A St. Louis pain physician is challenging Medicare in federal court, alleging that its use of a flawed statistical sampling process could lead to his financial ruin.
Dr. Gurpreet Padda and his practice, Interventional Center for Pain Management, sued newly appointed U.S. Department of Health and Human Services Secretary Xavier Becerra and Centers for Medicare and Medicaid Services Acting Administrator Liz Richter in the U.S. District Court for the Eastern District of Missouri on April 27.
“Although Medicare post-payment audits are quite common, Medicare’s post-payment audit of Dr. Padda suffered from numerous flaws, not the least of which was Medicare’s use of a flawed statistical sampling process that took an alleged overpayment of just over $14,000, and extrapolated it to over $5.5 million, a nearly 40,000% increase,” said Padda’s attorney Scott Grubman.
A backlog of claims pending before the Office of Medicare Hearings and Appeals is preventing Padda from a timely review of the $5.9 million charge he is being asked to pay, according to the lawsuit.
“Federal law permits healthcare providers to request a hearing before an independent administrative law judge, and requires Medicare to provide such a hearing within 90 days of such request,” Grubman told the St. Louis Record. “Unfortunately, Medicare has acknowledged that it is not in compliance with this express rule, and the current backlog for a provider like Dr. Padda to receive a hearing is anywhere between three to five years, and often times even longer.”
Padda is awaiting review by an administrative law judge, however, defendants have vowed to collect the nearly $6 million charge from Padda’s Medicare payments going forward as soon as possible, according to the lawsuit.
“Recoupment of $5,964,295 will cause irreparable harm in the form of financial ruin, forced termination of employees, and certain closure of Dr. Padda’s medical practice,” Grubman wrote in the lawsuit. “Dr. Padda will be unable to obtain meaningful relief at a post-recoupment hearing because, by that time, his practice will almost certainly be closed.”
In the lawsuit, Padda alleges violations of procedural due process, substantive due process, and preservation of the status of rights under the Administrative Procedure Act (APA).
“Medicare is clearly violating federal law by not providing such hearings within 90 days, they have no problem with engaging in the self-help remedy of recouping the alleged overpayment while the physician is stuck in the middle of a multi-year backlog,” Grubman said. “This is a clear violation of due process and, accordingly, Dr. Padda has been forced to seek injunctive relief in federal court.
Padda is seeking injunctive relief, a temporary restraining order and an order enjoining defendants from recouping the $5.9 million until the case is reviewed.
“Dr. Padda is entitled to prompt administrative and judicial review of the billing dispute,” Grubman said. “Even if Dr. Padda succeeds only in invalidating the purported statistical methodology used to extrapolate the overpayment (which contains a number of flaws), the demand would decrease from $5,964,295 to $14,418.93.”