Haro v. Sebelius
| Decision Date | 09 May 2011 |
| Docket Number | No. CV 09–134 TUC DCB.,CV 09–134 TUC DCB. |
| Citation | 789 F.Supp.2d 1179 |
| Parties | Patricia HARO; John G. Balentine; Jack McNutt; and Troy Hall, as individuals and as representatives of a class of persons similarly situated, Plaintiffs,v.Kathleen SEBELIUS, Secretary of United States Department of Health and Human Services, Defendant. |
| Court | U.S. District Court — District of Arizona |
OPINION TEXT STARTS HERE
Gill Deford, Ctr. for Medicare Advocacy Inc., Willimantic, CT, Sally Hart, Tucson, AZ, for Plaintiffs.Adam David Kirschner, US Dept. of Justice, Washington, DC, for Defendant.
Putative class Plaintiffs, Medicare beneficiaries and an attorney representing beneficiaries, challenge the collection practices and procedures employed by Defendant's Center for Medicare & Medicare Services (CMS) program for reimbursement under Medicare as Secondary Payer (MSP) provisions.1 The questions before the Court are purely legal: 1) whether Defendant can require prepayment of a MSP reimbursement claim before the correct amount is administratively determined where the beneficiary either appeals or seeks a waiver of the MSP reimbursement claim, and 2) whether Defendant can hold plaintiffs-attorneys financially responsible for MSP reimbursement if they do not hold or immediately turn over to Medicare their clients' injury compensation awards. Both questions are answered as a matter of statutory construction. The Court does not reach Plaintiffs' due process arguments.
Plaintiffs seek a declaratory judgment that the Secretary's practices are not authorized by Congress, not a permissive interpretation of the statute, and violate the Due Process Clause of the United States Constitution. Plaintiffs seek declaratory judgment and an injunction preventing her from continuing to engage in the challenged practices. Plaintiffs seek class certification for the beneficiaries.
The Court finds the statutory scheme created by Congress for the MSP program precludes the Secretary's practices. The Court grants summary judgment for the Plaintiffs. The Court does not reach the Plaintiffs' due process arguments. The Court certifies the case as a class action for the beneficiaries.
On summary judgment, the moving party is entitled to judgment as a matter of law if the Court determines that in the record before it there exists “no genuine issue as to material fact.” Fed.R.Civ.P. 56(a). In determining whether to grant summary judgment, the Court views the facts and inferences from these facts in the light most favorable to the non-moving party. Matsushita Elec. Co. v. Zenith Radio Corp., 475 U.S. 574, 577, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).
The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment; the requirement is that there be no genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247–48, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A material fact is any factual dispute that might effect the outcome of the case under the governing substantive law. Id. at 248, 106 S.Ct. 2505. A factual dispute is genuine if the evidence is such that a reasonable jury could resolve the dispute in favor of the non-moving party. Id.
The moving party bears the initial burden of demonstrating the absence of a genuine issue of material fact, but is not required to support its motion with affidavits or other similar materials negating the opponent's claim. Celotex Corp. v. Catrett, 477 U.S. 317, 323–325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party is under no obligation to negate or disprove matters on which the non-moving party bears the burden of proof at trial. Id. at 325, 106 S.Ct. 2548. Rather, the moving party need only demonstrate that there is an absence of evidence to support the non-moving party's case. Id.
The burden then shifts to the non-moving party to “designate ‘specific facts showing that there is a genuine issue for trial.’ ” Id. at 324, 106 S.Ct. 2548 (quoting Fed.R.Civ.P. 56(e)). To carry this burden, the party opposing a motion for summary judgment cannot rest upon mere allegations or denials in the pleadings or papers. Anderson, 477 U.S. at 252, 106 S.Ct. 2505. The non-moving party must “do more than simply show that there is some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586, 106 S.Ct. 1348. “The mere existence of a scintilla of evidence ... will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party].” Anderson, 477 U.S. at 252, 106 S.Ct. 2505.
Motions for summary judgment are not a disfavored procedural shortcut, but rather are an integral part of the Federal Rules as a whole, which are designed “to secure just, speedy and inexpensive determination of every action.” Celotex, 477 U.S. at 327, 106 S.Ct. 2548. Accordingly, the rules governing motions for summary judgment should be enforced with regard not just for rights of the nonmovant, but also for the rights of the party contending that there exists no genuine issue of material fact. Id.
The Judge's role on a motion for summary judgment is not to determine the truth of the matter or to weigh the evidence, or determine credibility, but to determine whether there is a genuine issue for trial. Anderson, 477 U.S. at 252, 106 S.Ct. 2505. The inquiry mirrors the standard for a directed verdict: whether the evidence presented reveals a factual disagreement requiring submission to a jury or whether evidence is so one sided that one party must prevail as a matter of law.
The Medicare statutes provide for Medicare to be the secondary payer whenever there is other insurance that covers health care for Medicare beneficiaries, but requires Medicare to make a conditional payment for the care when a primary insurer does not pay promptly. 42 U.S.C. § 1395y(b)(2). Medicare's payment is conditioned on reimbursement before the expiration of 60 days after Medicare receives notice or other information that payment has been or should be made from another source, and the Secretary may charge interest until reimbursement is made. Id. She may waive (in whole or part) the reimbursement requirement, if she determines that waiver is in the best interests of the program. 42 U.S.C. § 1395y(b)(2)(B)(v).
The Medicare statute, 42 U.S.C. § 1395ff, also provides for administrative review and appeal rights to beneficiaries to resolve MSP claim disputes.
Plaintiffs challenge the Defendant's 60–day requirement for immediate payment, with interest otherwise accruing, for reimbursement claims when beneficiaries wish to appeal or request a waiver of the reimbursement amount and the use of scare tactics accompanying its pre-decisional reimbursement demands, such as: imposition of exorbitant interest on unpaid claims; threats of cessation of the beneficiary's Social Security or Railroad Retirement payments, and collection referrals to several federal law enforcement agencies.
The Defendant argues that her procedures fully comply with the terms of the statute and fully protect Plaintiffs' due process rights while ensuring the important public interest in the fiscal integrity of Medicare.
“[T]he nature of MSP monies reimbursable to Medicare, as opposed to non-MSP monies to which Medicare is not entitled, is not always discernible with pinpoint accuracy at the time a Medicare beneficiary becomes entitled to a settlement check ... which in whole or in part is meant to encompass medical expenses previously “conditionally” paid by Medicare.” Wall v. Leavitt, 2008 WL 4737164 *1 (E.D.Cal.2008). In Plaintiffs' cases, they were injured, received medical services, which were conditionally paid for by Medicare, subsequently received settlement proceeds from a primary payer, i.e., liability insurance company, were notified by Defendant, pursuant to a demand letter, of a reimbursement claim in a specified amount, which each respective plaintiff disputed. The demand letters informed the plaintiffs and plaintiffs-attorneys that the reimbursement claim must be paid within 60 days or interest of 11.375% would begin to accrue and collection actions could be initiated. (P's MSJ at 3–7; D's MSJ at 9–14) Plaintiffs' attorneys were given similar notice, but were additionally told that “Medicare's claim must be paid up front out of settlement proceeds before any distribution occurs.” (D's Memorandum in Support of Motion to Dismiss (doc. 16), Ex. 3: letter of 4/18/2007 to Van Osteen (attorney for Plaintiff Haro)), see also (P's MSJ at 7–8; D's MSJ at 14–16).
The Secretary submits she has revised the notice given beneficiaries. (D's MSJ, Ex. 31: Attachment E, Bates Stamp (BS) 302–306.) While she has changed the demand for immediate payment from “must pay” to “should pay” the revised notice continues in the same vein as the demand letters sent to the Plaintiffs in this case. First, it obfuscates the effect an appeal or waiver has on “what happens” if the beneficiary does not immediately repay Medicare, id. at BS 305, and fails to include language explaining that filing an appeal or waiver will suspend collection activities until agency review results in a final determination and then if the beneficiary “chose to retain the amount in dispute, the Secretary shall collect from the debtor the amount determined to be due, plus interest.” Infra p. 14 (quoting 45 C.F.R. § 30.18(h)(1)).
Additionally, the paragraph outlining the recovery measures the Secretary may take when a beneficiary does not “repay Medicare in full,” is confusing. It has been revised to include language that she will not refer recovery actions to the Department of Treasury for collection, pending administrative or judicial review, but suggests a beneficiary may be subject to other recovery measures and fails to address what happens upon a waiver request. (D's MSJ, Ex. 31: Attachment E at BS 305.)
The...
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