Schwartz v. Medicare

• Decision Date: 30 July 1993
• Docket Number: Civ. A. No. 93-1868 (AJL).
• Citation: 832 F. Supp. 782
• Parties: Benjamin SCHWARTZ, Plaintiff, v. MEDICARE, Defendant.
• Court: U.S. District Court — District of New Jersey

832 F. Supp. 782

Benjamin SCHWARTZ, Plaintiff, v. MEDICARE, Defendant.

Civ. A. No. 93-1868 (AJL).

United States District Court, D. New Jersey.

July 30, 1993.

Benjamin Schwartz, pro se.

John C. Jeannopoulos, Asst. U.S. Atty., Newark, NJ, for defendant.

OPINION

LECHNER, District Judge.

Currently before the court is the motion of defendant Medicare ("Medicare") to dismiss the complaint (the "Complaint"), dated 31 March 1993,¹ for lack of subject matter jurisdiction pursuant to Fed.R.Civ.P. 12(b)(1).² For the reasons that follow, the motion to dismiss is granted.

Facts

A. The Medicare Program

Title 18 of the Social Security Act (the "SSA"), 42 U.S.C. §§ 1395 et seq., also known as the Medicare Act, establishes the program of Health Insurance for the Aged and Disabled, commonly known as Medicare. Neurological Assocs., 658 F.Supp. at 469. Beneficiaries of Medicare are individuals who have become eligible for Social Security insurance pursuant to Title 2 of the SSA. See 42 U.S.C. §§ 401-433. Medicare is administered by the Health Care Financing Administration (the "HCFA"), on behalf of the Secretary of the Department of Health and Human Services (the "HHS Secretary"), who is ultimately responsible for the administration of Medicare. Universal Health Servs. of McAllen, Inc. v. Sullivan, 770 F.Supp. 704, 707 (D.D.C.1991), aff'd, 978 F.2d 745 (D.C.Cir.1992); Neurological Assocs., 658 F.Supp. at 469; see also 42 U.S.C. § 1395kk(a).

Medicare, Part A ("Medicare A"), provides insurance for hospital, related post-hospital and home health services for eligible beneficiaries. See 42 U.S.C. §§ 1395c-1395f (describing Medicare A program); see also Bodimetric Health Servs., Inc. v. Aetna Life & Cas., 903 F.2d 480, 482 n. 2 (7th Cir.), cert. denied, 498 U.S. 1012, 111 S.Ct. 579, 112 L.Ed.2d 584 (1990); Medical Fund-Philadelphia Geriatric Ctr. v. Heckler, 804 F.2d 33, 35 (3d Cir.1986); Abbey v. Sullivan, 788 F.Supp. 165, 166 (S.D.N.Y.1992), aff'd, 978 F.2d 37 (2d Cir.1992). Medicare A benefits are paid to health care providers, usually a hospital, nursing home or home health agency, rather than to the Medicare beneficiaries themselves. 42 U.S.C. §§ 1395f; see also 42 U.S.C. § 1395x(u) (defining "provider of services").

Medicare, Part B ("Medicare B"), is a voluntary subscription program of supplemental medical insurance, covering eighty percent of charges for other medical services, including physician services, x-rays, laboratory tests and medical supplies. 42 U.S.C. §§ 1395j-1395l (describing Medicare B program); see also Bodimetric, 903 F.2d at 482; Medical Fund, 804 F.2d at 35; Abbey, 788 F.Supp. at 166; Neurological Assocs., 658 F.Supp. at 469. Medicare B benefits are generally paid directly to Medicare beneficiaries, although a beneficiary may assign the right to receive payment on a Medicare B claim to a health care provider or supplier of health care related services. 42 U.S.C. § 1395l; see also 42 C.F.R. § 405.802(c)-(e) (defining "assignor," "assignee" and "assignment"). In the latter case, the assignee submits the claim and receives payment. 42 U.S.C. § 1395l.

To facilitate the administration of Medicare, the SSA authorizes the HHS Secretary to contract with entities known as "Fiscal Intermediaries" or "Carriers," which are often private insurance companies. See 42 U.S.C. §§ 1395h, 1395kk(b); 42 C.F.R. §§ 421.100, 421.200; see also Neurological Assocs., 658 F.Supp. at 469; Fox, 656 F.Supp. at 1238. Fiscal Intermediaries process and review claims submitted by health care providers, beneficiaries or the assignees of beneficiaries to determine (1) whether the claims are for covered services and (2) what is the appropriate amount of the Medicare payment. See 42 C.F.R. §§ 421.100(a), 421.200(a); see also Westchester Mgmt. Corp. v. United States Dep't of Health & Human Servs., 948 F.2d 279, 280 n. 3 (6th Cir.1991), cert. denied, ___ U.S. ___, 112 S.Ct. 1936, 118 L.Ed.2d 543 (1992); Bodimetric, 903 F.2d at 482 n. 3; Medical Fund, 804 F.2d at 35; Abbey, 788 F.Supp. at 166.

A Medicare beneficiary who disputes either the amount of payment provided on a claim or the denial of payment is entitled to various stages of administrative review of the adverse determination. 42 U.S.C. § 1395ff(b) (incorporating by reference 42 U.S.C. § 405(b)); see also 42 C.F.R. §§ 405.701-405.750 (describing administrative appeals process for Medicare A and Medicare B claims). The procedures for Medicare A benefits and Medicare B benefits differ slightly.

In the case of Medicare A benefits, a Fiscal Intermediary makes the initial claim determination. See 42 C.F.R. §§ 405.701-402.704, 421.100(a), 421.200(a). A dissatisfied beneficiary, within sixty days after receipt of the initial claim determination by a Fiscal Intermediary, may request the Fiscal Intermediary to reconsider the claim decision. See 42 C.F.R. §§ 405.708-405.711. If the amount in dispute exceeds one hundred dollars, the beneficiary may then request a hearing before an administrative law judge (an "ALJ") within sixty days of receipt of the Fiscal Intermediary's reconsidered decision. See 42 U.S.C. §§ 405(b), 1395ff(b)(2)(A); 42 C.F.R. § 405.720. If dissatisfied with the ALJ's decision, a beneficiary may then request review by the Medicare Appeals Council (the "Appeals Council"). See 42 C.F.R. §§ 405.701(c), 405.724. After these procedures have been exhausted, and if the claims are greater than one thousand dollars, a beneficiary may seek Federal judicial review of the disputed claims. See 42 U.S.C. § 1395ff(b)(2)(A); 42 C.F.R. § 405.730; see also 20 C.F.R. part 404, subpart J (explaining general administrative appeal process for claims under SSA, including Medicare); Bodimetric, 903 F.2d at 483 (reviewing administrative appeal process for Medicare A claims).

In the case of Medicare B benefits, the procedure is the same, except that an additional administrative step is required prior to Federal judicial review. A dissatisfied beneficiary may seek reconsideration by the Fiscal Intermediary of its initial claim determination. See 42 C.F.R. §§ 405.801-405.812. If the amount in dispute is greater than one hundred dollars, a beneficiary may request a "fair hearing" before a hearing officer (the "Medicare Hearing Officer"),³ within six months of receipt of the Fiscal Intermediary's reconsidered determination.⁴ See 42 U.S.C. § 1395u(b)(3)(C); 42 C.F.R. §§ 405.820-405.835. If the amount in dispute exceeds five hundred dollars, a beneficiary may then request a hearing before an ALJ within sixty days of receipt of the decision of the Medicare Hearing Officer and, if still dissatisfied, can then request review by the Appeals Council. See 42 U.S.C. §§ 405(g), 1395ff(b)(2)(B); 42 C.F.R. § 405.801(c). Once these administrative procedures have been exhausted, if the claim is for at least one thousand dollars, a dissatisfied beneficiary may seek Federal judicial review.⁵ See 42 U.S.C. §§ 405(g), 1395ff(b)(2)(B); see also 20 C.F.R. part 404, subpart J; Abbey, 788 F.Supp. at 166 (reviewing administrative appellate process for Medicare B claims).

B. Disputed Claims In This Case⁶

This case concerns a total $850 in unpaid Medicare benefits. See Complaint at 1; see also Berkowitz Decl., ¶ 5. The disputed claims appear to arise from medical services rendered to Schwartz from 26 October 1992 through 29 October 1992, during an inpatient stay by Schwartz at the Hackensack Medical Center ("Hackensack Medical Center"). Moving Brief at 7; Berkowitz Decl., ¶ 5.

Under Medicare A, Schwartz submitted a claim for $3,600.89. Berkowitz Decl., ¶ 6. This claim was initially denied by New Jersey Blue Cross/Blue Shield ("NJ Blue Cross"), one of two Fiscal Intermediaries for Medicare in New Jersey,⁷ on the ground that Medicare was not Schwartz's primary insurer. Id., ¶ 6 & Ex. 1 (letter, dated 25 November 1992, denying claim). Subsequently, when NJ Blue Cross learned from proof submitted by Schwartz that Medicare was his primary insurer, his Medicare A claim was reprocessed. Id., ¶ 6 & Ex. 2 (letter, dated 6 May 1993, notifying Schwartz of reprocessing and payment of claim). NJ Blue Cross approved $2,652.75 of the claim and paid the hospital $2,300.75 for all covered services. Id. Schwartz remained responsible for uncovered services, as well as an inpatient deductible of $682. Id. By letter, dated 6 May 1993, Schwartz was notified of the payment determination and was advised of his right to appeal.⁸ Id., Ex. 2 at 2.

Schwartz also submitted a series of Medicare B claims. First, Schwartz submitted a claim for $610 for services provided by the Hackensack Medical Center Mobile Care Unit. Id., ¶ 7 & Exs. 3-4. After first rejecting this claim on the ground that Medicare was not the primary insurer of Schwartz, see id., Ex. 3 (letter, dated 9 December 1992, rejecting claim), NJ Blue Cross reprocessed the claim and paid $408,⁹ using $100 of the claim to satisfy Schwartz's Medicare B deductible and paying eighty percent of the remaining $510. Id., ¶ 8 & Ex. 4 (letter, dated 24 March 1993, notifying Schwartz of reprocessing and payment of claim). By letter, dated 24 March 1993, Schwartz was sent notice of the payment determination and advised of his right to appeal.¹⁰ Id., Ex. 4.

Second, Schwartz submitted a Medicare B claim for $70 for services provided by Dr. Glenn R. Silbert, M.D. ("Silbert"). Id., ¶ 9 & Exs. 5-6. This claim was processed by PA Blue Shield. Id. After first rejecting this claim on the ground that Medicare was not Schwartz's primary insurer, see id., Ex. 5 (letter, dated 30 April 1993, rejecting claim), PA Blue Shield reprocessed the claim, approved $48.17 and paid Schwartz a total of $38.55,¹¹ representing eighty percent of the approved amount plus one cent for delayed processing. Id., ¶ 8 & Ex. 6 (letter, dated 13 May 1993, notifying Schwartz of reprocessing and payment of claim). By letter, dated 13 May 1993, Schwartz was notified of the payment determination and advised of his right to appeal....