Family Rehabilitation v. Becerra ( 2021 )

Case: 20-10271 Document: 00516078606 Page: 1 Date Filed: 11/02/2021
United States Court of Appeals
for the Fifth Circuit United States Court of Appeals
Fifth Circuit
FILED
November 2, 2021
No. 20-10271 Lyle W. Cayce
Clerk
Family Rehabilitation, Incorporated, doing business as
Family Care Texas, doing business as Angels Care Home
Health,
Plaintiff—Appellee,
versus
Xavier Becerra, Secretary, U.S. Department of Health
and Human Services; Seema Verma, Acting
Administrator for the Centers for Medicare and
Medicaid Services,
Defendants—Appellants.
Appeal from the United States District Court
for the Northern District of Texas
USDC No. 3:17-CV-454
Before Stewart, Ho, and Engelhardt, Circuit Judges.
Per Curiam:
Under the Medicare program, the Department of Health and Human
Services (“HHS”) can recoup overpayments made to a health care provider.
42 U.S.C. § 1395ddd. A provider can challenge an HHS overpayment
determination by pursuing four steps of administrative review, followed by
review in federal district court. 42 U.S.C. § 1395ff. The first two steps, 42
Case: 20-10271 Document: 00516078606 Page: 2 Date Filed: 11/02/2021
No. 20-10271
U.S.C. § 1395ff(a)–(c), and the fourth step, 42 C.F.R. § 405.1100 (2017),
involve paper hearings, while the third step can include an in-person hearing
with the opportunity to have oral testimony and cross-examination, 42
C.F.R.§ 405.1036(c)–(d). The Medicare statute allows HHS to recoup
overpayments after the second step of review, and a provider who is
successful at a later stage of review can seek repayment at that time. 42
C.F.R. § 405.379(d)(4)–(5).
Family Rehabilitation (“Family Rehab”) is currently facing an
impending recoupment after two steps of administrative review. Due to
significant delays in third step review, Family Rehab brought a procedural
due process claim, arguing that it is entitled to third step review before
recoupment, because in-person cross-examination and testimony are critical
to the resolution of its claim.
The district court granted summary judgment in favor of Family
Rehab, and entered a permanent injunction barring HHS from recouping the
disputed funds until the completion of third step review.
In reaching this decision, the district court did not have the benefit of
this court’s decision in Sahara Health Care Inc. v. Azar, 975 F.3d 523 (5th Cir.
2020), in which we rejected a similar due process claim under nearly identical
facts. Id. at 525. We accordingly reverse.
We apply de novo review to a grant of summary judgment, using the
same standards as the district court. See, e.g., Petro Harvester Operating Co.
v. Keith, 954 F.3d 686, 691 (5th Cir. 2020). We review permanent injunctions
for abuse of discretion, but any issue of law underlying that decision is
reviewed de novo. See, e.g., BNSF Ry. Co. v. Int’l Ass’n of Sheet Metal, Air,
Rail & Transp. Workers – Transp. Div., 973 F.3d 326, 333–34 (5th Cir. 2020).
In Sahara, this court found it dispositive that the healthcare provider
could not explain why “steps one and two, standing alone, fail to satisfy the
2
Case: 20-10271 Document: 00516078606 Page: 3 Date Filed: 11/02/2021
No. 20-10271
constitutional requirement.” 975 F.3d at 531. The benefit of an in-person
hearing during the third step of review is to allow the decisionmaker to make
credibility determinations through the consideration of testimony and cross
examination. But the provider in Sahara conceded that a third step “hearing
[would] not develop the factual record.” Id. The provider there could “not
explain how the possibility of cross-examination at the hearing would benefit
it.” Id.
So too here. Family Rehab’s claims all involve documentation issues
that do not require cross-examination and credibility determinations.
During oral argument, counsel for Family Rehab claimed that third
step review is required because HHS is contesting the medical judgments of
the doctors. But counsel’s claim is flatly contradicted by the record. Each
contested overpayment claim in this case involves documentation issues—
such as the failure to certify patients as “homebound,” the lack of
descriptions of clinical findings, the lack of Start of Care Certifications, and
the lack of contemporaneous signatures—not objections to the substantive
medical judgments of doctors. Accordingly, Family Rehab’s claims could
have been resolved in the first two steps of administrative review by
producing the relevant documents. Third step review “does not allow a
provider to supplement the record” beyond the submission of oral testimony
and the making of credibility determinations—neither of which are necessary
to resolve documentation issues. Id. at 532.
As in Sahara, Family Rehab “has already received two meaningful
opportunities to be heard.” Id. at 530. If Family Rehab wishes, it can escalate
the review process to the fourth step or to a federal district court, instead of
waiting for third step review. Id. at 531–33.
We reverse.
3