Texas Home Health Companies Sue Government Over Medicare Privileges

Claiming wrongful termination of their Medicare billing privileges, two Texas-based home health agencies filed a class action lawsuit against a Medicare contractor and the Department of Health and Human Services (HHS). 

Houston home health agencies Oakwest Healthcare Services Inc. and CJN Home Health Services Inc. claim that Medicare administrative contractor Palmetta GBA LLC and HHS wrongfully terminated their Medicare billing privileges over certain compliance issues, without giving them the opportunity to take corrective action, according to the suit filed against Palmetta and HHS Secretary Kathleen Sebelius.

A review of the providers’ Medicare compliance by Palmetta found that the agencies allegedly violated Medicare laws for submitting claims for home health services without physician order when they submitted claims.


Palmetta based this allegation on a physician’s statement that while she has referred over 100 Medicare beneficiaries to the companies over the past four years, the notice letters did not specify the names of any particular beneficiary, nor were the companies given a copy of her attesting statements. 

Since Palmetta and the physician refused to identify the specific beneficiaries at issue, Oakwest and CJN argued it was difficult to implement corrective measures. 

“Consequently, Plaintiffs could neither prepare a corrective action plan, because they could not determine a ‘deficient compliance requirement’ without knowing the identity of the beneficiaries,” wrote the filing. “Likewise, it was not possible for Plaintiffs to establish a defense and pursue administrative appeals for the same reason.”


Oakwest and CJN are represented by Mark Stephen Kennedy of Kennedy Attorneys and Counselors at Law. 

Written by Jason Oliva

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