Update: Nichole Medical vs. TriCenturion

PHILADELPHIA - Dominic Rotella, the former HME provider who won an audit on appeal and who is now suing TriCenturion, the CMS contractor that conducted the audit, for $10 million in damages had his day in court April 20.

In the U.S. Court of Appeals for the Third District here, Rotella's attorney, David Hollar, argued that Nichole Medical Equipment & Supply was driven out of business by TriCenturion's “unlawful” audit and, therefore, deserves damages. When asked by one of the three judges to put a real value to those damages, Hollar replied:

“Whatever the value of the business is,” he said. “The limitation on damages would be the same as if arson happened and the building was burned down and destroyed.”

Rotella's lawsuit ended up in appeals court after the U.S. District Court, Eastern District of Pennsylvania, dismissed it. Rotella filed the lawsuit last year after fighting an audit and prevailing at the administrative law judge (ALJ) and Medicare Appeals Council levels.

TriCenturion's attorney, David Degnan, argued that Rotella has already received relief from the audit—both administratively and financially (he was returned about $100,000)—and that Medicare statute prevents the case from going any further.

“What Nichole Medical wants is more than what Congress determined in passing the statute, (which) was that the role of judicial review would be limited,” he said. “(That's) the balance that Congress struck, because it didn't want contractors doing this type of work to be burdened by lawsuits in district court. (Nichole Medical) wants something more.”

Rotella expects a decision from the three judges, which included retired U.S. Supreme Court Justice Sandra Day O'Connor, who was there by designation of Chief Judge Theodore McKee, by July.

“I really get the feeling that there are a lot of people in the industry who don't have a clue what's going on,” he said. “They're hitting their heads against the wall with competitive bidding, when CMS could come in the back door and put them out of business like this. Auditors shouldn't have immunity; they should be held responsible for their actions.”

To download an audio file of the hearing, go to http://www.ca3.uscourts.gov/oralargument/audio/11-2132NicholemedicalEuipment&supplyIncv.Tricenturion.wma

To read previous stories by HME News on Rotella, go to http://www.hmenews.com/article/provider-wants-auditor-pay and http://www.hmenews.com/blog/update-dominic-rotella-vs-tricenturion