16 F.4th 1202
5th Cir.2021Background
- Family Rehabilitation, Inc. (doing business as Family Care Texas / Angels Care Home Health) faced Medicare overpayment recoupment after two steps of administrative review.
- Under the Medicare scheme, providers have a four-step administrative appeals process; the third step may include an in-person hearing with testimony and cross-examination.
- Family Rehab alleged due process violations from delays in obtaining a third-step in-person hearing and sought a permanent injunction preventing HHS from recouping disputed funds until completion of step three.
- The district court granted summary judgment for Family Rehab and enjoined recoupment pending step-three review.
- On appeal, the Fifth Circuit reversed, relying on Sahara Health Care v. Azar and holding that the contested claims were documentary in nature and thus steps one and two provided meaningful process; an in-person step-three hearing was not constitutionally required.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether due process requires a step-three in-person hearing before HHS may recoup after two-step review | Third-step in-person hearing with cross-examination is essential to resolve disputes | Documentation disputes can be resolved on the written record; in-person hearing not constitutionally necessary | No — not required where dispute is documentary; steps one and two suffice |
| Whether a permanent injunction barring recoupment pending step-three review was proper | Immediate recoupment would cause harm and due process requires hearing first | Provider already had two meaningful opportunities to be heard; remedies exist later | Injunction improper; district court erred in enjoining recoupment |
| Whether Sahara Health Care precedent controls | Family Rehab suggested factual differences justify a different result | Sahara is controlling; provider cannot explain why steps one and two are insufficient | Sahara controls; reversal required |
Key Cases Cited
- Sahara Health Care Inc. v. Azar, 975 F.3d 523 (5th Cir. 2020) (rejecting a similar procedural‑due‑process challenge where provider could not show steps one and two were constitutionally inadequate)
- Petro Harvester Operating Co. v. Keith, 954 F.3d 686 (5th Cir. 2020) (standard: de novo review of summary judgment)
- BNSF Ry. Co. v. Int’l Ass’n of Sheet Metal, Air, Rail & Transp. Workers – Transp. Div., 973 F.3d 326 (5th Cir. 2020) (standards for reviewing permanent injunctions)