A Crack in the Armor: Fifth Circuit Court of Appeals Gives Green Light to Enjoining Medicare Recoupments Pending Provider’s Long-Delayed Administrative Appeal

In an important break with the majority of case precedents, the United States Court of Appeals for the Fifth Circuit, reversing the District Court below, held that a Medicare provider, facing a $7.6 million recoupment for alleged overpayments, can file suit in federal court and seek an injunction against ongoing recoupments, even though the provider had not yet fully exhausted its administrative remedies. Family Rehabilitation, Inc. v. Azar, U.S.C.A., 5th Cir. March 27, 2018. (“Family Rehab”). The “exhaustion of administrative remedies” requirement — that a person or entity aggrieved by a governmental action cannot file a lawsuit challenging the action before completing all avenues for appeal before the governmental agency — is a bedrock principle of administrative law and a formidable barrier to accessing the courts. Earlier this year, we posted an article about a federal district court’s decision in MedPro Health Providers, LLC…

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