United States District Court, D. Vermont
MARCELLA RYAN and JOHN HERBERT, on behalf of themselves and all others similarly situated, Plaintiffs,
SYLVIA MATHEWS BURWELL, Secretary of Health and Human Services, Defendant.
OPINION AND ORDER RE: PLAINTIFFS' MOTION TO CERTIFY A REGIONAL CLASS (Doc. 13)
Geoffrey W. Crawford,
Plaintiffs Marcella Ryan and John Herbert are Medicare beneficiaries who receive home health care services. They allege that the Secretary of Health and Human Services has systematically failed to follow her own regulations and guidance governing appeals of Medicare coverage for home health care services. (Doc. 1 at 1, ¶1.) They allege that Medicare policy requires Medicare contractors and appellate reviewers to give "great weight" to a prior favorable final appellate decision finding a beneficiary to be "confined to the home" (or "homebound") when deciding whether a beneficiary is homebound in a subsequent appeal. (Id.) Plaintiffs allege that the Secretary has failed to apply that policy, and "routinely denies Medicare coverage for home health services on the basis that Plaintiffs were 'not homebound,  despite the fact that administrative law judges have issued favorable final decisions finding Plaintiffs homebound." (Id. at 1-2,
¶ 2.) Plaintiffs seek declaratory and injunctive relief, and in particular seek an order that the Medicare review process be corrected and that Plaintiffs' denied claims for coverage be "re-review[ed]." (Id. at 24, 14(e).)
Plaintiffs have moved to certify a regional class under Rule 23 of the Federal Rules of Civil Procedure. (Doc. 13.) They seek to define the class as:
All beneficiaries of Medicare Parts A or B, in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont (Medicare Administrative Contractor Jurisdiction K) who (a) have received Medicare coverage for home health nursing or therapy services on the basis of a "favorable final appellate decision" and (b) who have subsequently been denied, or will be denied, coverage for additional services on the basis of not being homebound, on or after January 1, 2010.
(Doc. 1 at 3-4, ¶ 12; Doc. 34 at 9.) The Secretary opposes the Motion (Doc. 24), and Plaintiffs have filed a Reply (Doc. 34). The court heard argument on September 21, 2015. Final briefing on the matter was completed on December 7, 2015. For the reasons stated below, Plaintiffs' Motion to Certify a Regional Class (Doc. 13) is GRANTED.
Previously in this case, the court outlined some of the background of the Medicare and Medicaid programs, as well as the statutory and regulatory requirements for eligibility for home health benefits under Medicare. (Doc. 44 at 1-3.) Eligibility for home health benefits under Medicare is determined by statute, 42 U.S.C. § 1395f(a)(2)(C), and further defined by regulation, 42 C.F.R. § 409.42. One of the requirements for eligibility is that the beneficiary be confined to his or her home (or "homebound"). Under § 1395f(a), an individual is confined to his or her home
if the individual has a condition, due to an illness or injury, that restricts the ability of the individual to leave his or her home except with the assistance of another individual or the aid of a supportive device (such as crutches, a cane, a wheelchair, or a walker), or if the individual has a condition such that leaving his or her home is medically contraindicated. While an individual does not have to be bedridden to be considered "confined to his home", the condition of the individual should be such that there exists a normal inability to leave home and that leaving home requires a considerable and taxing effort by the individual.
Determining whether a beneficiary is homebound is a fact-intensive inquiry.
The court also previously outlined the administrative claims review process. (See Doc. 44 at 3-4.) There is a multiple-level administrative process for Medicare determinations and review that applies when a claim is premised on a beneficiary being homebound. See generally 42 U.S.C. § 1395ff; 42 C.F.R. § 405.904. An "initial determination" is made by a Medicare Administrative Contractor (MAC). See 42 C.F.R. § 405.904(a)(2). A beneficiary may then request a "redetermination." Id. Following the redetermination, the beneficiary may pursue administrative appeals, beginning with a request for "reconsideration, " which is performed by a "Qualified Independent Contractor (QIC)." Id. After reconsideration, a beneficiary may request a hearing before an administrative law judge (ALJ). Id. Finally, a beneficiary may request "review" by the Medicare Appeals Council. Id. 
Manuals issued by the Department of Health and Human Services' Centers for Medicare and Medicaid Services (CMS) provide guidance to the decisionmakers in the administrative process. Two of those manuals are relevant in this case. The Medicare Program Integrity Manual (MPIM) sets policies regarding how to conduct the "medical review" necessary to determine whether to pay a claim. Ctrs. for Medicare & Medicaid Servs., https://www.cms.gov/ regulations-and-guidance/guidance/manuals/internet-only-manuals-ioms-items/cms019033.html. The Medicare Claims Processing Manual (MCPM) sets policies regarding adjudicating administrative appeals of Medicare claim denials. Ctrs. for Medicare & Medicaid Servs., https:// www.cms.gov/regulations-and-guidance/guidance/manuals/internet-only-manuals-ioms-items/cmsO 18912.html.
In 2004, language was added to both the MPIM and the MCPM creating the Prior Favorable Homebound policy at issue in this case. The 2004 language instructed Regional Home Health Intermediaries (RHHIs) to:
Afford the favorable final appellate decision that a beneficiary is "confined to home" great weight in evaluating whether the beneficiary is confined to the home when reviewing services rendered after the service date of the claim addressed in the favorable final appellate decision unless there has been a change in facts (such as medical improvement or an advance in medical technology) that has improved the beneficiary's ability to leave the home.
CMS Manual System, Pub. 100-08 MPIM, Transmittal R71PI2, at 54 (Apr. 9, 2004), https://www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R71PI2.pdf; CMS Manual System, Pub. 100-04 MCPM, Transmittal 381, § 50.7.11(D), https:// www.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R381CP.pdf (Nov. 26, 2004).
RHHIs, together with "carriers, " are now known as MACs. (See Doc. 44 at 3 ("MACs were formerly known as 'fiscal intermediaries' for Part A and 'carriers' for Part B.").) Since MACs are involved only at the determination and redetermination stages of the administrative process, the Prior Favorable Homebound policy language did not directly apply to the "reconsideration, " "hearing, " or "review" stages. Nevertheless, QICs, ALJs, and the Medicare Appeals Council are required to give "substantial deference" to CMS program guidance (including program manual instructions) if applicable to a particular case, and are required to explain their reasons for declining to follow those policies. See 42 C.F.R. §§ 405.968(b)(2), (3) (QICs); 405.1062(a), (b) (ALJs and the Medicare Appeals Council).
In 2008, CMS deleted the Prior Favorable Homebound policy language from the MCPM. CMS Manual System, Pub. 100-04 MCPM, Transmittal 1485, https://www.cms.gov/ Regulations-and-Guidance/Guidance/Transmittals/Downloads/Rl485CP.pdf (Mar. 28, 2008). The Secretary asserts that, through an oversight, the language in the MPIM was not deleted at the same time. (Doc. 51 at 2.) According to the Secretary, this litigation brought that oversight to CMS's attention. (Id.) The language remained in the MPIM until it was deleted effective August 3, 2015. CMS Manual ...