HHS hit with class-action complaint over suspended Medicare payments

A now-shuttered home health company based in Chicago has filed a proposed class-action lawsuit in federal court against HHS and AdvanceMed, a Medicare contractor.

AdvanceMed is one of several contractors hired by CMS to use data mining techniques to identify possible patterns of fraud in Medicare claims. In 2016, Simply Home Healthcare submitted patient charts to AdvanceMed for review. Roughly nine months later, AdvanceMed had the company's Medicare payments suspended, according to the complaint.

AdvanceMed said Simply Home Healthcare received overpayments from Medicare due to documentation errors and requested additional medical records and a rebuttal letter from the company, according to the complaint. After receiving the additional information, AdvanceMed allegedly told Simply the Medicare payment suspension would continue, and the reason for the suspension had changed from overpayment to fraud.

Simply Home Healthcare's Medicare suspension was lifted in September 2017. At that time, AdvanceMed allegedly told Simply it owed Medicare $5.4 million, which was calculated by applying the alleged medical record error rate against the company's previous four years of Medicare payments. The total amount due was reduced to $4.8 million through the appeals process.

The "millions of dollars in alleged debt" put Simply out of business in August 2018, according to the complaint.

Simply alleges AdvanceMed is "misapplying federal laws and regulations in a way that harms small healthcare providers for the sole purpose of inflating billable hours and winning additional contracts with the CMS."

Robert Kunio, the president of Simply, said in an April 10 press release that more than 100 other home health companies and hospices were put out of business by AdvanceMed's tactics.

More articles on legal and regulatory issues:

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UHS can't dodge claims it held patients illegally, investors say
Ex-physician assistant gets prison time for role in $1B healthcare fraud scheme

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