Mobility provider takes CMS to court

Sunday, November 21, 2004

November 22, 2004

BALTIMORE - In an extremely rare legal move, a small power chair provider here has filed a suit in federal court seeking thousand’s of dollars that it claims CMS had no right to recoup following a post-payment audit.
MacKenzie Medical Supply filed its suit in federal district court in Baltimore Aug. 27. CMS has until Dec. 13 to answer the provider’s complaint. The company’s lawyers then expect it to take about a year to resolve the dispute in court.
“This company felt that it was treated unfairly in this process and wants to be vindicated,” said attorney Valerie Eastwood of Eastwood & Azia in Washington, D.C.
Disputes over Medicare audits seldom end up in federal court because the formal appeals process takes so long and is so expensive that the provider either goes broke or settles.
The MacKenzie case follows on the heals of a case involving Maximum Comfort. In that case, a California district court judge ruled that CMS could not request information beyond the CMN to document medical necessity. While district court rulings pertain only to the district where they occurred, they do provide guidance and help bolster the cases of providers in other parts of the country.
The 29 claims at issue in the MacKenzie case were originally paid by the Region C durable medical equipment regional carrier (DMERC).  Subsequent to approving these claims, the DMERC concluded that, despite the submission of a physician signed and completed CMN, these claims were no longer medically necessary. These 29 claims were extrapolated to a universe of claims covering an entire year, resulting in a $500,000 overpayment assessment. 
Throughout the appeals process, MacKenzie tried to pay the money back but eventually had to stop doing business. The company’s owner, Lynn Moura, has since gone into a new line of business.
“The government developed the certificate of medical necessity to establish medical need,” stated Valerie Eastwood, an attorney representing MacKenzie Medical.  “MacKenzie is standing up for what is right and should be properly reimbursed.”