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Community Place v. Mid South Rehab Services, Inc.

United States District Court, S.D. Mississippi, Northern Division

February 19, 2014

COMMUNITY PLACE, PLAINTIFF
v.
MID SOUTH REHAB SERVICES, INC., DEFENDANT

For Community Place, Inc., Plaintiff: Neville H. Boschert, LEAD ATTORNEY, JONES WALKER WAECHTER POITEVENT CARRERE & DENEGRE-Jackson, Jackson, MS; Andrew S. Harris, JONES WALKER, LLP - Jackson, Jackson, MS; Gene A. Wilkinson, STENNETT, WILKINSON & PEDEN, Jackson, MS.

For Mid South Rehab Services, Inc., Defendant, Counter Claimant: Allison C. Simpson, Thomas L. Kirkland, Jr., LEAD ATTORNEYS, COPELAND, COOK, TAYLOR & BUSH, Ridgeland, MS.

For Community Place, Inc., Counter Defendant: Neville H. Boschert, LEAD ATTORNEY, JONES WALKER WAECHTER POITEVENT CARRERE & DENEGRE-Jackson, Jackson, MS; Gene A. Wilkinson, STENNETT, WILKINSON & PEDEN, Jackson, MS.

Page 688

OPINION AND ORDER

William H. Barbour, Jr., UNITED STATES DISTRICT JUDGE.

This cause is before the Court on the Motion of Plaintiff to Remand. Having considered the pleadings as well as supporting and opposing authorities, the Court finds the Motion is well taken and should be granted.

I. Factual Background and Procedural History

Plaintiff, Community Place, is a non-profit corporation that operates as a skilled nursing home in Jackson, Mississippi. In 2003, Community Place entered a contract with Mid South Rehab Services, Inc. (" Mid South" ), by which the latter agreed to provide speech and language pathology, and occupational and physical therapy services to clients of Community Place. Under the terms of the contract, Mid South was required to perform therapy services " in accordance with all applicable requirements of Federal, State or local laws, rules and/or regulations and third party reimbursement sources." Compl. at ¶ 11. Further, Mid South was required to provide adequate and timely written documentation that complied with " accepted professional standards" . Id. Mid South also agreed to provide, inter alia, a clinical director and all necessary staff for the facility, and treatment plans and continuing assessments for clients at Community Place. Id. at ¶ 12. Finally, with respect to the disallowance of Medicare payments for services provide by Mid South, the contract provided that Mid South was " responsible

Page 689

for contesting the denial letters" and, if " unsuccessful in satisfying the denials, would reimburse Community Place for any payments made for all denials of therapy services except those delineated as Community Place's responsibility." Id. at ¶ 14 (alterations in original).

In 2010, AdvanceMed Corporation (" AdvanceMed" ), which is identified as the Zone Program Integrity Contractor for Medicare Part A services in Mississippi, appeared unannounced at Community Place for the purpose of conducting interviews and reviewing patient files. Id. at ¶ 18. In April of 2011, AdvanceMed notified Community Place that its Medicare payments were being suspended based on " credible allegations of fraud." Id. at ¶ 19. The allegations of fraud were based, in part, on chart reviews done by AdvanceMed that indicated that some patients should not have been considered eligible for extended therapy services because they lacked rehabilitation potential or were not able to actively participate in therapy because of mental and/or physical deficiencies. Id. at ¶ 19.

During the course of the investigation, Community Place allegedly learned that Mid South maintained " soft files" or working files in its offices that were not part of a patient's chart. Community Place contends the maintaining of " soft files" is not standard practice in the health care industry, and led to " significant confusion" by the parties as well as AdvanceMed. Id. at ¶ 22. After AdvanceMed suspended Medicare payments, Mid South allegedly removed multiple files from Community Place, and has refused to either return or make those files available for review. Id. at ¶ 23. Additionally, during the course of the investigation, Community Place learned that Mid South had terminated, and sought the license revocation of, several therapists and a supervisor because of improper documentation, namely that they had documented therapy services that had not been performed. Id. at ¶ ¶ 24, 25.

Mid South continued to provide therapy services at Community Place, and Community Place continued to pay Mid South for those services even though Medicare payments had been suspended. Id. at ¶ 26. In February of 2012, Community Place advised Mid South that it would cease paying for therapy services pending a determination as to whether Medicare would pay for those services. Id. at ¶ 27. When Community Place rejected the demand made by Mid South for continued payments, Mid South purportedly terminated the contract. Id. According to Community Place, it has paid Mid South over $3,000,000 for services under the contract. Id.

In April of 2012, Community Place was notified that the suspension of Medicare payments was being rescinded. At that time, AdvanceMed also released the findings of its investigation, which included its review of the therapy services provided by Mid South. The findings allegedly included that (1) Mid South provided more therapy services than ordered, (2) available documentation did not support the level of therapy that was billed, and (3) therapy had been provided to patients who were not appropriate for skilled therapy care. Id. at ΒΆ 28. The ...


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