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A1 Diabetes & Medical Supply v. Azar

United States Court of Appeals, Sixth Circuit

August 22, 2019

A1 Diabetes & Medical Supply, Plaintiff-Appellee,
v.
Alex M. Azar II, Secretary for the United States Department of Health and Human Services; Seema Verma, Administrator for the Centers for Medicare and Medicaid Services, Defendants-Appellants.

          Argued: August 8, 2019

          Appeal from the United States District Court for the Western District of Tennessee at Memphis. No. 2:18-cv-02612-John Thomas Fowlkes, Jr., District Judge.

         ARGUED:

          Joshua M. Salzman, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants.

          Jonathan E. Nelson, BASS, BERRY & SIMS PLC, Memphis, Tennessee, for Appellee.

         ON BRIEF:

          Joshua M. Salzman, Rachel F. Homer, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellants.

          Jonathan E. Nelson, John S. Golwen, BASS, BERRY & SIMS PLC, Memphis, Tennessee, Parker D. Eastin, NICHOLSON & EASTIN, LLP, Fort Lauderdale, Florida, for Appellee.

          Before: GILMAN, SUTTON, and WHITE, Circuit Judges.

          OPINION

          SUTTON, Circuit Judge.

         In 2017, A1 Diabetes & Medical Supply learned that government auditors thought that the company had overcharged a federal agency by several million dollars for services provided to Medicare beneficiaries. A1 challenged the auditors' decisions at two levels of the Medicare appeals process but changed the auditors' minds only in a few minor ways. The government tried to start collecting the money, as the regulatory regime allows. Fearing bankruptcy from the government's recoupment efforts, A1 sought and received a preliminary injunction from a federal district court, barring the government from recouping the money until A1 received a hearing before an administrative law judge.

         Even though A1 did not proceed to the third and fourth levels of the administrative appeal, the district court and we have jurisdiction over A1's constitutional claims. At the same time, the appellate briefs and oral argument have identified several factual and legal points on the merits that warrant clarification below. We therefore vacate the district court's order and remand the case for brief proceedings to address these questions.

         I.

         A federal health insurance program, Medicare makes sure that the elderly and disabled have access to medical care. The program depends on a lot of entities to make sure that beneficiaries get the help they need. One group of entities, medical services companies like A1, provide beneficiaries or their doctors ...


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