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When a small-practice physician in southern Florida had $170,000 in claims suspended based on allegations of services not provided, duplicate services, and altering records, Gabe Imperato and his colleagues at the law firm Broad & Cassel in Fort Lauderdale, FL, uncovered a novel defense.
Imperato, who specializes in this area, says that most challenges to suspension actions in federal court are thrown out. Because the dermatologist had a successful practice that derived roughly half his revenue from private-pay sources, the physician opted to challenge the suspension in part to avoid having the administrative action turn into a criminal or civil fraud action down the road.
In preparing the complaint, Imperato and his associates decided to challenge the suspension on a basis unrelated to any particular facts of the case. The theory of the case attorneys identified was that authority for the promulgation of suspension regulations (42.usc.13915y(d)), became effective in October 1972 and was repealed in 1987 with no statute ever enacted to replace it. The provision that replaced the existing statute addresses exclusion but not suspension, Imperato says.
"The theory was that there was no underlying authority for these suspension regulations; therefore, they should be stricken," he says. The physician filed a complaint, which was followed by the Secretary’s "garden variety" motion to dismiss, Imperato reports. The Broad & Cassel attorneys then filed for injunctive relief, using memoranda that laid out their case. A week later, the Secretary returned the $170,000 and lifted the suspension.
"Either they did not want to risk challenge to their authority to even promulgate those regulations in a courtroom where it could become a matter of precedent and could be used nationwide, or they looked into the case and found that there was no reliable evidence of fraud or misrepresentation," says Imperato."
That particular legal circumstance still exists, he says. "We are constantly vigilant for the opportunity to roll out that argument in other cases," he says. "I don’t know what the future holds."