Agape Medical update: Arbitration, credit card reversals, and an investigation

RIVERSIDE, Calif. - Some HME providers who claim Agape Medical Management failed to submit their bids on time for Round 2 of competitive bidding have decided to duke it out with the company through arbitration.

Joseph Benincasa, an attorney with Kaplan, Kenegos & Kadin, which represents Agape Medical, told HME News that a handful of providers have decided to take advantage of an arbitration clause in their contracts with the company.

“We've turned over those claims to the insurance company,” he said. “They're handling everything.”

Arbitration is a legal technique to resolve disputes outside the courts.

Benincasa says if providers don't settle directly with the insurance company, their cases will go before an arbiter for mediation. If that doesn't work, there'll be a hearing to determine how much, if anything, Agape Medical owes these providers.

“We've suggested that the claims be handled collectively, which would probably benefit providers,” he said. “If you can deal with the insurance company as one mass, it could give you more strength.”

Another avenue of recourse taken by some providers who used credit cards to pay Agape Medical for their services: getting those charges reversed.

“We've heard from several providers who did that and it worked,” said Michael Hamilton, executive director of the Alabama Durable Medical Equipment Association.

Additionally, complaints to state attorneys general have resulted in at least one investigation in California by the state's Department of Justice. Benincasa says the agency did not find fraud.

“There were questions whether this was some scheme, whether they were taking money and not doing anything, or whether they were conducting a legit business,” he said. “They did not find anything and the case is closed.”

Of course, none of these avenues of recourse will change the fact that some providers have been shut out of competitive bidding. The only way to change that: Get CMS to re-open the bid window. But the agency isn't budging.

“They don't care; they say it's our problem,” said Mike Kernes, general manager at Reliable Medical. “Getting the market-pricing program passed may be our only saving grace.”

Meanwhile, Agape Medical continues to operate. When HME News contacted the office in late June and asked for CEO Cheryl Ward, we were told she wasn't in but that she would be in later in the morning. We left a message, but she did not return our call.

“I can't speak to how the bad publicity has impacted their new business but, yes, the clients who have worked with them in the past and who are happy with the results they got are still using them,” Benincasa said.