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Russell v. Sebelius

February 2, 2010


The opinion of the court was delivered by: J. Garvan Murtha, Senior District Judge.


The Magistrate Judge's Report and Recommendation was filed January 11, 2010. (Paper 25.) After de novo review and absent objection, the Report and Recommendation is AFFIRMED, APPROVED and ADOPTED. See 28 U.S.C. § 636(b)(1).

The Plaintiff's Motion for Order Reversing the Secretary's Decision (Paper 15) is GRANTED. The Defendant's Motion for Order Affirming the Decision of the Secretary (Paper 21) is DENIED. This case is REMANDED for further administrative proceedings; if necessary, a re-weighing of the evidence and another decision consistent with the Report and Recommendation.



JOHN M. CONROY, United States Magistrate Judge.

Plaintiff Elizabeth M. Russell brings this action against Defendant Kathleen Sebelius, Secretary of the United States Department of Health and Human Services ("Secretary"), pursuant to 42 U.S.C. §§ 405(g) and 1395ff(b)(1), seeking review of the Secretary's decision denying Russell Medicare Part A home health care coverage for skilled nursing services provided from June 26, 2004 through December 6, 2004. Pending before the Court are Russell's Motion seeking an order reversing the Secretary's decision (Doc. 15), and the Secretary's Motion seeking an order affirming the same (Doc. 21).

For the foregoing reasons, I recommend that Russell's Motion (Doc. 15) be GRANTED, the Secretary's Motion (Doc. 21) be DENIED, and the case be REMANDED for further proceedings.


I. Procedural History

Russell received home health services from the Visiting Nurse Association of Chittenden and Grand Isle Counties from June 26, 2004 through December 6, 2004 (hereafter "the service period"). Three coverage periods were comprised within this time frame: June 26, 2004 through August 24, 2004; August 25, 2004 through October 23, 2004; and October 24, 2004 through December 6, 2004. *fn1 Russell filed claims with Medicare's contracted fiscal intermediary, Associated Hospital Service ("AHS"), for reimbursement for the services provided, which claims were denied initially and upon reconsideration. Thereafter, Maximus Federal Services, a Medicare qualified independent contractor, also issued unfavorable determinations.

Russell timely requested a hearing before an Administrative Law Judge ("ALJ"), which occurred via video teleconference on July 18, 2007. ( See Administrative Record ("AR") 896–924.) On July 30, 2007, ALJ Brenda Etheridge Seman issued a decision denying Russell's consolidated claim on the grounds that Russell was not "home confined," within the meaning of the Medicare Act, during the service periods. (AR 11–20.) Russell requested review of the ALJ decision, and on February 15, 2008, the Medicare Appeals Council ("MAC") adopted the decision. (AR 3–4.)

On June 10, 2008, having exhausted all administrative remedies, Russell filed a Complaint against the Secretary, initiating this action.

II. Medical History

During the service period, Russell was approximately 67 years old, and was receiving home health services primarily for care of a non-healing surgical wound that resulted from hernia repair surgery which occurred on January 20, 2004. (AR 12, 17, 166–67, 452–53, 781–82.) Russell's major health issues following the surgery were as follows: she had a large, non-healing wound which ultimately required a skin graft almost one year after the initial surgery (AR 25, 543, 587, 804, 836); she fatigued easily, to the point of needing a blood transfusion (AR 25, 285, 503, 525, 527, 533, 535, 539, 587); and she experienced nausea, abdominal pain and swelling, and arthritic hip pain after ambulating (AR 239, 479, 525, 527, 529, 543, 569, 573, 587, 597, 603, 605, 609, 611, 816, 820.) Additionally, Russell suffered from hypertension "affecting daily functioning" and requiring "ongoing monitoring," pure hypercholesterolemia, and esophageal reflux. (AR 168–69, 781, 789–90.) As a result of her pain, Russell was prescribed the painkiller Vioxx (AR 453, 543), before switching to the painkillers Celebrex and Bextra in October 2004 (AR 479, 599, 605, 611, 782, 816, 820).

The bulk of Russell's medical care during the service period consisted of daily nurse visits for management and evaluation of Russell's wound, including assessment and documentation of the wound's size, color, granulation, odor, and drainage in "Wound Assessment Flow Sheets." ( See, e.g., AR 295–307; 920–21.) Additionally, in September 2004, Russell's treating physician, Dr. Borrazzo, ordered an MRI due to a "protrusion" on the right side of Russell's abdomen. (AR 543.) Also in September 2004, as mentioned above, Dr. Borrazzo scheduled a skin graft for November 2004. ( Id.)

On July 15, 2004, Dr. Borrazzo signed a Home Health Certification and Plan of Care ("Certification") in which he noted that, although Russell required services for "wound care daily," her "[p]ain is now minimal, wound bed with healthy granulation tissue, cont[inues] to have mod[erate] amount of drainage." (AR 166.) Dr. Borrazzo further noted in the July 2004 Certification that Russell "continues to fatigue easily but has been trying to increase ambulation." ( Id.) On September 2, 2004, Dr. Borrazzo signed a second Certification, wherein he ordered continued "daily" wound care, but indicated that Russell's wound was "decreasing in size slowly." (AR 452.) Finally, on November 4, 2004, Dr. Borrazzo signed a third Certification, wherein he again ordered "daily" wound care, but restated that the wound was "decreasing in size" and that there was "healthy granulation tissue present." (AR 781.) Dr. Borrazzo noted in the November 2004 Certification that there was an "[i]rregular shape" on the right side of Russell's wound, and that there was "bulging" and it was "sometimes tender." ( Id.) The Doctor further noted that Russell was experiencing "nausea assoc[iated] with eating[,] and feeling pain hard mass above wound." ( Id.)

Russell and her sister, Joyce Hojohn, submitted Affidavits to the ALJ. ( See AR 25–28.) Therein, they state that, from June 2004 through the end of the service period, Hojohn visited Russell three to four times each day to check on Russell, complete household chores at Russell's home, and care for Russell's dog. (AR 25, 27.) Hojohn's residence was located approximately 50 feet from Russell's, "across the backyard and through a gate." (AR 25.) Russell and Hojohn further state in their respective Affidavits that, during the relevant time period, Hojohn took Russell grocery shopping at Shaw's once or twice a month and to Big Lots to buy discounted canned goods once a month, for about 20 to 60 minutes per trip, with Hojohn doing all the driving, lifting, and carrying. (AR 25, 27.) In her Affidavit, Russell states that after these trips, she would come home feeling exhausted and needing to lay down and rest. (AR 25.) Finally, Russell and Hojohn state in their respective Affidavits that, beginning in July 2004, when the weather was nice, Russell would walk with Hojohn while Hojohn walked Russell's dog for a distance of approximately 50 feet. (AR 25, 27.) According to Russell and Hojohn, these short dog walks, as well as the 20– to 60–minute trips to the supermarket and to Big Lots a couple of times a month, were the only trips Russell took outside her home during the service period, other than when Hojohn or Russell's son took Russell to medical appointments. ( Id.) There is no evidence in the record that Russell attended any religious services or social engagements, or visited any stores other than the supermarket and Big Lots, during the service period.

Standard of Review

Title XVIII of the Social Security Act, commonly known as the Medicare Act, 42 U.S.C. § 1395 et seq., establishes the federal government's program of health insurance for the elderly. Connecticut Dep't of Soc. Servs. v. Leavitt, 428 F.3d 138, 141 (2d Cir.2005). The remedial purpose of the Medicare Act requires that it be broadly construed. Gartmann v. Sec'y of Dept. of Health and Human Servs., 633 F.Supp. 671, 679 (E.D.N.Y.1986), disagreed with on other grounds in New York ex rel. Bodnar v. Sec'y of Health and Human Servs., 903 F.2d 122, 125 (2d Cir.1990). "Care must be taken 'not to disentitle old, chronically ill and basically helpless, bewildered and confused people ... from the broad remedy which Congress intended to provide our senior citizens.' " Id. (quoting Ridgely v. Sec'y of Dep't of Health, Educ. and Welfare, 345 F.Supp. 983, 993 (D.Md.1972)). Nonetheless, claimants have the burden of proving their entitlement to Medicare benefits. Friedman v. Sec'y of Dept. of Health and Human Servs., 819 F.2d 42, 45 (2d Cir.1987).

Medicare has two parts, Parts A and B. Medicare Part A is automatic and premium-free; it provides reimbursement for inpatient hospital services, post-hospital extended care services, home health services, and hospice care. See McCreary v. Offner 172 F.3d 76, 78 (D.C.Cir.1999) (citing 42 U.S.C. §§ 1395c-i). Medicare Part B is a voluntary supplemental program that covers medical and other health care services. 42 U.S.C. §§ 1395j-x. This dispute concerns payment for home health services under Medicare Part A. See 42 U.S.C. § 1395d(a)(3).

The Medicare program is administered through private contractors by the Centers for Medicare and Medicaid Services ("CMS"), which is part of the United States Department of Health and Human Services ("HHS"). 42 U.S.C. §§ 1395h, 1395u. The contractors (usually insurance companies) are responsible for making an initial determination on claims under Parts A or B on the basis of regulations and other policies articulated by the Secretary. 42 U.S.C. § 1395ff(a)(1). Contractors responsible for making coverage determinations regarding skilled nursing services are referred to as "fiscal intermediaries." When a claim is filed, a fiscal intermediary, in this case AHS, makes an initial determination regarding whether to pay the claim on the basis of the information provided by the skilled nursing facility, in this case the Visiting Nurse Association of Chittenden and Grand Isle Counties. 42 U.S.C. § 1395ff(a)(1); 42 C.F.R. § 405.904(a)(2). If the claimant is dissatisfied with the intermediary's initial determination, he or she is entitled to request a redetermination by the intermediary, see 42 U.S.C. § 1395ff(a)(3); 42 C.F.R. § 405.940, and then a redetermination by a qualified independent contractor ("QIC"), in this case Maximus Federal Services, see 42 U.S.C. § 1395ff(c)(3)(B)(i); 42 C.F.R. § 405.968.

If the claimant is dissatisfied with the decision of the QIC, and the amount in controversy exceeds a certain threshold amount, the claimant may request a hearing before an ALJ. 42 U.S.C. § 1395ff(d)(1); 42 C.F.R. §§ 405.1000, 405.1002. At that hearing, the claimant has an opportunity to submit new evidence, and, if the intermediary elects to participate in the hearing, the claimant may conduct discovery. 42 C.F.R. §§ 405.1018, 405.1036, 405.1037. If the claimant is dissatisfied with the ALJ's decision, he or she may appeal to the Medicare Appeals Council ("MAC"). 42 U.S.C. § 1395ff(d)(2); 42 C.F.R. §§ 405.902, 405.1100. Finally, the MAC issues a decision, which is subject to review in federal court, see 42 U.S.C. § 1395ff(b)(1)(A); 42 C.F.R. §§ 405.1130, 405.1136, if the amount in controversy is at least $1,000, adjusted for inflation, see 42 U.S.C. § 1395ff(b)(1)(E)(i); 42 C.F.R. § 405.1006(c).

The Medicare statute unambiguously vests final authority in the Secretary, and no one else, to determine whether reimbursement for services should be made. Bodnar, 903 F.2d at 125 (citing 42 U.S.C. § 1395ff(a); Heckler v. Ringer, 466 U.S. 602, 617, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984) ("The Secretary's decision as to whether a particular medical service is 'reasonable and necessary' and the means by which she implements her decision ... are clearly discretionary decisions.")). In evaluating a claim for payment, the Secretary must determine whether the relevant services satisfy the fundamental requirement of 42 U.S.C. § 1395y(a), which requires that the services be "reasonable and necessary for the diagnosis or treatment of illness or injury." 42 U.S.C. § 1395y(a)(1)(A); see New York ex rel. Holland v. Sullivan, 927 F.2d 57, 58–59 (2d Cir.1991). This statutory standard gives the Secretary "wide discretion" to determine whether the numerous ...

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