On August 3, 2018, the U.S. District Court for the Western District of Texas denied a challenge by Superior Home Health Services (Superior Home Health) to a Medicare contractor’s use of extrapolation to determine that the provider had been overpaid by $2.9 million.

In 2010, Medicare contractor Health Integrity conducted an audit of Superior Home Health. Health Integrity reviewed a 49-claim sample of home health claims between June 2007 and April 2009, and determined that 26 claims were ineligible for coverage, resulting in an overpayment of approximately $70,000. Health Integrity then extrapolated the results of its sample review to the universe of claims and alleged an overpayment of approximately $2.9 million.

Superior Home Health contested the extrapolated overpayment through the traditional Medicare appeals process and ultimately appealed to the District Court. Among other issues, Superior Home Health contested Health Integrity’s ability to use extrapolation, as well as the specific sampling and extrapolation methodology pursued by Health Integrity in its review.

In the August 3 ruling, the court denied Superior Home Health’s Motion for Summary Judgment, and granted the Defendant’s Cross Motion for Summary Judgment. Ultimately, the court declined to find any errors in the review methodology employed by Health Integrity, and upheld the use of extrapolation.

The case is Superior Home Health Servs., LLC v. Azar, 2018 BL 277542, W.D. Tex., No. 15-cv-636. The court’s opinion is available here.