Home Health Company Sues HHS, Medicare Contractor Over Suspended Reimbursements

A Chicago-based home health provider is suing the U.S. Department of Health and Human Services (HHS), along with a contractor hired by the Centers for Medicare & Medicaid Services (CMS).

Simply Home Healthcare LLC claims the contractor, AdvanceMed, wrongly continued a suspension of Medicare payments following a rebuttal letter from the provider. Simply Home Healthcare LLC also claims the contractor computed past debt to Medicare based on a faulty documentation error rate it had calculated.

Before going out of business in 2018, Simply Home Healthcare LLC served about 150 patients daily in 10 counties in the Chicago area, plaintiff and former owner Robert Kunio told Home Health Care News in an email.


Meanwhile, AdvanceMed is one of five unified program integrity contractors (UPICs) nationwide hired by CMS to audit and investigate home health agencies for potential fraud.

According to a class-action complaint filed in the U.S. District Court for the Northern District of Illinois on April 5, AdvanceMed allegedly suspended Medicare reimbursements to Simply Home Healthcare LLC in 2017 because of overpayment-related issues. Later, the reason for the suspension was changed to fraud without proper support, the home health agency claims.

Months later, AdvanceMed lifted the suspension.


However, at that point, the complaint states AdvanceMed told Simply Home Healthcare LLC the agency owed $5.4 million to Medicare. Eventually, that amount was reduced to $4.8 million, according to the lawsuit.

This “alleged debt” put the company out of business, Simply Home Healthcare LLC claims.

In its complaint, Simply Home Healthcare LLC argues that AdvanceMed misapplied federal laws and regulations “for the sole purpose of inflating billable hours and winning additional contracts” in the process.

“In the war on Medicare fraud — which I support — there have been many victims of this collateral damage at the hands of these UPICs,” Kunio said. “These hard-working people who ran these honest agencies who should not have been put out of business need to be identified and compensated for the harm that was illegally caused to them by the UPICs.”

Neither HHS nor AdvanceMed responded to HHCN’s request for comment by the time of publication.

Earlier this year, Laura Long — the Medicare operations lead at AdvanceMed — told attendees at the 2019 Illinois HomeCare & Hospice Council (IHHC) leadership conference that agencies can file inaccurate claims unintentionally.

Additionally, she explained that UPICs like AdvanceMed can extrapolate their findings when appropriate.

“If we review 30 claims, and we find that 25 of those have been overpaid, then we can extrapolate those results across the entire universe, whatever that defined universe was,” Long said. “So maybe instead of having a $50,000 overpayment, you have a $2 million overpayment.”

Kunio told HHCN that he believes other home health and hospice agencies have experienced similar issues. If that turns out to be the case, AdvanceMed and its parent company could be held liable for more than $1 billion in direct and punitive damages, he maintains.

Simply Home Healthcare LLC is represented by Michael J. Raiz and Lesley R. Arca of Jurisprudence Health Law Group PC and George S. Bellas of Bellas & Wachowski.

HHCN had previously highlighted Simply Home Healthcare LLC in 2014 for a fall-prevention program the company had implemented.

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