NEW YORK (360Dx) — Alere said yesterday that it has appealed a decision by the Centers for Medicare and Medicaid Services (CMS) to revoke the Medicare billing privileges of the diagnostic company's diabetes unit, Arriva Medical.
Alere filed its appeal with CMS' administrative law judge and filed a complaint in a US District Court seeking to have Arriva's billing privileges temporarily reinstated while the appeal is ongoing. The administrative law judge is expected to hear the appeal within 30 days and issue a decision within three months.
According to Alere, it received a letter from CMS in mid-October stating that Arriva's Medicare supplier billing number was being revoked effective Nov. 4 and that it would be barred from re-enrolling in the Medicare program for a period of three years because it had billed for items and services for deceased Medicare beneficiaries.
"CMS formed this opinion based on what appears to have been a mechanical review that identified 211 out of approximately 5.8 million claims over a five-year period that had been submitted for beneficiaries who were decreased on the date that their ordered diabetes testing supplies were shipped," Alere said in its legal complaint.
Alere added that it provided CMS with evidence that these errors were primarily the result of Medicare system flaws, but that the agency still denied a request for reconsideration without providing a pre-termination hearing. CMS also terminated Arriva's competitive bidding contract, citing its loss of billing rights.
Arriva has not been allowed to bill Medicare since November, Alere told the court.
Alere alleges in its suit that CMS' decision to block Arriva's participation in Medicare is actually "driven by a desire to reduce its longstanding backlog of administrative claim-reimbursement appeals." CMS was recently ordered to clear this backlog by 2020 and "perceives Arriva to be a contributor to that backlog because Arriva has been forced to appeal approximately 250,000 errantly denied claims over the past five years," Alere added in a statement.
Alere's row with CMS comes amid a legal battle with one-time suitor Abbott, which this month filed litigation seeking to force the termination of its proposed $5.8 billion acquisition of Alere.