Alere Inc. (NYSE: ALR), a global leader in rapid diagnostic tests, today provided an update on the decision by the Centers for Medicare & Medicaid Services (CMS) to revoke Arriva Medical's Medicare billing privileges. Arriva is the largest Contract Supplier under the Medicare National Mail Order Competitive Bid Program for Diabetes Testing Supplies, having won contracts in every round of bidding and demonstrating its trusted supplier status to CMS. Arriva has filed an appeal with the Administrative Law Judge (ALJ) at CMS seeking to reinstate Arriva's billing status. Arriva expects the ALJ to hear the appeal within 30 days and issue a decision within three months. Arriva issued the following statement:
Additionally, Alere today announced that Arriva has filed a complaint, and related motions, in the U.S. District Court for the District of Columbia (the "Court") seeking: (i) to compel CMS to stay the process regarding the Competitive Bidding Contract termination while the ALJ appeal is ongoing; and (ii) to compel CMS to provisionally reinstate Arriva's billing number while Arriva pursues the ALJ appeal. Arriva expects a decision on its motions to enjoin on or about January 5, 2017.
As outlined in the complaint, Arriva alleges that the decision by CMS to bar Arriva from participating in Medicare is driven by a desire to reduce its longstanding backlog of administrative claim-reimbursement appeals. Arriva notes that the Court recently ordered CMS to clear that backlog by 2020, and, upon information and belief, CMS 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.
Additionally, on October 12, 2016, without any advance notice, Arriva received a letter from CMS informing it that, effective November 4, 2016, the agency was revoking Arriva's Medicare supplier billing number and barring it from re-enrolling in the Medicare program for a period of three years. Then, on November 2, 2016, without granting Arriva the opportunity to be heard, CMS upheld its initial decision based on a four-day, apparently mechanical review. CMS reached this conclusion in spite of evidence provided by Arriva demonstrating that any errors were primarily the result of Medicare system flaws.
Arriva is confident in the merits of this case because, among other things:
Alere has previously made public a fact sheet providing additional information regarding Arriva's relationship with CMS.