law, not the doctors’ subjective medical
judgment on the necessity of services provided. Thus, there is no added
benefit of live testimony and cross-examination here, which leads us to the
same conclusion as in Sahara.
* * *
Because the district court did not resolve some of Med-Cert’s
alternative claims, we REVERSE the district court’s grant of summary
judgment and the permanent injunction and REMAND for consideration of
those claims by the district court in the first instance.
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