v3.25.2
Commitments and Contingencies
3 Months Ended
Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies

Note 8 – Commitments and Contingencies

 

From time to time the Company may become subject to threatened and/or asserted claims arising in the ordinary course of our business. Other than the matter described below, management is not aware of any matters, either individually or in the aggregate, that are reasonably likely to have a material impact on the Company’s financial condition, results of operations or liquidity.

 

Third Party Audit

 

From time to time, in the ordinary course of business with respect to our discontinued operations, we are subject to audits under various governmental programs in which third party firms engaged by the Center for Medicare & Medicaid Services (“CMS”) conduct extensive reviews of claims data to identify potential improper payments. We cannot predict the ultimate outcome of any regulatory reviews or other governmental audits and investigations.

 

Progressive Health

 

In October 2021, the Company received notification from Covent Bridge Group (“Covent Bridge”), a CMS contractor, that they are recommending to CMS that the Company was overpaid and a request for payment was made in December 2021 in the amount of approximately $2.7 million.

 

The amount represents a statistical extrapolation of charges from a sample of claims for the periods July 2017 to November 2020 for Progressive Health & Rehabilitation, Ltd (“Progressive Health”). The Company entered into a management agreement with Progressive Health in April 2019.

 

The Company has initiated the appropriate appeals. The Company submitted a redetermination request in March 2022, which was denied. The Company submitted a reconsideration request February 2023. In July 2023, the Company received a reconsideration decision from the second appeal. The Qualified Independent Contractor provided a partially favorable decision that medical necessity supported a portion of the claims. The Company filed an appeal and a hearing with an Administrative Law Judge (ALJ) was conducted November 2023. The ALJ decision received on February 2024 did not address the Company’s appeal and the impact on the partially favorable decision from the Independent contractor and the potential impact on the extrapolated charges.

 

The Company filed an appeal to Medicare Appeals Council in April 2024 and the result was unfavorable. The Company pursued the next step of its appeal of the alleged overpayment by filing a lawsuit in federal court on May 14, 2025. The Company has reserved the request for payment amount of approximately $2.7 million.

 

Advantage Therapy

 

In May 2022 the Company received notifications from Covent Bridge, that they are recommending to CMS that the Company was overpaid and a request for payment was made in the amount of approximately $0.5 million.

 

The Company submitted a reconsideration request in May 2023. In August 2023 the Company received a reconsideration decision from the second appeal. The Qualified Independent Contractor provided a partially favorable decision supporting the appealed claims.

 

Subsequent to the findings of the second Appeal the Company filed an appeal and conducted a hearing with an Administrative Law Judge in February 2024. The Company awaits the response from the hearing.

 

IMAC St. Louis

 

In November 2024, the Company received notification from Covent Bridge, that it estimates the Company was overpaid CMS funds in the amount of approximately $1.1 million at a patient center in Missouri. The overpayment occurred between February 26, 2020 through January 2, 2024.