Court Rejects End-Run of Medicare Appeals Rules

The Indiana Health Department sent a team to the Nightingale home health care and hospice group, in response to complaints.  When CMS received the team’s report, it notified Nightingale that its Medicare certification was being terminated.

Nightingale filed a federal lawsuit against the Secretary of Health & Human Services, the Indiana State Health Commissioner, and a raft of state employees, claiming violation of their Constitutional rights.  Nightingale sought to enjoin the Secretary from terminating its Medicare certification and from using the Indiana Health Department for surveys.  Nightingale also asked for orders enjoining the Department from conducting further surveys and requiring it to withdraw its report to CMS.

Why did Nightingale deserve all this relief?  Because, the plaintiffs alleged, surveyors “harassed, discriminated against, intimidated and retaliated against [the owner] on the basis of race, Plaintiffs’ exercise of First Amendment rights and personal dislike of [him] and/or his companies.”

The defendants moved to dismiss.  On April 5 the court court dismissed the case with prejudice, ruling that even if all the allegations are true (an assumption required in ruling on a motion to dismiss), the plaintiffs have no case.  Why?  Because state and federal law alike expressly require a provider to exhaust the administrative appeal process before going to court.  The plaintiffs must know that because they had already filed an administrative appeal, which is still pending.

The case is Home Health Providers v. Hemmelgarn, 2016 BL 107040 (S.D. Ind. 2017).

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