Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)

2011 WL 5104355 United States District Court,
D. Vermont.
Glenda JIMMO, K.R. by her guardian Kenneth Roberts, Miriam Katz, Edith Masterman, Mary Patricia Boitano, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Parkinson’s Action Network,
Paralyzed Veterans of America, American Academy of Physical Medicine and Rehabilitation,
Alzheimer’s Association, United Cerebral Palsy, and Rosalie McGill, on behalf of themselves and
all others similarly situated, Plaintiffs, v.
Kathleen SEBELIUS, in her official capacity as Secretary of Health and Human Services, Defendant.
No. 5:11–cv–17. | Oct. 25, 2011.
Attorneys and Law Firms
Devon J. Green, Vermont Legal Aid, Inc., Montpelier, VT, Gill Deford, Esq., Judith A. Stein, Esq., Margaret Murphy, Esq., Wey–Wey Kwok, Esq., Center for Medicare Advocacy, Inc., Willimantic, CT, Michael Kelly Benvenuto, Vermont Legal Aid, Inc., Burlington, VT, Toby S. Edelman, Esq., Center for Medicare Advocacy, Inc., Washington, DC, for Plaintiffs.
Steven Y. Bressler, Esq., Tamra Moore, Sausa, U.S. Department of Justice, Washington, DC, for Defendant.
Opinion
OPINION AND ORDER DENYING IN PART AND GRANTING IN PART DEFENDANT’S MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION AND DENYING DEFENDANT’S MOTION TO DISMISS FOR FAILURE TO STATE
A CLAIM
(Doc. 25)
CHRISTINA REISS, Chief Judge.
*1 This matter came before the court on the motions to dismiss for lack of subject matter jurisdiction under

Fed.R.Civ.P. 12(b)(1), and for failure to state a claim under Fed.R.Civ.P. 12(b)(6). filed by Defendant, the Secretary of Health and Human Services Kathleen Sebelius (“the Secretary”) in her official capacity (Doc. 25). The Secretary seeks dismissal of the Amended Complaint filed by six individual Medicare beneficiaries (the “Individual Plaintiffs”) and seven national organizations (the “Organizational Plaintiffs”) (collectively, “Plaintiffs”). Plaintiffs oppose dismissal.
The crux of the Amended Complaint is an allegation that the Secretary has adopted an unlawful and clandestine standard to determine whether Medicare beneficiaries are entitled to coverage, resulting in the wrongful termination, reduction, and denial of Medicare coverage for beneficiaries with medical conditions that are not expected to improve. Plaintiffs seek to certify a nationwide class and request, among other relief, an injunction or writ of mandamus enjoining the Secretary from applying this alleged unlawful standard.
The court heard oral argument on these motions on July 14, 2011, and the parties completed their supplemental briefing on August 8, 2011. Plaintiffs are represented by the Center for Medicare Advocacy, Inc. and Vermont Legal Aid, Inc. The Secretary is represented by Steven Y. Bressler, Esq. and Tamra Moore, Esq.
For the reasons set forth below, the Secretary’s motion to dismiss for lack of subject matter jurisdiction is DENIED IN PART AND GRANTED IN PART, and the Secretary’s motion to dismiss for failure to state a claim is DENIED.
I. The Amended Complaint. The Medicare program, established under Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395–1395 iii (the “Medicare Act”), “is the federal government’s health-insurance program for the elderly.” Conn. Dept. of Soc. Servs. v. Leavitt, 428 F.3d 138, 141 (2d Cir.2005). It is administered by the Center for Medicaid and Medicare Services (“CMS”), which is a component of HHS.
Under the Medicare Act, payment is precluded for items and services that “are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member[.]” 42 U.S.C. § 1395y(a)(1)(A). Coverage determinations are required by law to be conducted on an individualized basis and cannot be the subject of rules of thumb.
In their Amended Complaint, Plaintiffs allege that the
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Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
Secretary “imposes a covert rule of thumb that operates as an additional and illegal condition of coverage and results in the termination, reduction, or denial of coverage for thousands of Medicare beneficiaries annually.” (Doc. 13 ¶ 1.) This additional condition of eligibility, which Plaintiffs allege is primarily implemented at the lower levels of Medicare’s administrative review process, denies coverage where the beneficiary needs “maintenance services only,” has “plateaued,” or is “chronic,” “medically stable,” or not improving. (Id. ¶ 2.) Plaintiffs refer to this “covert rule of thumb” or “clandestine policy” as the “Improvement Standard.” (Id. ¶¶ 2–3.)
*2 Plaintiffs allege that, contrary to the Medicare Act and federal regulations, the Improvement Standard precludes coverage for beneficiaries with conditions that are not expected to improve or that have not improved over the course of treatment. They allege that the Improvement Standard has been implemented without proper rulemaking procedures against beneficiaries that have little or no understanding of its application and no ability or reasonable opportunity to confront it. According to Plaintiffs,
[u]pon information and belief, it is the standard practice of providers, contractors, QIOs, QICs, and IREs to apply LCDs and internal guidelines and policies that establish the Improvement Standard as a rule of thumb on which Medicare coverage is conditioned, in disregard of the regulatory and manual provisions that require a coverage determination to be based on the beneficiary’s individual condition and needs.
(Id. ¶ 44.) Plaintiffs further allege that because “the Secretary is aware that the Improvement Standard is consistently imposed by [ ] Medicare contractors,” and because she “has not taken action to require that the proper policies be carried out,” (id. ¶ 47), the “Improvement Standard ... amounts to a clandestine policy that is condoned and implemented by the Secretary .” (Id. ¶ 3.)
As grounds for relief, Plaintiffs assert that the Improvement Standard violates the Medicare Act and its regulations, the Administrative Procedure Act (“APA”), the Freedom of Information Act (“FOIA”), and the Due Process Clause of the Fifth Amendment. They seek a declaration that the Improvement Standard is unlawful

and a permanent injunction or writ of mandamus prohibiting the Secretary from applying the Improvement Standard. Plaintiffs also seek an order directing the Secretary to, inter alia, review all adverse coverage decisions for the named plaintiffs and class members that rely on the Improvement Standard and to reissue those decisions without application of the Improvement Standard. Furthermore, Plaintiffs seek a declaration ordering the Secretary to correct any written agency materials that may endorse the Improvement Standard. (Id. at 42–43.)
With regard to each of the named Individual Plaintiffs, Glenda Jimmo, K.R., Miriam Katz, Edith Masterman, Mary Patricia Boitano, and Rosalie McGill, the Amended Complaint describes the administrative process (or lack thereof) by which each beneficiary’s claim for coverage was denied, the nature of the medical condition for which coverage was sought, and the manner in which the alleged Improvement Standard was invoked to deny coverage.
With regard to the Organizational Plaintiffs, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Parkinson’s Action Network, Paralyzed Veterans of America, American Academy of Physical Medicine and Rehabilitation, Alzheimer’s Disease and Related Disorders Association, Inc. d/b/a Alzheimer’s Association, and United Cerebral Palsy, the Amended Complaint alleges the nature of each organization, its primary activities and mission, and the approximate number of its members who are Medicare beneficiaries. With the exception of American Academy of Physical Medicine and Rehabilitation (“AAPM & R”), Plaintiffs allege that at least one of their members would have standing to sue. Plaintiffs further allege that each Organizational Plaintiff provided notice to the Secretary and Donald Berwick, the CMS Administrator, that the Improvement Standard violates federal statutory, regulatory, and constitutional law and demanded that the Secretary and the CMS Administrator “direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application.” (Id. at ¶¶ 92, 101, 109, 117, 124, 132.)
II. Conclusions of Law and Analysis. *3 The Secretary moves to dismiss for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1), and for failure to state a claim upon which relief can be granted under Fed.R.Civ.P. 12(b)(6). Because the court “lacks the statutory or constitutional power to adjudicate” the merits of claims over which it does not have subject matter jurisdiction, Makarova v. United States, 201 F.3d 110,
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Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
113 (2d Cir.2000), the court first addresses the Secretary’s Rule 12(b)(1) motion.

A. The Secretary’s Rule 12(b)(1) Motion to Dismiss for Lack of Subject Matter Jurisdiction. Plaintiffs assert jurisdiction under 42 U.S.C. § 405(g), which provides the court with jurisdiction to review the Secretary’s “final decision[s]” on claims arising under the Medicare Act. Plaintiffs also invoke federal question jurisdiction under 28 U.S.C. § 1331, and mandamus jurisdiction under 28 U.S.C. § 1361.

With regard to Plaintiff Edith Masterman, the Secretary argues she has failed to satisfy the non-waivable requirement of presentment. With regard to Plaintiffs Miriam Katz,1 Mary Patricia Boitano, and Rosalie McGill, the Secretary alleges they must exhaust their administrative remedies before § 405(g) can provide jurisdiction over their claims. With regard to Plaintiffs Glenda Jimmo and K.R., the Secretary argues that while they have exhausted their administrative remedies, they lack Article III standing to bring suit, and therefore this court cannot constitutionally adjudicate their claims.

1

As the named executor in her deceased husband David

Katz’s will, Plaintiff Miriam Katz is prosecuting this

litigation on his behalf. (Doc. 13 ¶ 64.)

The Secretary contends that 28 U.S.C. § 405(h) specifically excludes § 1331 as an avenue for judicial review of claims arising under the Medicare Act. Further, the Secretary argues that the nature of Plaintiffs’ allegations and their requested relief renders the remedy of mandamus inappropriate in this case.
Finally, the Secretary argues that this court lacks subject matter jurisdiction over the Organizational Plaintiffs’ claims because (1) Plaintiffs have not sufficiently alleged associational standing; and (2) even if standing is assumed, the Organizational Plaintiffs have not and cannot establish § 405(g) jurisdiction by presenting their claims to the Secretary and exhausting their administrative remedies.
Plaintiffs bear the burden of establishing this court’s subject matter jurisdiction over their claims. See Lujan v. Defenders of Wildlife, 504 U.S 555, 561 (1992). When deciding a Rule 12(b)(1) motion “at the pleading stage” before any “evidentiary hearings have been held,” the court “must accept as true all material facts alleged in the [Amended C]omplaint and draw all reasonable inferences in [Plaintiffs’] favor.” Conyers v. Rossides, 558 F.3d 137,

143 (2d Cir.2009) (internal quotation marks and citation omitted). “Nevertheless, even ‘on a motion to dismiss, courts are not bound to accept as true a legal conclusion couched as a factual allegation.’ “ Id. (quoting Sharkey v. Quarantillo, 541 F.3d 75, 83 (2d Cir.2008) (other internal quotation marks omitted)).

1. 42 U.S.C. § 405(g) Jurisdiction. *4 The Secretary seeks dismissal on the grounds that all Plaintiffs (with the exception of Ms. Jimmo and K.R.) have failed to establish jurisdiction under 42 U.S.C. § 405(g). 42 U.S.C. § 405(h), made applicable to the Medicare Act by 42 U.S.C. § 1395ii, provides that 42 U.S.C. § 405(g) “to the exclusion of 28 U.S.C. § 1331, is the sole avenue for judicial review for all ‘claim[s] arising under’ the Medicare Act.” Heckler v. Ringer, 466 U.S. 602, 614–15 (1984) (quoting 42 U.S.C. § 405(h)).2 A claim arises under the Medicare Act when that statute “provides both the standing and the substantive basis for” the claim. Weinberger v. Salfi, 422 U.S. 749, 760–61 (1975). Section 405(g), in turn, provides that:

2

As applied to the Medicare Act by 42 U.S.C. § 1395ii,

§ 405(h) provides that: “No findings of fact or decision

of the [Secretary] shall be reviewed by any person,

tribunal, or governmental agency except as herein

provided. No action against the United States, the

[Secretary], or any officer or employee thereof shall be

brought under section 1331 or 1346 of Title 28 to

recover on any claim arising under [the Medicare

Act].”

Any individual, after any final decision of the [Secretary] made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced ... in the district court of the United States for the judicial district in which the plaintiff resides[.] 42 U.S.C. § 405(g). The requirement of a “final decision by the [Secretary]” consists of two elements: (1) the “jurisdictional,” non-waivable requirement that a claim has been presented to the Secretary, and (2) the “waivable” requirement that the administrative remedies prescribed by the Secretary have been exhausted. See Mathews v. Eldridge, 424 U.S. 319, 328–30 (1976); Salfi, 422 U.S. at 764–65. The exhaustion requirement may be waived by the Secretary, or, in appropriate circumstances, by the court. See City of New York v. Heckler, 742 F.2d 729, 736 (2d Cir.1984) (internal citations omitted).
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Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)

a. The Individual Plaintiffs’ Claims under § 405(g). The Secretary seeks dismissal of Ms. Katz, Ms. Masterman, Ms. Boitano, and Ms. McGill’s claims for failure to establish subject matter jurisdiction under the Medicare Act pursuant to § 405(g). Plaintiffs do not dispute that their claims “arise under” the Medicare Act, and thus the exclusivity provisions of § 405(g) would normally apply. They point out that, with the exception of Ms. Masterman, the Individual Plaintiffs have all presented their claims to the Secretary. They also concede that with the exception of Ms. Jimmo and K.R., they have not exhausted their administrative remedies and received the Secretary’s final decision with regard to their claims. However, based on the nature of their claims, they argue that the court should waive the exhaustion requirement.
Because presentment is non-waivable, the court turns first to Plaintiffs’ contention that the exclusivity of § 405(g), as prescribed by § 405(h), should not apply to Ms. Masterman’s claims because such application would deny her judicial review.3

3

In the alternative, Plaintiffs allege federal question

jurisdiction for Ms. Masterman’s claims under 28

U.S.C. § 1331.

i. Ms. Masterman’s Presentment Requirement. According to the Amended Complaint, the only home health agency (“HHA”) in Ms. Masterman’s geographic area refused to accept her as a patient because “Medicare will not pay for a chronic problem,” and she needs long term care. (Doc. 13 ¶ 71.) As a result, no services have been provided, and no claim for coverage has been presented to the Secretary. Since only providers can seek an initial coverage determination, Ms. Masterman argues that the refusal to provide services effectively bars her from the administrative process, rendering it impossible for her to satisfy the jurisdictional presentment requirement of § 405(g).
*5 The Secretary disagrees, arguing that Ms. Masterman has the ability to trigger administrative review by forcing her provider to make a claim for benefits. Although the Secretary concedes this procedure would require Ms. Masterman to assume liability for the cost of any uncovered services, the Secretary argues that this financial risk is insufficient to justify federal question jurisdiction.
In Shalala v. Illinois Council on Long Term Care, Inc., 529 U .S. 1 (2000), the Court interpreted Bowen v. Mich. Acad. of Family Physicians, 476 U.S. 667 (1986), to hold

that § 405(h) “does not apply ... where application of § 405(h) would not simply channel review through the agency, but would mean no review at all.” Illinois Council, 529 U.S. at 19. Other courts have explained that this exception “applies not only when administrative regulations foreclose judicial review, but also when roadblocks practically cut off any avenue to federal court[;] ... [t]he difficulties must be severe enough to render judicial review unavailable as a practical matter.” Am. Chiropractic Ass’n v. Leavitt, 431 F.3d 812, 816 (D.C.Cir.2005). Under such circumstances, a plaintiff may invoke federal question jurisdiction under § 1331 to bring claims arising under the Medicare Act.
Although this case presents a close question, the court cannot conclude, based upon the record before it, that judicial review is unavailable to Ms. Masterman as a practical matter. As the Secretary points out, Ms. Masterman can force her HHA to submit a claim through a procedure known as “demand billing.” A “demand bill” is a “claim submitted by an HHA to [CMS] for services or items that the HHA believes are not covered but which the HHA must submit to [CMS] at the request of the beneficiary[.]” Lutwin v. Thompson, 361 F.3d 146, 149 (2d Cir.2004) (internal quotation marks and alterations omitted). To require submission of a demand bill, the beneficiary must agree to pay the HHA for services that CMS determines are not covered by Medicare. See id. A beneficiary has this option when an HHA “prospectively decline[s] to provide ... services ... when it conclude[s],” as Ms. Masterman’s HHA did here, “that [CMS] would not cover those services. Id.4 This would “trigger the administrative process, at the end of which is judicial review of the Secretary’s final decision.” Am. Chiropractic Ass’n, 431 F.3d at 817. Some potential difficulty or financial hardship is generally not enough. See Ringer, 466 U.S. at 622, 625 (holding that Ringer’s claim arose under the Medicare Act and required presentment even though “some ... surgeons may well decline to perform the requested surgery because of fear that the Secretary will not find the surgery ‘reasonable and necessary’ and thus will refuse to reimburse them.”).

4

When an HHA declines to provide services because it

believes that such services will not be covered by

Medicare, CMS requires it to provide the beneficiary

with a “Home Health Advance Beneficiary Notice.” On

this notice, the beneficiary may trigger demand billing

by selecting the following option: “I want the items

and/or services ... and I agree to pay for the items

and/or services myself if Medicare or my other

insurance doesn’t pay.”

Here, Ms. Masterman has not established that she is 4

Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
financially unable to reimburse her HHA in the event services are not covered or that demand billing is not available to her. She has thus not established that applying § 405(h) to her claims renders judicial review unavailable. Accordingly, Ms. Masterman is required to present her claims to the Secretary, and jurisdiction under both § 405(g) and § 1331 is not available. The Secretary’s motion to dismiss Ms. Masterman’s claim for lack of subject matter jurisdiction is therefore GRANTED.
ii. Waiver of Exhaustion for Remaining Individual Plaintiffs. *6 Plaintiffs ask the court to waive the requirement that they exhaust their administrative remedies for all Individual Plaintiffs who have not done so. The Secretary opposes this request, asserting that exhaustion is required before § 405(g) provides jurisdiction for judicial review. The Secretary argues that Plaintiffs’ claims, although framed as resulting from a “clandestine policy,” are merely claims that the services the Individual Plaintiffs received are “reasonable and necessary” under the Secretary’s valid regulations and thus are in essence claims of “an aggregation of individual errors without more.” (Doc. 25–1 at 31 (citing Kildare v. Saenz, 325 F.3d 1078, 1083 (9th Cir.2003)) (“[A]ll that is alleged is a series of claimed irregularities in individual cases that is entirely dependent on the ... underlying claims for benefits[.] An aggregation of individual errors without more does not meet the collaterally requirement as articulated in City of New York [.]”)). Thus, the Secretary argues that the Individual Plaintiffs’ claims fall squarely within the agency’s expertise in implementing the Medicare Act and turn on the sort of factual development for which the administrative process is designed. The Secretary cites Ringer, 466 U.S. at 614, for these propositions.
In Ringer, the plaintiffs challenged the Secretary’s policy of refusing coverage for a certain surgical procedure when used to treat a particular condition. Id. at 610. The Court declined to waive exhaustion because the plaintiffs were faulting the Secretary’s decision that the treatment was not “reasonable and necessary,” and thus their claims were substantive rather than procedural. Id. at 607, 614. The Court found plaintiffs’ claims were not “collateral” because the plaintiffs sought “relief that [would] allow them to receive benefits yet bypass [the] administrative process altogether.’ “ Id. at 619, 624. Thus, despite any “procedural components” to the plaintiffs’ claim, or their emphasis on the “presumptive nature of the Secretary’s ... rule,” the claim was “essentially one requesting the payment of benefits [.]” Id. at 620, 624; see also Saenz, 325 F.3d at 1083 (“[w]ithout a specific policy, and with

only allegations of idiosyncratic individual errors, whether [the defendants] committed the alleged errors must be determined in the context of each individual [plaintiff’s administrative] proceedings”).
Plaintiffs here contend the instant case is distinguishable from Ringer and argue that under Second Circuit precedent they have established everything that is required for waiver of exhaustion.
The decision whether waiver of exhaustion is appropriate is “intensely practical,” rather than technical or formulaic. Bowen v. City of New York, 476 U.S. 467, 484 (1986) (internal citation omitted). Judicial waiver is appropriate where the plaintiffs’ legal claims are collateral to their demand for benefits, where exhaustion would be futile, or where the harm suffered pending exhaustion would be irreparable. See Mathews, 424 U.S. at 330–32. “[N]o one factor is critical,” and a court must balance “the competing considerations to arrive at a just result under the circumstances presented.” City of New York, 742 F.2d at 736. In deciding whether waiver is appropriate, the court must:
*7 prevent[ ] premature interference with agency processes, so that the agency may function efficiently and so that it may have an opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review.
Mich. Acad. of Family Physicians, 476 U.S. at 484 (quoting Salfi, 422 U.S. at 765).
As Plaintiffs correctly point out, courts have found waiver in cases where plaintiffs have sought to eradicate a “procedural irregularity” in the administrative appeals process, rather than challenge the application of valid regulations to their own individual cases. For example, in City of New York, a case involving claims for Social Security disability benefits, the plaintiffs alleged that, “[i]n disregard of the regulatory requirement to conduct an individualized assessment of the residual functional capacity of each claimant, [the Secretary], informally and without public disclosure, adopted an administrative practice that effectively imposed a presumption upon the determination of eligibility for ... benefits.” City of New York, 742 F.2d at 732. Specifically, the plaintiffs alleged that claimants whose mental illness did not meet particular diagnoses were presumed to have retained the ability to perform at least light unskilled work and were
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Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)

therefore ineligible for benefits. Id. The Second Circuit found that the plaintiffs’ claim was “substantially collateral” to their individual claims for benefits because they complained “fundamentally of a procedural irregularity and not of the Secretary’s substantive standards of eligibility,” and because the suit did not seek an adjudication of the merits of the underlying claims. Id. at 737. The Second Circuit further found:

Moreover, under the circumstances of this case, exhaustion of administrative remedies would have been futile. Although exhaustion might have resulted in recovery of retroactive benefits for some members of the class, as was also true in Eldridge, the administrative process cannot vindicate the procedural rights asserted in this litigation. The class members complain of a procedural irregularity—the failure of the Secretary to base eligibility determinations on individualized assessments of a claimant’s residual functional capacity. This procedural right, guaranteed by the Secretary’s regulations, cannot be vindicated by an ultimate determination of eligibility. For that reason further exhaustion justifiably may be waived.

Id.
In City of New York, the Second Circuit additionally observed that it could “discern no legitimate interest to be advanced by requiring plaintiffs to travel through the administrative maze as a prerequisite of a judicial hearing. This is not a case ... where the claim asserted could benefit from further factual development or from the agency’s ‘experience and expertise[,]’ “ “[n]or is this a case where exhaustion serves to ‘prevent[ ] premature interference with agency processes’ or to allow the agency ‘an opportunity to correct its own errors.’ “ Id. (internal citations omitted). The court pointed out that, “[a]s in Eldridge it is not realistic to ‘expect that the Secretary would consider substantial changes in the current administrative review system at the behest of a single aid recipient ... in an adjudicatory context.’ “ Id. (quoting Eldridge, 424 U.S. at 330).5

5

The Secretary argues that City of New York is

distinguishable because in that case the challenged

policy was unlawful as applied to every claimant, regardless of the circumstances underlying each individual claim. By contrast, in this case, the Secretary contends that, pursuant to applicable regulations, there are circumstances in which it is perfectly acceptable for the Secretary to consider a beneficiary’s stability and to deny Medicare coverage when there is no reasonable expectation that the beneficiary’s condition will change. Plaintiffs, however, allege that the Improvement Standard is applied without regard to the particular services for which coverage is sought and without regard to the unique condition of each beneficiary. As alleged, the Improvement Standard thus constitutes the same “procedural irregularity” at issue in City of New York.
*8 A similar approach was adopted in New York v. Sullivan, 906 F .2d 910, 914–18 (2d Cir.1990), and Fox v. Bowen, 656 F.Supp. 1236, 1244 (D.Conn.1987). In Sullivan, another Social Security disability case, the plaintiffs challenged the Secretary’s exclusive reliance on certain treadmill testing, rather than the unique condition of each claimant, to determine the claimants’ ability to work. See Sullivan, 906 F.2d at 914. In Fox, as here, the plaintiffs alleged that “the Secretary denies Medicare benefits on the basis of informal ‘rules of thumb’ that fail to take into account each claimant’s individualized need[.]” Fox, 656 F.Supp. at 1244. For the same reasons set forth in City of New York, the courts in both cases granted judicial waiver of § 405(g)’s exhaustion requirement.
Here, as alleged in the Amended Complaint, the Improvement Standard is sufficiently analogous to the challenged policies in City of New York, State of New York, and Fox to warrant a conclusion that Plaintiffs’ claims are substantially collateral to their individual claims for benefits. See Abbey v. Sullivan, 978 F.2d 37, 45 (2d Cir.1992) (rejecting request for § 405(g) waiver, but noting that the case would be different had the plaintiffs alleged that “the Secretary [had] adopted a clandestine policy that violates the Medicare Act”). Unlike in Ringer, where a successful lawsuit would have meant that only “ministerial details” remained before the plaintiffs would receive benefits, 466 U.S. at 615, Plaintiffs have no guarantee of coverage even if they succeed on their claims. More importantly, Plaintiffs do not ask the court to adjudicate the merits of their individual claims or award them benefits; rather, they seek declaratory, injunctive, and mandamus relief. See David v. Heckler, 591 F.Supp. 1033, 1039 (S.D.N.Y.1984) (noting “[t]he instant case is distinguishable [from Ringer ] since plaintiffs seek prospective relief against a continuing illegal practice rather than specific benefits.”).
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Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)

Moreover, requiring Plaintiffs to pursue their claims at the administrative level would be futile even if they eventually obtained favorable decisions because such an outcome would not address the thrust of their Amended Complaint which is the use of the Improvement Standard in the lower levels of coverage determinations. Although the Secretary points to various instances in which the Medicare Appeals Council (“MAC”) has overturned ALJ decisions because the ALJ failed “to conduct the kind of individualized inquiry called for by the applicable regulations and manual provisions,” and improperly denied coverage because there was no expectation of improvement in the beneficiary’s condition, see Doc. 25–1 at 32, as the Supreme Court has explained, “[s]uch observations ... merely serve to remind us why exhaustion is the rule in the vast majority of cases; they do not aid the Court in deciding when exhaustion should be excused.” Mich. Acad. of Family Physicians, 476 U.S. at 486.
*9 Finally, in this case, the purposes of administrative review would not be served by requiring exhaustion because Plaintiffs allege violations of a procedural right—that is, the right to a coverage determination process free from the allegedly unlawful Improvement Standard—for which they seek relief which is simply not available in the context of an individual claim for benefits in an administrative review. As Judge Cabranes explained in Fox: “It would be just as unrealistic in this case as it was in ... City of New York to expect that the Secretary would consider substantial changes in the current administrative review system at the behest of a single aid recipient ... in an adjudicatory context.” Fox, 656 F.Supp. at 1244 (internal quotation marks omitted); see also Sullivan, 906 F.2d at 918 (“Although exhaustion may have resulted in some individual members receiving benefits, the procedural right that the claimants sought to obtain, personalized determinations, could not have been vindicated by individual eligibility decisions.”).6

6

The court need not find irreparable injury in order to

conclude that waiver of exhaustion is appropriate. The

Secretary argues Plaintiffs’ claim of irreparable injury

is a mere allegation. Plaintiffs counter that they have

described “their serious chronic conditions, their

advanced ages in some instances, and their desperate

need for Medicare coverage of their health care.” (Doc.

32 at 18.) As the Ringer Court observed, the

“individual hardship resulting from delays in the

administrative process” must be “balanced against the

potential for overly casual or premature judicial

intervention in an administrative system that processes

literally millions of claims every year.” Ringer, 466

U.S. at 627. The record before the court is not sufficient

to properly perform this balancing test with regard to

the Individual Plaintiffs. The court thus leaves

unresolved whether the Individual Plaintiffs will suffer

irreparable injury if the court refuses to waive exhaustion of their administrative remedies.
For the foregoing reasons, the court concludes that the exhaustion requirement should be waived for Plaintiffs Boitano, Katz, and McGill. With the exhaustion requirement waived, § 405(g) provides the appropriate avenue for judicial review of the claims brought by all Individual Plaintiffs, with the exception of Ms. Masterman.
b. The Organizational Plaintiffs’ Claims Under § 405(g). Plaintiffs argue that the Organizational Plaintiffs “presented” their claims by writing letters to the Secretary complaining about the Improvement Standard. See Doc. 13 ¶¶ 92, 101, 109, 117, 124, 132, 141. They argue that the court should therefore waive exhaustion for the Organizational Plaintiffs for the same reasons supporting waiver for the Individual Plaintiffs.
In contrast, the Secretary contends that the Organizational Plaintiffs did not and cannot present their claims to the Secretary because the administrative review process is available only to program beneficiaries or their assignees, and the Organizational Plaintiffs are neither. At the same time, the Secretary point out that § 405(h) is the exclusive avenue of relief for the Organizational Plaintiffs and bars federal question jurisdiction under § 1331. The Secretary thus concludes the Organizational Plaintiffs’ claims must be dismissed under § 405(g).
The Medicare Act’s administrative appeals process is directed to appeals of unfavorable initial determinations. The right to appeal initial determinations denying or terminating coverage under Medicare Parts A, B, and C extends to beneficiaries and their assignees (usually the provider of services). See 42 C.F.R. §§ 405.710(a)-(b) (Part A); 405.801(b)(1) (Part B); 422.574(b) (Part C). These standards provide no mechanism for organizational plaintiffs to present their claims to the Secretary because they are neither beneficiaries nor assignees of beneficiaries, and they have not received an initial determination from which they can appeal. See Nat’l Athletic Trainers’ Ass’n v. HHS, 455 F.3d 500, 503–508 (5th Cir.2006) (“The parties agree that [the plaintiff association’s] member[ ] [athletic trainers] cannot obtain administrative review because they are neither beneficiaries nor providers[.]”).
*10 In Illinois Council, 529 U.S. at 5, the Court decided, 5 to 4, that an association is neither entitled to “present”
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claims to an administrative agency nor entitled to establish federal question jurisdiction under § 1331. In that case, an association of nursing homes brought suit against the Secretary, challenging certain regulations governing the imposition of sanctions and remedies upon nursing homes that were found to be deficient in certain respects. Id. at 6. The plaintiff argued that federal question jurisdiction should be allowed under § 1331 because requiring presentment and exhaustion of administrative remedies would effectively preclude judicial review of its claims. Id. at 20. The plaintiff pointed out that it could not access the administrative appeals process reserved for “an institution or agency dissatisfied with a determination by the Secretary,” 42 U.S.C. § 1395cc(h)(1) (governing appeals of determinations that a nursing home is noncompliant with the regulations), and therefore could not present a claim as required by § 405(g). Id. at 24. The Court rejected this argument, ruling that “[t]he [plaintiff] speaks only on behalf of its member institutions, and thus has standing only because of the injury those members allegedly suffer .... [i]t is essentially their rights to review that are at stake. And the statutes that create the special [administrative] review channel adequately protect those rights.” Id. (internal citations omitted). Thus, the Court reasoned that applying § 405(g) to claims brought by associations does not preclude judicial review of such claims, even though associations cannot themselves participate in administrative review. Instead, their claims must be presented and exhausted by the individual members on whose behalf the associations act.
The dissent in Illinois Council observed that the Court had not overruled Mich. Acad. of Family Physicians. The dissent contended that “Michigan Academy must have established a distinction between, on the one hand, a dispute over any particularized determination and, on the other hand, a challeng[e] to the validity of the Secretary’s instructions and regulations.” Id. at 1106–07 (quoting Mich. Acad., 476 U.S. at 680). It characterized the claims before the Court in a manner strikingly similar to the claims of the Organizational Plaintiffs here:
This case obviously falls into the latter category. Respondent in no way disputes any particularized determinations, but instead mounts a general challenge to the Secretary’s regulations (and manual) ... claiming that these were promulgated without notice and comment, are unconstitutionally vague, contravene the Medicare Act’s requirement of enforcement consistency, and violate due

process by affording insufficient administrative review. Like the Michigan Academy plaintiffs, who challenged the Secretary’s regulation concerning the payment of benefits for physician’s services ... respondent may proceed in District Court under general federal-question jurisdiction.

*11 Ill. Council, 529 U.S. at 38–39 (Thomas, J., dissenting). Justices Stevens, Kennedy, and Scalia joined in this portion of the dissent.

In this case, the Organizational Plaintiffs neither seek a fact dependent coverage determination nor a monetary recovery on their own behalf or on behalf of their members either now or in the future. Instead, they challenge the present and future use of the Improvement Standard in Medicare coverage determinations, which adversely impacts their members. According to the Illinois Council majority, none of these distinctions matter:

Despite the urging of the Council

and supporting amici, we cannot

distinguish Salfi and Ringer from

the case before us. Those cases

themselves foreclose distinctions

based upon the “potential future”

versus the “actual present” nature

of the claim, the “general legal”

versus the “fact-specific” nature of

the challenge, the “collateral”

versus “noncollateral” nature of the

issues, or the “declaratory” versus

“injunctive” nature of the relief

sought. Nor can we accept a

distinction that limits the scope of §

405(h) to claims for monetary

benefits. Claims for money, claims

for other benefits, claims of

program eligibility, and claims that

contest a sanction or remedy may

all similarly rest upon individual

fact-related circumstances, may all

similarly dispute agency policy

determinations, or may all similarly

involve

the

application,

interpretation, or constitutionality

of interrelated regulations or

statutory provisions. There is no

reason to distinguish among them

in terms of the language or in terms

of the purposes of § 405(h). Section

8

Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
1395ii’s blanket incorporation of that provision into the Medicare Act as a whole certainly contains no such distinction. Nor for similar reasons can we here limit provisions to claims that involve “amounts.”
Id. at 13–14.
Under Illinois Council, the Organizational Plaintiffs are also precluded from judicial review under § 1331 because “ § 405(g) contains the nonwaivable and nonexcusable requirement that an individual present a claim to the agency before raising it in court.” Ill. Council, 529 U.S. at 15; see also Your Home Visiting Nurse Servs., Inc. v. Shalala, 525 U.S. 449, 456 (1999) (“judicial review under the federal-question statute, 28 U.S.C. § 1331, is precluded by 42 U.S.C. § 405(h)”).
Plaintiffs nonetheless argue that Illinois Council allows “[t]he Association or its members [to] proceed ... through the special review channel that the Medicare statutes create[.]” (Doc. 32 at 29 (citing Ill. Council, 529 U.S. at 5 and supplying emphasis)). They assert that all they need to do to invoke § 405(g) jurisdiction is to present their claims to the Secretary, and they have done so. They urge the court to adopt the approach taken in Action Alliance of Senior Citizens v. Johnson, 607 F.Supp.2d 33 (D.D.C.2009). There, the district court found that the association plaintiffs had adequately “presented” their claims by mailing grievance letters to the Secretary, just as the Organizational Plaintiffs have done here. Id. at 38–40. On appeal, the D.C. Court of Appeals endorsed this approach, noting that the plaintiffs had “cured the jurisdictional defect” by properly presenting their claims to the Commissioner of Social Security. See Action Alliance of Senior Citizens v. Sebelius, 607 F.3d 860, 862 n.1 (D.C.Cir.2010). Thus far, no other Circuit has adopted this approach.
*12 Here, in the absence of guidance from the Supreme Court or, in the alternative, from the Second Circuit regarding how, if at all, an association may satisfy the non-waivable requirement of “presentment,” the court declines to adopt the Action Alliance approach. Illinois Council does not permit presentment or processing of an organization’s claims under § 405(g) even if this forecloses the organization from the administrative review process.7 It also precludes § 1331 jurisdiction for an organization’s claims arising under the Medicare Act. See Ill. Council, 529 U.S. at 15. In the absence of mandamus jurisdiction, Illinois Council thus leaves organizational plaintiffs with no means of obtaining judicial review of the Secretary’s Medicare practices and procedures even if

they “present” those challenges to the Secretary.

7

See Am. Chiropractic Ass’n, 431 F.3d at 817 (“The

Association’s objection that it could not itself become a

party to the administrative proceedings is an objection

the Supreme Court rejected in Illinois Council, 529

U.S. at 24.”).

2. 28 U.S.C. § 1361 Mandamus Jurisdiction. As an alternative to § 405(g) and § 1331, Plaintiffs argue that mandamus jurisdiction is available under 28 U.S.C. § 1361. The Secretary argues that the “extraordinary remedy” of mandamus jurisdiction is not appropriate in this case.
Pursuant to 28 U.S.C. § 1361, the “district courts shall have original jurisdiction of any action in the nature of mandamus to compel an officer or employee of the United States or any agency thereof to perform a duty owed to the plaintiff.” Mandamus “may be awarded only if the plaintiff proves that (1) there is a clear right to the relief sought; (2) the Government has a plainly defined and peremptory duty to perform the act in question; and (3) there is no other adequate remedy available.” Benzman v. Whitman, 523 F.3d 119, 132–33 (2d Cir.2008). Mandamus “is an extraordinary remedy, available only in extraordinary circumstances.” Aref v. United States, 452 F.3d 202, 206 (2d Cir.2006) (quoting In re United States, 10 F.3d 931, 933 (2d Cir.1993)).
Notwithstanding the high threshold for granting mandamus relief, mandamus jurisdiction over claims arising under the Medicare Act is not foreclosed as “it is settled in this and other circuits that, notwithstanding the sweeping language of section 405(h), mandamus jurisdiction is available under circumstances where the writ properly would issue.” City of New York, 742 F.2d at 739.
In considering the secret and unlawful policy alleged in City of New York, the Second Circuit explained that “[t]he first two conditions [of mandamus jurisdiction] are obviously satisfied” because the “[Social Security] Act and the regulations enacted thereunder establish both the right and the duty—claimants’ right to have eligibility determinations based on individualized assessments of residual functional capacity and the Secretary’s duty to make such assessments and base eligibility determinations upon them.” Id.; see also Ellis v. Blum, 643 F.2d 68, 78 (2d Cir.1981) (“An impressive array of cases in this and other circuits has established that § 1361 jurisdiction will lie to review procedures employed in administering social
9

Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
security benefits.”). Similarly here, the Medicare Act and the Secretary’s regulations afford beneficiaries the right have to coverage determinations based on their unique medical conditions, and the Secretary has the duty to make such assessments and base coverage determinations upon them, rather than relying on the alleged Improvement Standard.
*13 The Organizational Plaintiffs also satisfy the third requirement—that no other remedy be available—because neither § 405(g) nor § 1331 provides jurisdiction over their claims. The Second Circuit has recognized that plaintiffs who have not presented their claims to the Secretary may nonetheless invoke mandamus jurisdiction when it is otherwise appropriate, even though plaintiffs who have presented their claims but have failed to exhaust their administrative remedies cannot. See City of New York, 742 F.2d at 739 n.7 (“If the Supreme Court were to disagree with our ruling[ ] that class members are in compliance with the presentment ... requirement[ ] ... we believe mandamus jurisdiction would be available. However ... if § 405(g) jurisdiction” is unavailable because class members must exhaust their administrative remedies, “then mandamus jurisdiction would also be unavailable.”); Ellis, 643 F.2d at 77 n.10 (“Even if we were to find jurisdiction under § 405(g), we might still be obliged to consider the possibility of mandamus jurisdiction ... since § 405(g) would only furnish jurisdiction over those members of the alleged class who presented their claims to the Secretary.”).
Here, having concluded that the Organizational Plaintiffs have not and cannot present their claims to the Secretary and thereby satisfy the non-waivable requirement of § 405(g), and having further found that they are foreclosed from invoking federal court jurisdiction under § 1331, the court concludes that in the absence of mandamus jurisdiction, the Organizational Plaintiffs would have no other remedy. In such extraordinary circumstances, mandamus provides the only available avenue of relief.
As the Secretary points out, however, even when mandamus relief may be granted, it remains “governed by equitable considerations and is to be granted only in the exercise of sound discretion.” Whitehouse v. Ill. Cent. R.R. Co., 349 U.S. 366, 373 (1955). Further, when “exercising its equitable powers” in this case, the court “is bound to give serious weight to the obviously disruptive effect which the grant of ... relief ... [i]s likely to have on the administrative process.” Sampson v. Murray, 415 U.S. 61, 83 (1974). Based on the specific requests in Plaintiffs’ Prayer for Relief (e.g., “ordering defendant ... to review all adverse coverage decisions for the ... class members that rely on the Improvement Standard”; “ordering defendant ... to revise any rules, provisions, ... or other

written material ... that supports and/or applies the Improvement Standard”), the Secretary contends that Plaintiffs seek the sort of “wholesale improvement of the [Medicare] program” that must be completed, if at all, “in the offices of [HHS] or the halls of Congress, where programmatic improvements are normally made.” Lujan, 497 U.S. at 891. The Secretary also warns that awarding relief in this case could have costly consequences for the already cash-strapped Medicare program.
*14 Plaintiffs counter that they are asking only for the correct implementation of the Medicare program, not wholesale changes to the program. As City of New York explained in the context of § 405(g):
by ordering simply that the claims be reopened at the administrative level, the District Court showed proper respect for the administrative process. It did no more than the agency would have been called upon to do had it ... been alerted to the charge that an undisclosed procedure was illegal and had improperly resolved innumerable claims.
City of New York, 476 U.S. at 486; see also Fox, 656 F.Supp. at 1250 (explaining that ordering the Secretary “to ensure that Medicare coverage determinations are made on the basis of individual patient’s medical condition ... will entail no greater fiscal and administrative burdens for the government than are contemplated by the applicable law and regulations.”) (internal quotation marks omitted).
At the pleading stage, the court need not determine whether to grant a writ of mandamus, it need only determine whether, after an appropriate evidentiary showing and careful decision-making, a writ could issue. See Gulfstream Aerospace Corp. v. Mayacamas Corp., 485 U.S. 271, 289 (1988) (the party seeking mandamus has the “burden of showing that its right to issuance of the writ is clear and indisputable.”) (internal quotation marks and citation omitted). For purposes of surviving a motion to dismiss for lack of subject matter jurisdiction, Plaintiffs have sufficiently alleged mandamus jurisdiction pursuant to § 1361 over the claims of the Organizational Plaintiffs. The Secretary’s motion to dismiss the Organizational Plaintiffs’ claims for lack of subject matter jurisdiction under 28 U.S.C. § 1361 is hereby DENIED.
3. Dismissal for Lack of Standing: Plaintiffs Jimmo
10

Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
and K.R. The Secretary contends that although Plaintiffs Jimmo and K.R. may seek judicial review under 42 U.S.C. § 405(g) because they have exhausted their administrative remedies, they lack Article III standing to challenge the Improvement Standard. The Secretary alleges that both Ms. Jimmo and K.R. lack standing because they were denied Medicare coverage for reasons independent of the Improvement Standard, and thus the relief Plaintiffs seek will not redress Ms. Jimmo’s and K.R.’s injuries.
Under Article III of the Constitution, federal courts have jurisdiction only over “Cases” and “Controversies.” U.S. CONST. art. III, § 2, cl. 1. Standing “is an essential and unchanging part of the case-or-controversy requirement of Article III.” Lujan, 504 U.S. at 560. If Plaintiffs lack standing, then the court has no subject matter jurisdiction to hear their claims. See Carver v. City of New York, 621 F.3d 221, 225 (2d Cir.2010).
The “irreducible constitutional minimum of standing” contains three elements: (1) the plaintiff must have suffered injury in fact: an actual or imminent invasion of a legally protected, concrete and particularized interest; (2) there must be a causal connection between the alleged injury and the defendant’s conduct at issue; and (3) it must be “likely,” not “speculative,” that the court can redress the injury. Lujan, 504 U.S. at 560–61. However, where, as here, “plaintiffs allege injury resulting from violation of a procedural right afforded to them by statute and designed to protect their threatened concrete interest, the courts relax—while not wholly eliminating—the issues of imminence and redressability but not the issues of injury in fact or causation.” Ctr. for Law & Educ. v. Dep’t of Educ., 396 F.3d 1152, 1157 (D.C.Cir.2005).
*15 A plaintiff’s burden to establish the elements of standing “increases over the course of litigation.” Cacchillo v. Insmed, Inc., 638 F.3d 401, 404 (2d Cir.2011). At the pleading stage, plaintiffs need only allege facts that establish a plausible claim to standing. See Bldg. & Const. Trades Council of Buffalo, N.Y. and Vicinity v. Downtown Dev., Inc., 448 F.3d 138, 145 (2d Cir.2006) (“each element of standing ‘must be supported in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.’ ”) (quoting Lujan, 504 U.S. at 561).
The “relaxed redressability” requirement for plaintiffs alleging deprivation of procedural rights means that “a plaintiff need not show that better procedures would have led to a different substantive result.” Renal Physicians Ass’n v. United States Dep’t of HHS, 489 F.3d 1267, 1278 (D.C.Cir.2007). Nonetheless, a plaintiff must show that

better procedures could possibly lead to an administrative decision in his or her favor and must satisfy the causation element by showing that the agency relied on the alleged wrongful procedure in reaching the decision regarding which the plaintiff complains. See Sugar Cane Growers Co-op of Fla. v. Veneman, 289 F.3d 89, 94–95 (D.C.Cir.2002) (“A plaintiff who alleges a deprivation of a procedural protection ... [must] show that the procedural step was connected to the substantive result.”); Banks v. Sec’y of Ind. Family & Soc. Servs. Admin., 997 F.2d 231, 239 (7th Cir.1993) (“in order to have standing, the plaintiffs must also establish a ‘fairly traceable’ causal connection between the claimed injury and the challenged conduct of the defendant.”) (quoting Duke Power Co. v. Carolina Envtl. Study Grp., Inc., 438 U.S. 59, 72 (1978)).
In Ms. Jimmo’s case, the Secretary contends that in denying coverage, the ALJ concluded that the “wound care provided to [Ms. Jimmo] ... was not complex.” (Doc. 25–3 at 7.) The ALJ further explained that Ms. Jimmo did not require observation and assessment because she “was stable and seen for frequent follow-ups at her physician’s office for lesions and debridement. [Ms. Jimmo’s] condition did not significantly change[ ] during the period at issue and the plan of care did not undergo changes.” Id. On review, the MAC considered the administrative record and adopted the ALJ’s decision for the same reasons. (Doc. 25–2 at 7–8.) Accordingly, the Secretary contends that Ms. Jimmo cannot establish that the outcome would have been different in the absence of the alleged Improvement Standard. The Secretary further argues that Ms. Jimmo lacks standing because she has already received the care and has not been held liable for any non-covered charges. She disagrees that any injury may be found based upon the fact that Ms. Jimmo will be presumed to have knowledge that the denied services will not be covered in the future.
*16 The Secretary’s argument assumes that the outcome for Ms. Jimmo would have been the same without the alleged Improvement Standard, but Plaintiffs’ allegations support a contrary conclusion. The Amended Complaint alleges that in denying Ms. Jimmo coverage at the redetermination level, the Medicare contractor stated that Ms. Jimmo’s “condition was stable with no acute changes.” (Doc. 13 ¶ 50.) At the reconsideration level of review, the denial of coverage was grounded in part upon a conclusion that “[t]he likelihood of a change in the patient’s condition requiring skilled nursing services was not supported in the documentation.” (Id. ¶ 51.) The ALJ who reviewed the denial of coverage for Ms. Jimmo similarly concluded that “[o]bservation and assessment of the Beneficiary was not necessary as the Beneficiary was stable ... The Beneficiary’s condition did not significantly changes [sic] during the period at issue and the plan of
11

Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
care did not undergo changes.” (Id. ¶ 52.) Even the MAC decision, upon which the Secretary relies in challenging causation, found that Ms. Jimmo’s “condition ... [did not] change [ ] significantly during the period at issue.” (Id. ¶ 54.) It can only be assumed that the MAC would have denied coverage even without this conclusion. Moreover, had the lower level adjudicators not employed an alleged Improvement Standard, the outcome could have been different. Plaintiffs further contend that even if Ms. Jimmo was not held financially responsible for the denied services, she suffers a detriment as a result of that determination as it will affect claims for benefits by her in the future.
Ms. Jimmo has sufficiently alleged that she experienced a number of coverage determinations that were arguably tainted by an unlawful Improvement Standard, including the Secretary’s final decision. Moreover, the court cannot find, as a matter of law, that the outcome in Ms. Jimmo’s case would have been the same even if the alleged Improvement Standard had not been applied. Ms. Jimmo has thus alleged a “ ‘fairly traceable’ causal connection between the claimed injury and the challenged conduct” of the defendant. Duke Power Co., 438 U.S. at 72. The Secretary’s motion to dismiss Ms. Jimmo’s claims for lack of standing is therefore DENIED.
As for K.R., the Secretary contends she can no longer present a justiciable case-or-controversy because her claims are moot. After Plaintiffs filed the Amended Complaint, the MAC, in what constitutes the final decision of the Secretary, found that K.R. is not entitled to coverage because she was “not homebound” during the relevant time period. (Doc. 39–1 at 5.) Given this ruling, the Secretary argues that K.R. cannot show that any relief obtained in this case could potentially redress her injury. Plaintiffs argue that this conclusion is immaterial because “standing is determined by the plaintiff’s situation at the time that the Amended Complaint is filed.” (Doc. 49 at 3 n.2.) This is accurate, see Comer v. Cisneros, 37 F.3d 775, 787 (2d Cir.1994), but ignores the additional requirement that, “[i]n order to satisfy the case-or-controversy requirement [of Article III], a party must, at all stages of the litigation, have an actual injury which is likely to be redressed by a favorable judicial decision.” United States v. Blackburn, 461 F.3d 259, 261 (2d Cir.2006) (quoting United States v. Mercurris, 192 F.3d 290, 293 (2d Cir.1999)). The issue thus becomes one of mootness rather than standing after the Amended Complaint is filed. See Friends of the Earth, Inc. v. Laidlaw Envtl. Servs, (TOC), Inc., 528 U.S. 167, 180 (2000). Accordingly, “if an event occurs during the course of the proceedings or on appeal ‘that makes it impossible for the court to grant any effectual relief whatever to a prevailing party,’ [the court] must dismiss the case.”

United States v. Quattrone, 402 F.3d 304, 308 (2d Cir.2005) (quoting Church of Scientology v. United States, 506 U.S. 9, 12 (1992)).
*17 Here, if events subsequent to the Amended Complaint are considered, K.R. cannot establish that she suffered an injury-in-fact as a result of the alleged Improvement Standard or that the outcome would have been different had the Improvement Standard not been used. However, the parties have not adequately briefed whether, if it is demonstrated that the alleged Improvement Standard was in fact applied to K.R.’s coverage determinations, it would still be “impossible for the court to grant [her] any effectual relief whatever.” Quattrone, 402 F.3d at 308. In other words, the parties fail to address whether any relief remains available to K.R. even if her eligibility determination would not have been different. See Sugar Cane Growers, 289 F.3d at 94 (“A plaintiff who alleges a deprivation of a procedural protection to which he is entitled never has to prove that if he had received the procedure the substantive result would have been altered.”); see also Sullivan, 906 F.2d at 918 (“the procedural right that the claimants sought to obtain, personalized determinations, could not have been vindicated by individual eligibility decisions”); City of New York, 742 F.2d at 737 (the “procedural right, guaranteed by the Secretary’s regulations, cannot be vindicated by an ultimate determination of eligibility.”).
Because the Secretary has framed her request for dismissal of K.R .’s claims as one of standing, and because the court concludes that, at the time of the filing of the Amended Complaint, K.R. sufficiently alleged standing, the Secretary’s motion to dismiss K.R .’s claims for lack of standing is DENIED WITHOUT PREJUDICE TO RENEW ON THE GROUNDS OF MOOTNESS.8

8

In so ruling, the court does not foreclose the possibility

that other challenges by the Secretary may also be

renewed.

4. Dismissal for Lack of Standing to Seek Injunctive Relief. The Secretary next argues that the Individual Plaintiffs lack standing to pursue injunctive relief because they have not shown any likelihood that the Secretary will apply the Improvement Standard to their claims in the future. To seek prospective injunctive relief, a plaintiff must show either “continuing, present adverse effects” of the defendant’s unlawful conduct that could be redressed through injunctive relief, City of Los Angeles v. Lyons, 461 U.S. 95, 102 (1983), or “a sufficient likelihood that
12

Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
he will be affected by the allegedly unlawful conduct in the future.” Wooden v. Bd. of Regents of Univ. Sys. of Ga., 247 F.3d 1262, 1283 (11th Cir.2001). To demonstrate the likelihood of future harm, it is not enough that the plaintiff was harmed by the challenged conduct in the past; the plaintiff must instead show that he “is realistically threatened by a repetition of [the previous harm].” Lyons, 461 U.S. at 109; see also White v. First Am. Registry, 230 F.R.D. 365, 367 (S.D.N .Y.2005) (“[W]here, as here, a plaintiff challenges an allegedly wrongful policy, he or she must allege credibly a ‘realistic threat from the policy.’ ”) (quoting Friends of the Earth, 528 U.S. at 184).
*18 Courts agree that “when the threatened acts that will cause injury are ... part of a policy,” such as the Improvement Standard alleged in this case, “it is significantly more likely that the injury will occur again,” and the existence of an official policy therefore supports the plaintiff’s standing to pursue injunctive relief. 31 Foster Children v. Bush, 329 F.3d 1255, 1266 (11th Cir.2003); see also Shain v. Ellison, 356 F.3d 211, 216 (2d Cir.2004) (explaining that “the existence of an official policy” makes repeated harm more probable). At the pleadings stage, the Individual Plaintiffs have alleged sufficient facts to establish standing to pursue injunctive relief.
The Secretary’s motion to dismiss Plaintiffs’ claims for injunctive relief for lack of standing is hereby DENIED.

5. Dismissal of Organizational Plaintiffs’ Claims for Lack of Standing. Finally, the Secretary argues that at least six of the seven Organizational Plaintiffs lack standing because they have not sufficiently alleged that one of their members would have standing to bring these claims in his, her, or its own right. See Hunt v. Wash. State Apple Adver. Comm’n, 432 U.S. 333, 343 (1977) (“an association has standing to bring suit on behalf of its members when: (a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.”). Plaintiffs disagree, and argue that they have adequately alleged associational standing at the pleading stage, with the exception of one organization.9

9

At oral argument, Plaintiffs conceded that AAPM & R

could not independently assert standing, because it

makes no allegation that one of its members would

have standing to sue other than the conclusory

statement that “Members of AAPM & R would have standing to sue in their own right.” (Doc. 13 ¶ 123.) Based upon this admission, the court hereby GRANTS the Secretary’s motion to dismiss AAPM & R while GRANTING Plaintiffs leave to amend. See Fed.R.Civ.P. 15(a)(2) (instructing courts to “freely give leave [to amend the complaint] when justice so requires.”); Goldmark, Inc. v. Catlin Syndicate Ltd., 2011 WL 743568, at *5 (E.D.N.Y Feb. 24, 2011) (recognizing the “liberal spirit of Rule 15(a)” and granting plaintiff leave to amend the breach of contract claim in complaint to add claim of bad faith).
“Once a valid Article III case-or-controversy is present, the court’s jurisdiction vests. The presence of additional parties, although they alone could [not] independently ... satisfy Article Ill’s requirements, does not itself destroy jurisdiction already established.” Ruiz v. Estelle, 161 F.3d 814, 832 (5th Cir.1998). “In accordance with this principle, the Supreme Court has repeatedly held that if one party has standing in an action, a court need not reach the issue of the standing of other parties when it makes no difference to the merits of the case.” Ry. Labor Execs.’ Ass’n v. United States, 987 F.2d 806, 810 (D.C.Cir.1993) (citing Doe v. Bolton, 410 U.S. 179, 189 (1973)); see also Home v. Flores, 129 S.Ct. 2579, 2592–93 (2009) (“Because the superintendent clearly has standing to challenge the lower courts’ decisions, we need not consider whether the Legislators also have standing to do so.”). Here, the presence of the Organizational Plaintiffs has no effect on the merits of the Individual Plaintiffs’ claims. Accordingly, the court need not address whether they could each independently establish standing at the pleadings stage.
For the foregoing reasons, the Secretary’s Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction is GRANTED IN PART and DENIED IN PART. The court concludes that Plaintiffs have sufficiently alleged subject matter jurisdiction as to all of their claims, except for those of Ms. Masterman, which must be presented to the Secretary, and except for those of AAPM & R, for which Plaintiffs are granted leave to amend.
B. The Secretary’s Rule 12(b)(6) Motion to Dismiss for Failure to State a Claim. *19 The Secretary argues that the Amended Complaint fails to contain sufficient factual allegations to support a plausible claim for relief and therefore fails to satisfy Rule 8’s pleading requirement. See Fed.R.Civ.P. 8(a)(2) (“A pleading that states a claim for relief must contain ... a short and plain statement of the claim showing that the pleader is entitled to relief”). In particular, the Secretary
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Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)

contends that while all of Plaintiffs’ claims rely on the Secretary’s use of the alleged “Improvement Standard,” one cannot reasonably infer from the alleged facts that the Improvement Standard exists. According to the Secretary, this is true both because the Improvement Standard is inadequately defined, and because there are “obvious alternative” explanations for the complained of conduct that are far more plausible than a “clandestine” and “covert” policy. The Secretary further points out that its own regulations and policies, “while perhaps not using the exact term [,] effectively prohibit the use of a so-called ‘Improvement Standard’i.e., a standard that, as plaintiffs have characterized it, would require the denial of benefits in any case in which the treatment at issue is not expected to improve a beneficiary’s condition.” (Doc. 45 at 2.)
In response, Plaintiffs argue that the Improvement Standard’s existence is supported by three categories of factual information: (1) various Local Coverage Determinations (“LCD”) and provisions of the Medicare Benefit Policy Manual (“MBPM”) that suggest the use of the Improvement Standard; (2) prior judicial decisions in which courts have found that the Secretary employed something akin to the Improvement Standard; and (3) the written administrative decisions in each of the Individual Plaintiffs’ cases. In addition, Plaintiffs rhetorically question whether seven national organizations that assist Medicare beneficiaries allegedly subject to the Improvement Standard would have joined the lawsuit if the Improvement Standard did not exist. See Doc. 32 at 37 (“Is the Secretary suggesting that these large and respected organizations are dissembling about the policy and its impact on their members and others whom they serve?”).10

10

The court does not address this claim further as it

substitutes speculation for facts.

To survive a motion to dismiss under Rule 12(b)(6), the Amended Complaint “must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ “ Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also Fed.R.Civ.P. 8(a)(2). In Iqbal, the Supreme Court set forth a “two-pronged” approach for analyzing a Rule 12(b)(6) motion to dismiss. Iqbal, 129 S.Ct. at 1950. First, a court must accept a plaintiff’s factual allegations as true and draw all reasonable inferences from those allegations in the plaintiff’s favor. Id. at 1949–50. However, this assumption of truth does not apply to legal conclusions, and “[t]hreadbare recitals of the elements of a cause of

action, supported by mere conclusory statements, do not suffice.” Id. at 1949. Second, a court must determine whether the Amended Complaint’s “well-pleaded factual allegations ... plausibly give rise to an entitlement to relief.” Id. at 1950. Neither Iqbal nor Twombly impose “heightened” pleading standards. See Arista Records, LLC v. Doe 3, 604 F.3d 110, 119–21 (2d Cir.2010) (rejecting a “heightened pleading standard” under Iqbal/Twombly and also rejecting the “contention that Twombly and Iqbal require the pleading of specific evidence or extra facts beyond what is needed to make the claim plausible.”).
*20 “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 556–57). “The plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id.
In considering whether the alleged facts “nudge” the plaintiffs’ claims from merely “speculative” to “plausible,” courts are instructed to rely on common sense, and to consider “obvious alternative explanations” to the plaintiffs’ theory of liability. See Twombly, 550 U.S. at 567. However, the courts are not empowered to weigh the evidence, assess credibility, and choose the explanation they believe is most worthy of belief. See Chao v. Ballista, 630 F.Supp.2d 170, 177 (D.Mass.2009) (“[A] complaint should only be dismissed at the pleading stage where the allegations are so broad, and the alternative explanations are so overwhelming, that the claims no longer appear plausible.”); see also Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.1985) (when faced with a motion to dismiss for failure to state a claim, the court’s task is “not to weigh the evidence that might be presented at trial but merely to determine whether the complaint itself is legally sufficient.”).
Here, in seeking dismissal, the Secretary relies heavily on regulations and policies which forbid the application of anything resembling the Improvement Standard. See 42 C.F.R. § 409.44(a) (explaining that, under the home health benefit, Medicare coverage of skilled services is based on the “unique medical condition of the individual beneficiary”); MBPM, Ch. 7, § 20.3 (prohibiting the use of utilization screens or “rules of thumb” to make coverage decisions); 42 C.F.R. § 409.44(b)(3)(iii) (providing that the determination of whether a skilled service is reasonable and necessary “must be based solely upon the beneficiary’s unique condition and individual needs, without regard to whether the illness or injury is acute, chronic, terminal, or expected to last a long time”); 42 C.F.R. § 409.32(c) (“Even if full recovery or medical
14

Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)

improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities.”); Home Health Prospective Payment System Rate Update for Calendar Year 2011, 75 Fed.Reg. 70372, 70395 (Nov. 17, 2010) (“ ‘Rules of thumb’ in the Medicare medical review process are prohibited.... Medical denial decisions must be based on a detailed and thorough analysis of the beneficiary’s total condition and individual need for care.”). Plaintiffs acknowledge the existence of those regulations and policies and do not question their validity, but argue that the Improvement Standard demonstrates they are being ignored. The facts they cite in support of the Improvement Standard’s existence are decidedly scant.

*21 For example, Plaintiffs cite LCD 23604 and 28290 as evidence of the Improvement Standard because, under the heading “Indications,” it notes that “[t]here must be an expectation that the condition ... will improve significantly within a reasonable and generally predictable period of time [,]” and under “Limitations” it states that “[p]hysical therapy is not covered when the documentation indicates that a patient has attained the therapy goals or has reached the point where no further significant practical improvement can be expected.” Id. The Secretary, however, points out that this same LCD also states that the “design of a maintenance regimen/[home exercise plan] required to delay or minimize muscular and functional deterioration in patients suffering from a chronic disease may be considered reasonable and necessary [.]” Further, under “Maintenance Therapy,” the LCD states that “[w]here repetitive services that are required to maintain function involve the use of complex and sophisticated procedures, the judgment and skill of a physical therapist might be required for the safe and effective rendition of such services. If the judgment and skill of a physical therapist is required to safely and effectively treat the illness or injury, the services may be covered as physical therapy services.” Id. Thus, LCD 23604 does not, alone, establish an Improvement Standard.
Plaintiffs cite LCD 340 as evidence of the Improvement Standard because it provides for coverage when the “documentation supports the expectation that the beneficiary’s condition will improve significantly in a reasonable and generally predictable period of time.” Id. In the same paragraph, however, the LCD explains that coverage also applies when the services are “necessary for the establishment of a safe and effective maintenance program required in connection with a specific disease state.” Id.; see also 42 C.F.R. § 409.44(c)(2)(iii)(A)-(C).11

11

In their Opposition, Plaintiffs cite two additional LCDs,

but neither appears to provide a basis to infer that the Improvement Standard exists. LCD 31530, which concerns occupational therapy, states that “[i]f the services required to maintain function involve the use of complex and sophisticated therapy procedures, the judgment and skill of a therapist may be necessary for the safe and effective delivery of such services.” Id. LCD 28290, under the heading “Therapy for patients with symptoms from chronic disease,” explains that Medicare covers the “design of a home therapy regimen required to delay or minimize muscular and functional deterioration in patients suffering from chronic disease.” Id. Plaintiffs’ MBPM citations, none of which are referenced in the Amended Complaint, fare no better. They do not establish an Improvement Standard and qualify any statement that appears to deny coverage merely because a condition is chronic or stable.
On balance, the LCDs and MBPMs, regarded in the light most favorable to Plaintiffs, do not provide sufficient factual support for Plaintiffs’ allegations that an Improvement Standard is being used for the denial of Medicare coverage. This is hardly surprising, as Plaintiffs further allege that the Secretary’s tacit endorsement of the Improvement Standard is both “covert” and “clandestine.” See Arista Records, LLC, 604 F.3d at 120 (“The Twombly plausibility standard ... does not prevent a plaintiff from pleading facts alleged upon information and belief where the facts are peculiarly within the possession and control of the defendant[.]”) (internal quotation marks and citations omitted).
Plaintiffs further claim that the Improvement Standard “is apparent from the district court decisions that have repeatedly rejected the Improvement Standard over the years.” (Doc. 32 at 36) (citing Anderson v. Sebelius, 2010 WL 4273238 (D.Vt. Oct. 25, 2010); Papciak v. Sebelius, 742 F.Supp.2d 765 (W.D.Pa.2010); Folland v. Sullivan, 1992 WL 295230 (D.Vt. Sept. 1, 1992); Fox, 656 F.Supp. 1236; Rizzi v. Shalala, 1994 WL 686630 (D.Conn. Sept. 29, 1994)). As an initial matter, Plaintiffs fail to explain why, in the absence of judicial notice, it would be appropriate for the court to consider such cases as factual allegations on a Rule 12(b)(6) motion to dismiss, particularly when the Amended Complaint does not mention them. At best, these cases support Plaintiffs’ argument that their allegation of an Improvement Standard is neither fanciful, fantastic, nor delusional. See Gallop v. Cheney, 642 F.3d 364, 368 (2d Cir.2011) (dismissal of complaint was appropriate where “sufficiently well-pleaded facts are clearly baseless-that is, if they are fanciful, fantastic, or delusional.”) (internal quotation marks omitted).
*22 In any event, the court rejects Plaintiffs’ invitation to
15

Jimmo v. Sebelius, Not Reported in F.Supp.2d (2011)
look elsewhere for evidence of the Improvement Standard and focuses instead on the allegations of the Amended Complaint. With regard to each Individual Plaintiff, the Amended Complaint cites Agency decisions that are arguably consistent with the imposition of an Improvement Standard because adjudicators denied coverage based upon, inter alia, a conclusion that the beneficiary’s condition would not improve.
The Secretary counters that the similarities between these Agency decisions are more obviously explained as legal errors in the application of valid regulations than the product of a nationwide covert policy to deny Medicare coverage on an unlawful basis. See Bowen v. Yuckert, 482 U.S. 137, 157 (1987) (explaining that the “Secretary faces an administrative task of staggering proportions in applying” the Social Security Act to process all disability benefits claims, and “[p]erfection in processing millions of such claims annually is impossible.”); Mercer v. Birchman, 700 F.2d 828, 835 (2d Cir.1983) (“[i]t has never been expected that” a “vast” claims-processing department of government “can achieve absolute procedural perfection.”). The Secretary argues that the court must consider this obvious alternative basis and find Plaintiffs’ claim implausible in the face of more likely and reasonable explanations. However, “[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and that a recovery is very remote and unlikely .” Starr v. Sony BMG Music Entm’t, 592 F.3d 314, 322 (2d Cir.2010).
Applying the Iqbal/Twombley standard for a motion to dismiss under Rule 12(b)(6), the court cannot conclude as a matter of law that Plaintiffs’ Improvement Standard theory is factually implausible when it is supported by at least some evidence in each of the Individual Plaintiffs’ cases and where other plaintiffs have successfully demonstrated the use of illegal presumptions and rules of thumb much like Plaintiffs allege here. “Asking for plausible grounds to infer [application of the Improvement Standard] does not impose a probability requirement at the pleading stage; it simply calls for enough fact to raise a reasonable expectation that discovery will reveal evidence of [the Improvement Standard’s existence].” Twombly, 550 U.S. at 556; see also Price v. N.Y. State Bd. of Elections, 540 F.3d 101, 107 (2d Cir.2008) (dismissal is warranted only “if the facts as alleged are insufficient to raise a right to relief above the speculative level.”) (internal quotation marks omitted). The Amended Complaint contains factual

allegations beyond mere “labels and conclusions” coupled

with a “formulaic recitation of the elements of a cause of

action[,]” Twombly, 550 U.S. at 555, and “more than an

unadorned,

the-defendant-unlawfully-harmed-me

accusation.” Iqbal, 129 S.Ct. at 1949. Accordingly, at

least with regard to the named Plaintiffs, the Amended

Complaint states a claim for relief under Fed.R.Civ.P. 8.12

The Secretary’s motion to dismiss for failure to allege a

plausible claim of relief is therefore DENIED.13

12

The court expresses no opinion regarding whether it

would reach this same conclusion on a class wide basis.

13

In a relatively cursory manner (Doc. 25–1 at 54–59),

the Secretary also seeks dismissal of Plaintiffs’ claims

for failure to state a claim, arguing both the merits of

Plaintiffs’ claims and Plaintiffs’ failure to demonstrate

a sufficient legal basis for them. See, e.g., Doc. 25–1 at

54 (“Plaintiffs’ claims that alleged application of an

‘Improvement Standard’ violates the Due Process

Clause of the Fifth Amendment ... are meritless.”); at

55 (“In any event, the procedures available to plaintiffs

comport with due process requirements.”); at 58

(arguing Improvement Standard, if it existed, would not

require notice and comment for its promulgation); at 59

(arguing the Freedom of Information Act would not

require the Federal Register to publish the

Improvement Standard). In an equally cursory manner,

Plaintiffs oppose dismissal. See Doc. 32 at 40–45. In

the Secretary’s Reply and the Plaintiffs’ Surreply, the

parties do not further pursue their arguments, nor did

they adequately address them at oral argument. The

court thus declines to address these alleged grounds for

dismissal at this time without finding that dismissal has

been waived. See Ibarra v. City of Chicago, 2011 WL

4583785, at *8 (N.D.Ill. Sept. 28, 2011) (“Given the

complexity of the legal issues, the parties’ cursory

treatment of the issues, and the current stage of the

litigation, the Court declines to dismiss Count II at this

time.”); see also Allstate Ins. Co. v. Heil, 2007 WL

4270355, at *2 n.2 (D.Haw. Dec. 6, 2007) (“Because

the parties have not briefed the Rule 702 issue in

anything more than a cursory way as part of their

summary judgment arguments, the court declines to

resolve the expert admissibility issues on the record

before it.”).

*23 SO ORDERED.

16

 
 Case 5:11-cv-00017-cr Document 4 Filed 01/18/11 Page 1 of 4

UNITED STATES DISTRICT COURT DISTRICT OF VERMONT

2U! I JAN 18 Pt1 12: 06

)

GLENDA JIMMO, KR by her guardian

)

KENNETH ROBERTS, MIRIAM KATZ,

)

EDITH MASTERMAN, MARY PATRICIA

)

BOITANO, NATIONAL COMMITTEE TO

)

PRESERVE SOCIAL SECURITY AND

)

MEDICARE, NATIONAL MULTIPLE

)

SCLEROSIS SOCIETY, PARKINSON'S

)

ACTION NETWORK, PARALYZED

)

VETERANS OF AMERICA, and AMERICAN )

ACADEMY OF PHYSICAL MEDICINE AND )

REHABILITATION, on behalf of themselves

)

and all others similarly situated,

)

)

)

Plaintiffs,

)

)

vs.

)

)

)

KATHLEEN SEBELIUS, Secretary of

)

Health and Human Services,

)

)

Defendant.

)

)

Civil Action No. 5~ \l-(V - l7

MOTION FOR CLASS CERTIFICATION AND APPOINTMENT OF CLASS COUNSEL
Pursuant to Rule 23(a) and (b)(2) of the Federal Rules of Civil Procedure, all plaintiffs move that the Court certify this case to proceed as a class action. The class is defined as follows:
All beneficiaries of Medicare Parts A, B, or C who have had or will have coverage for health care or therapy services, as an outpatient, in a hospital, in a skilled nursing facility, or in a home health care setting,

Case 5:11-cv-00017-cr Document 4 Filed 01/18/11 Page 2 of 4
denied, terminated, or reduced due to the application of the Improvement Standard, on or after January 1, 2006. Furthermore, pursuant to Rule 23(g), plaintiffs move that their counsel, Gill Deford, Judith A. Stein, Margaret Murphy, Wey-Wey Kwok, Nancy V. Gifford, Toby Edelman, Michael Benvenuto, and Devon Green be appointed class counsel. Plaintiffs base this motion upon the Complaint, the accompanying Memorandum of Points and Authorities in Support of Class Certification and Appointment of Class Counsel, and the other papers and pleadings filed in this action. Plaintiffs' counsel have not been able to obtain the Defendant's agreement that the class should be certified, because, due to the simultaneous filing of this Motion and the Complaint, they do not know who will be representing the Defendant. Based on past experience in cases involving the Medicare program, however, plaintiffs' counsel believe it is highly unlikely that Defendant would agree to class certification.

DATED: January 13,2011

Respectfully submitted,

Gill Deford Judith A. Stein Margaret Murphy Wey-Wey Kwok Nancy V. Gifford Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 (860) 456-7790

2

Case 5:11-cv-00017-cr Document 4 Filed 01/18/11 Page 3 of 4 Toby S. Edelman Center for Medicare Advocacy, Inc. 1025 Connecticut Ave., N.W., Suite 709 Washington, D.C. 20036 (202) 293-5760 Michael Benvenuto Devon Green Medicare Advocacy Project Vermont Legal Aid, Inc. P.O. Box 1367 Burlington, VT 05402 (802) 863-5620 Attorneys for Plaintiffs
3

Case 5:11-cv-00017-cr Document 4 Filed 01/18/11 Page 4 of 4 CERTIFICATE OF SERVICE
This is to certify that, on January 18, 2011, I caused to be mailed, by first class, postage prepaid mail, Motion for Class Certification and Appointment of Class Counsel, and Memorandum in Support of Motion for Class Certification and Appointment of Class Counsel, to:
Attorney General ofthe United States United States Department of Justice 950 Pennsylvania Ave., N.W. Washington, D.C. 20530-0001 United States Attorney for the District of Vermont U.S. Attorney's Office 11 Elmwood Avenue, 3rd Floor Burlington, VT 05402-0570
Michael Benvenuto Vermont Legal Aid, Inc.
4

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 1 of 25

.~,~ [HS··i lC

,'0

'; F fSTKleT i~) F YF ~,; :

~.~

r~~

UNITED STATES DISTRICT COURT DISTRICT OF VERMONT

lui! Jf,/I! 18 PH 12: 07

)

GLENDA JIMMO, KR by her guardian

)

KENNETH ROBERTS, MIRIAM KATZ,

)

EDITH MASTERMAN, MARY PATRICIA

)

BOITANO, NATIONAL COMMITTEE TO

)

PRESERVE SOCIAL SECURITY AND

)

MEDICARE, NATIONAL MULTIPLE

)

SCLEROSIS SOCIETY, PARKINSON'S

)

ACTION NETWORK, PARALYZED

)

VETERANS OF AMERICA, and AMERICAN )

ACADEMY OF PHYSICAL MEDICINE AND )

REHABILITATION, on behalf of themselves

)

and all others similarly situated,

)

)

)

Plaintiffs,

)

)

vs.

)

)

)

KATHLEEN SEBELIUS, Secretary of

)

Health and Human Services,

)

)

Defendant.

)

)

Civil Action No. '5: \l-C V -If

MEMORANDUM IN SUPPORT OF MOTION FOR CLASS CERTIFICATION AND APPOINTMENT OF
CLASS COUNSEL

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 2 of 25
I. INTRODUCTION In this case plaintiffs challenge an illegal condition of coverage employed by the defendant Secretary of Health & Human Services (the Secretary) in her administration of the Medicare program, which provides health insurance for 47 million Americans. As a covert rule of thumb that also deprives most affected beneficiaries of the right to review, the Improvement Standard causes termination, reduction, or denial of coverage for thousands of Medicare beneficiaries annually, of whom many have chronic diseases and can least afford the loss of care and services. This largely clandestine policy, which has been implemented without notice-and-comment rulemaking, has no support in the Medicare statute, is directly contradicted by the implementing regulations, and has been repeatedly repudiated by court decisions, none of which the government has appealed. Different terms are employed in applying the Improvement Standard. These include that the beneficiary needs "maintenance services only," has "plateaued," or is "chronic," "stable," or "not improving." All have the same meaning and impact, however: that the beneficiary is not getting better as a consequence of the care or services at issue and therefore is not entitled to coverage for skilled care. Although federal regulations preclude application of such a standard, employees ofthe decision-making entities, especially at the lower levels of the Medicare administrative review process, heed carefully to the phraseology that effects the Improvement Standard. Furthermore, because the Standard is recited as Medicare policy and its application appears to be "correct," most beneficiaries do not even attempt to seek review at a higher level. The named plaintiffs are Medicare beneficiaries who have had coverage terminated or denied due to application of the Improvement Standard and

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 3 of 25
organizations that assist their members and others who are subject to the Standard. They seek declaratory and injunctive relief to correct this policy, contending that it is prohibited by the Medicare statute, the Administrative Procedure Act (APA), the Freedom of Information Act, and the Due Process Clause. Because it is applicable to beneficiaries around the country, they seek to represent a nationwide class of Medicare beneficiaries who have suffered or will suffer from the application of the Improvement Standard. Specifically, they request certification of a class defined as:
All beneficiaries of Medicare Parts A, B, or C who have had or will have coverage for health care or therapy services, as an outpatient, in a hospital, in a skilled nursing facility, or in a home health care setting, denied, terminated, or reduced due to the application of the Improvement Standard, on or after January 1,2006. I. LEGAL AND FACTUAL BACKGROUND OF THE CASE
A. Medicare and its coverage rules. Medicare, which is codified as Title XVIII of the Social Security Act, is the federally funded and administered program of health insurance for those who are 65 and over or are disabled. Under Part A of Medicare, for which eligibility is automatic for recipients of Social Security old age and disability benefits (Title II of the Social Security Act), beneficiaries are entitled to coverage for hospital, extended care (nursing homes), home health, and hospice services. 42 U.S.C. § 1395d(a). Part B of Medicare establishes a voluntary program of supplemental medical insurance providing outpatient coverage of physicians, nurse practitioners, home health, physical, speech and occupational therapy, diagnostic services, and durable medical equipment. ld., § 1395k(a). Under Part C (the Medicare Advantage program), beneficiaries may opt to enroll in a managed care plan in lieu of the traditional fee-for-service approach provided
2

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 4 of 25
inPartsAandB. Jd., § 1395w-21(a).! The threshold for Medicare coverage is codified in its medical necessity
requirement, which states that no payment may be made ... for any expenses incurred for items or services which ... are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.
42 U.S.C. § 1395y(a)(1)(A). In other words, full coverage must flow when the service is reasonable and necessary. Hays v. Sebelius, 589 F.3d 1279, 1283 (D.C. Cir. 2009).
Except for the discrete and limited reference in subsection 1395y(a)(1)(A) to "improv[ing] the functioning of a malformed body member," the Medicare statute nowhere establishes or refers to improvement as a condition of coverage. Indeed, the regulations state just the opposite. Thus, for coverage of skilled nursing care,
[t]he restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities. 42 C.F.R. § 409.32(c); see also id., § 409.44(b)(1) (incorporating that standard for home health care coverage). The home health care regulations emphasize that the "reasonable and necessary" determination depends on "the unique medical condition of the individual beneficiary," id., § 409.44(a), and expressly preclude consideration of "whether the illness or injury is acute, chronic, terminal, or expected to last a long time." Jd., § 409.44(b)(3)(iii). And, with respect to physical, speech, and occupational therapy in the home health context, the regulations are framed in the alternative, with improvement
! The fourth part of Medicare, Part D, provides for coverage of prescription drugs through private insurance plans. See 42 U.S.C. § 1395w-101 et seq. The Improvement Standard is not implicated in Part D.
3

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 5 of 25
being only one of three possible grounds for coverage. !d., § 409.44(c)(2)(iii). Furthermore, the Medicare Benefit Policy Manual (MBPM) emphasizes the need for assessing the totality of the individual's need for care, expressly precluding reliance on "rules of thumb." 10M 100-02, MBPM, ch. 7, §§ 20.3,40.2,40.1.1. Just two months ago, CMS reiterated and emphasized this point:
"Rules of thumb" in the Medicare medical review process are prohibited .... Any "rules of thumb" that would declare a claim not covered solely on the basis of such elements, such as, lack of restoration potential ... or degree of stability, is [sic] unacceptable without individual review of all pertinent facts to determine if coverage may be justified. 75 F.R. 70372, 70395 (Nov. 17,2010). B. The administrative review process and application of the
Improvement Standard. Medicare administrative review is a multi-step process. For Parts A and B, it includes an opinion from the provider that Medicare will not or will no longer authorize coverage of the care or services at issue, an "initial determination" from the Medicare administrative contractor, a redetermination either by the contractor or, if expedited review has been requested, by a separate entity called the Quality Improvement Organization (QIO), reconsideration by the Qualified Independent Contractor (QIC), de novo review by an administrative law judge (ALJ), and on-the-record review by the Medicare Appeals Council (MAC). The process is largely the same for Part C claims, but with slightly different terminology and with the reconsideration determination made by an external organization known as the Independent Review Entity (IRE). As a general rule (though with important exceptions), failure to timely seek review at the next step in the sequence terminates the beneficiary's right to seek further administrative or judicial review. This is so despite the fact that, under Parts A and B,
4

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 6 of 25
beneficiaries may only proceed through the administrative process after they have received the care or services at issue and obligated themselves to pay for it. That is, a Part A or B beneficiary cannot obtain an advisory coverage decision. See, e.g., Heckler v. Ringer, 466 U.S. 602, 621 (1984).
Despite the regulatory prohibition against a policy like the Improvement Standard, lower level decision-makers - that is, employees of providers, contractors, Medicare Advantage plans, QICs, QIOs, and IREs -largely ignore the regulations. Following in-house directives and Local Coverage Determinations (LCDs), which are created by individual contractors to provide guidance in the jurisdictions in which they operate, they consistently deny coverage on the ground that the beneficiary has "plateaued" or is not improving. Provider reliance on the Improvement Standard can result in a beneficiary being unable to obtain the initial determination that provides the entree into the administrative process.
Even when beneficiaries do formally seek coverage, only a tiny percentage of those who are denied initially seek further review, see infra at 15, despite the greater likelihood of success at either the ALJ level, where LCDs are not binding, 42 C.F.R. § 405.1062(a), or upon judicial review.2 The overall rate of review by ALJs of Part A and B reconsiderations is under 38%.3 Given that cases involving the Improvement Standard
2 The courts have regularly rejected application of the Improvement Standard. See, e.g., Anderson v. Sebelius, 2010 WL 4273238 (D.Vt. 2010); Papciakv. Sebelius, --- F. Supp. 2d ---, 2010 WL 3885605 (W.D.Pa. 2010); Smith v. Shalala, 855 F.Supp. 658 (D.Vt. 1994); Rizzi v. Shalala, 1994 WL 686630 (D.Conn. 1994) (challenge to Improvement Standard claim rejected because Secretary's change to manual rendered claim moot); Folland v. Sullivan, 1992 WL 295230 (D.Vt. 1992); Fox v. Bowen, 656 F.Supp. 1236 (D.Conn. 1987).
3 In FY 2008, the number of Medicare claims taken to ALJs under all four Parts of Medicare was 185,665 in 36,585 appeals. Office of Medicare Hearings and Appeals
5

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 7 of 25
appear to involve the simple application of a rule to undisputed facts (rather than a dispute about the facts or application of the rule to those facts), it stands to reason that an even smaller percentage of those who are denied coverage because of the Improvement Standard seek ALJ review.
The bottom line is that the Improvement Standard has a twofold impact on beneficiaries. First, it denies them coverage to which they are entitled. Second, it discourages review to such an extent that beneficiaries are effectively deprived of the ability to obtain review. This case seeks to correct that situation.
C. The named plaintiffs' situations The individual plaintiffs The five individual plaintiffs have all been denied coverage because of application ofthe Improvement Standard. Glenda Jimmo, who is a resident of Bristol, Vermont and was 71 at the time of the coverage denial, suffers from serious medical problems, including diabetes and angina. As a consequence of these conditions, her physician prescribed intermittent skilled nursing and home health aide nursing services, but the defendant Secretary's Medicare contractor denied coverage for the home health services received from January 14,2007 to January 8, 2008, noting that "[h]er condition was stable with no acute changes." At the next level, the QIC affirmed on the basis of
website, at http://www.hhs.gov/omha/resources/index.html. The total claims figure for ALJ appeals (185,665) represents 38% of the Part A and B reconsideration decisions made in 2008 (482,989). See CMS, "Fact Sheet: Original Medicare (Fee-For-Service) Appeals Data - 2008," at http://www.cms.gov/OrgMedFFSAppeals/Downloads/Feeshet2008.pdf. Since the claims figure includes an unknown number of Parts C and D claims as well, the percentage of Parts A and B claims that are taken to the ALJ level is something less than 38%, probably considerably less.
6

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 8 of 25
similar reasoning: "The likelihood of a change in the patient's condition requiring skilled nursing services was not supported in the documentation." The ALl also applied the Improvement Standard: "Observation and assessment of the Beneficiary was not necessary as the Beneficiary was stable .... The Beneficiary's condition did not significantly changes [sic] during the period at issue and the plan of care did not undergo changes." The MAC affirmed the ALl and expressly adopted his conclusions. Complaint, ~~ 45 - 51.
Plaintiff KR, who lives in Bennington, Vermont, was, at the relevant time, 48 years old. She is severely disabled, suffering from congenital quadriplegia, patellofemoral syndrome, and epilepsy; she also has significant cognitive impairments, including mental retardation. She needs either a wheelchair or a walker to get around, and requires assistance from others when she goes outside. Accordingly, her physician ordered skilled physical therapy beginning September 26, 2008, but her claim for coverage of this therapy was denied at both the initial and redetermination levels of review. On reconsideration, the QIC affirmed on the basis of the Improvement Standard, holding that the "submitted documentation did not support that the beneficiary had experienced an acute episode or exacerbation of chronic condition resulting in a complex functional deficit to warrant skilled therapy intervention." Her appeal to an ALl fared no better, as the ALl, in his decision of November 16,2010, parroted the classic Improvement Standard language as the basis for his holding: "The services must be provided with the expectation that the condition of the patient will improve materially in a reasonable and generally predictable period of time." As a consequence of that application, he denied coverage because "[t]he submitted documentation does not support
7

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 9 of 25
that [KR] had experienced an acute episode or exacerbation of chronic condition resulting in a complex functional deficit to warrant skilled intervention." KR appealed that decision to the MAC on December 22,2010. Complaint,,-r,-r 52-60.
After hospitalization for a high grade intestinal obstruction and metastatic cancer, David Katz, who was 90 years old and a resident of Bloomfield, Connecticut when he died, went to a skilled nursing facility. Although the first part of his stay there was covered, his wife Miriam Katz, who was named as the executor in his will, was notified on November 26,2010 that coverage for his SNF stay would end effective November 30. Expedited review resulted in denials from the QIO and then from the QIC on December 3, on the ground that the "care you are currently receiving is considered custodial and could be performed by unskilled aides, who are trained in maintenance care." Complaint, ,-r,-r 61-65.
Edith Masterman is 79 years old and lives in Wilton, Maine. She has been a paraplegic since she was injured in a farming accident over sixty years ago. She was receiving home health care, on her doctor's orders, because of pressure sores. After she returned home from a hospital and then a SNF because of the need for a skin graft to repair a sore, however, her home health care agency, which is the only Medicare-certified agency in the area, refused to provide further care, contending that "Medicare will not pay for a chronic problem." She now receives limited home health services through the Medicaid program. She also has to visit the wound care clinic on a weekly basis, which would not be necessary if she had the more comprehensive care that she previously received. Because her former home health agency has determined that she would not be covered for Medicare, she cannot gain access to the administrative review process and
8

Case 5:11-cv-00017-cr Document 4-1 Filed 01/18/11 Page 10 of 25
challenge the very policy that the agency is applying to her. Complaint, ~~ 66 - 74. Mary Patricia Boitano, who lives in Narragansett, Rhode Island, is 83 years old.
She is enrolled in United HealthCare's Part C Medicare Advantage program. After being hospitalized this past fall, she was transferred to a SNF, for which her care was originally covered by Medicare. United HealthCare denied Coverage after November 22,2010, however, and her fast-track appeal decision affirmed that denial because "[t]herapy services must ... be reasonable in relation to the expected improvement in your condition." A different skilled nursing facility to which she moved determined that she needed skilled care and therapy, but United HealthCare continued to contend that she was not entitled to Medicare coverage. At her own expense, however, she stayed at that SNF, receiving skilled care and therapy, until January 3, 2011, when she again had to be hospitalized. Complaint, ~~ 75 - 83.
The organization plaintiffs4 The five national organizations that are co-plaintiffs with the individual beneficiaries represent a cross-section of organizations that seek to assist Americans who have chronic illnesses and disabilities in obtaining coverage for their necessary treatment and care. They include an organization that represents Medicare beneficiaries, three organizations that advocate on behalf of individuals with specific chronic conditions, and the organization that represents the nation's physiatrists, who specialize in physical medicine and rehabilitation. All are devoted to the ending of the Improvement Standard 4 An organization may act as a class representative when its underlying purpose is to represent the interests of the class. See, e.g., Communities for Equity v. Michigan High School Athletic Ass'n, 192 F.R.D. 568, 573 (W.D.Mich. 1999); Nat 'I Org.for Women, Inc. v. Scheidler, 172 F.R.D. 351,362 (N.D.Ill. 1997); Upper Valley Ass 'nfor Handicapped Citizens v. Mills, 168 F.R.D. 167, 171 (D.Vt. 1996); Mass. Ass 'n ofOlder Americans v. Spirito, 92 F.R.D. 129, 135 (D.Mass. 1981).
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with the goal of guaranteeing the right to Medicare coverage for those whom the organizations serve and seek to protect.
The National Committee to Preserve Social Security and Medicare (the National Committee) has 3.2 million members and supporters throughout the country, almost all of whom are Medicare beneficiaries. As its full name indicates, the National Committee is focused in large part on protecting the Medicare program and making it work for its members and other beneficiaries. Complaint, ~~ 84 - 90.
The National Multiple Sclerosis Society (MS Society) has a 50-state network of chapters that work with the national office to provide care and support for those suffering from multiple sclerosis. The Medicare program is one of the MS Society's four key points of focus, and many of the people whom it serves are Medicare beneficiaries. Complaint, ~~ 91- 99.
The Parkinson's Action Network (PAN) works with other Parkinson's organizations and its grassroots network of advocates throughout the country to improve the lives of those with Parkinson's disease. One crucial aspect of PAN's effort is to ensure that those with the disease receive the benefits to which they are entitled, including Medicare. Complaint, ~~ 100 - 107.
The Paralyzed Veterans of America (PVA) is a nationwide, congressionally chartered organization that assists veterans who have spinal chord injury or dysfunction. Obtaining quality health care is a critical component of this effort. With thousands of its 20,000 members receiving Medicare, PVA is devoted to insuring that they obtain the coverage to which they are entitled. Complaint, ~~ 108 - 115.
The American Academy of Physical Medicine and Rehabilitation (AAPM&R)
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advocates on behalf of its more than 7,500 members and has as its core purpose to enhance its members' ability to serve patients with temporary or permanent disabilities. As part of that purpose it advocates on public policy issues related to persons with disabling conditions, and ensuring that those patients receive Medicare coverage without interference from the Improvement Standard is a key focus of that advocacy. Complaint, ,-r,-r 116 -122.
III. SINCE THE NAMED PLAINTIFFS SATISFY THE REQUIREMENTS OF RULE 23(a) AND RULE 23(b)(2), THE CLASS SHOULD BE CERTIFIED. A. Introduction
Class actions are a significant and effective tool in the litigation process, for both courts and litigants, as they advance "the efficiency and economy of litigation which is a principal purpose of the procedure." General Telephone Co. ofSouthwest v. Falcon, 457 u.S. 147, 159 (1982); see also, e.g., Us. Parole Commission v. Geraghty, 445 U.S. 388, 402-403 (1980). Furthermore, in cases seeking to correct the improper administration of government benefit programs, they are particularly useful in securing effective relief to everyone harmed by the challenged practice. See, e.g., Matyasovszky v. Housing Authority ofCity ofBridgeport, 226 F.R.D. 35,40 (D.Conn. 2005) (quoting Newberg on Class Actions for propriety of class certification in cases brought by recipients of government benefits).
In another Social Security Act case, the Supreme Court stated over thirty years ago that
class relief for claims such as those presented ... in this case is peculiarly appropriate. The issues involved are common to the class as a whole. They tum on questions of law applicable in the same manner to each member of the class .... It is unlikely that differences in the factual background of each claim will affect
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the outcome of the legal issue. And the class-action device saves the resources of both the courts and the parties by permitting an issue potentially affecting every social security beneficiary to be litigated in an economical fashion under Rule 23.
Califano v. Yamasaki, 442 U.S. 682, 701 (1979). Writing for the Court, Chief Justice
Rehnquist repeated and approved the Yamasaki language: "[A]s the litigation history of
this case demonstrates, 'the class-action device save[d] the resources of both the courts
and the parties by permitting an issue potentially affecting every [class member] to be
litigated in an economical fashion. '" Gratz v. Bollinger, 539 U.S. 244, 268 n.17 (2003).
Accordingly, judges have not hesitated to employ the class certification device in Medicare cases that seek relief for classes of beneficiaries.5
Accepting the allegations in the complaint as true,6 and recognizing that "Rule 23
is given liberal rather than restrictive construction, and courts are to adopt a standard of
flexibility," Marisol A. v. Giuliani, 126 F.3d 372,377 (2d Cir. 1997) (quotation marks
and citation omitted), the Court should certify this case to proceed as a class action.
B. Plaintiffs meet the requirements of Rule 23(a).
The party seeking certification must satisfy "the four threshold requirements" set
out in Rule 23(a) and also must demonstrate that the action is maintainable under one of
5 See, e.g., Landers v. Leavitt, 232 F.R.D. 42 (D.Conn. 2005) (nationwide class certified in challenge to Medicare condition of coverage); Healey v. Shalala, No. 3:98CV00418 (DJS) (D.Conn., Nov. 19, 1998) (nationwide class certified in challenge to Secretary's failure to require home health agencies to provide procedural rights to beneficiaries, discussed in appeal of merits sub nom. Lutwin v. Thompson, 361 F.3d 146, 148 (2d Cir. 2004»; Grijalva v. Shalala, 946 F.3d 1115, 1118 (9th Cir. 1998) (nationwide class certified in due process challenge to Part C procedures), vacated in light of intervening legislation and decision, 526 U.S. 1096 (1999); Fox v. Bowen, 656 F.Supp. 1236, 1238 n. 2 (D.Conn. 1987) (statewide class certified in challenge to Secretary's application of Improvement Standard to Medicare beneficiaries).
6 See, e.g., Shelter Realty Corp. v. Allied Maintenance Corp., 574 F.2d 656,661 n.15 (2d Cir. 1978); Alleyne v. Time Moving & Storage Inc., 264 F.R.D. 41, 47 (E.D.N.Y. 2010); Matyasovszky, 226 F.R.D. at 39.
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the three subdivisions of Rule 23(b). Amchem Products, Inc. v. Windsor, 521 U.S. 591, 613 (1997); see also, e.g., Comer v. Cisneros, 37 F.3d 775, 796 (2d Cir. 1994); Brown v. City ofBarre, Vermont, 2010 WL 5141783 at *3 (D.Vt. 2010). The district court must determine that plaintiffs meet each of the requirements of Rule 23 by considering all the relevant evidence to establish whether the preponderance of the evidence standard is satisfied. 7 If the factors are satisfied, the Court must certify the class. Shady Grove Orthopedic Associates, P.A. v. Allstate Ins. Co., 130 S.Ct. 1431, 1437-38 (2010). In this case, as in similar challenges to the Secretary's policies in implementing Social Security Act benefit programs, the right to certification is easily demonstrated.
1. "Numerosity" or "impracticability": the size of the class and other factors demonstrate that joinder is impracticable.
The first factor is the impracticability ofjoinder. See, e.g., Comer, 37 F.3d at 796; In Re Drexel Burnham Lambert Group, Inc., 960 F.2d 285, 290 (2d Cir. 1992). Although this is frequently referred to as the "numerosity requirement," it is more properly subsumed under the rubric of "impracticability." See, e.g., Wright, Miller & Kane, 7A Federal Practice and Procedure, § 1762 at 171 (3d ed. 2005); Anderson v. Dept. ofPublic Welfare, 1 F.Supp.2d 456, 461 (E.D.Pa. 1998). Accordingly, the Second, Circuit has made clear that its resolution depends
on all the circumstances surrounding a case, not on mere numbers. Relevant considerations include judicial economy arising from the avoidance of a multiplicity of actions, geographic dispersion of class members, financial resources of class members, the ability of claimants to institute individual suits, and requests for prospective injunctive relief 7 See, e.g., Teamsters Local 445 Freight Div. Pension Fund v. Bombadier, Inc., 546 F.3d 196,202 (2d Cir. 2008); In re Pub. Offerings Sec. Litig., 471 F.3d 24, 41-42 (2d Cir. 2006); Brown, 2010 WL 5141783 at *3; Easterling v. Connecticut, 265 F.R.D. 45, 50 (D.Conn.2010).
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which would involve future class members. Robidoux v. Celani, 987 F.2d 931, 936 (2d Cir. 1993) (citations omitted); see also, e.g., Matyasovszky, 226 F.R.D. at 40; McGee v. Gold, 2006 WL 2975752 at *3 (D.Vt. 2006); Alba Conte and Herbert B. Newberg, 1 Newberg on Class Actions, § 3:6 at 249-253 (4th ed. 2002). Furthermore, "[i]mpracticable does not mean impossible." Robidoux, 987 F.2d at 935; Brown, 2010 WL 5141783 at *4.
In this case, the numbers alone are sufficient to resolve the matter. Although there is no magic number, see Petrolito v. Arrow Financial Services, LLC, 221 F.R.D. 303, 308-309 (D.Conn. 2004), "numerosity is presumed at a level of 40 members." Conso!. Rail Corp v. Town ofHyde Park, 47 F.3d 473,483 (2d Cir. 1995); see also, e.g., McGee, 2006 WL 2975752 at *2. Although there exists no known information specifically detailing how many decisions are based on the Improvement Standard, the available information indicates that the class has well over the forty members at which the presumption of impracticability adheres.
First, plaintiffs have alleged that the class is estimated to include "at least tens of thousands of members," Complaint, ~ 21, and unrefuted allegations may suffice to satisfy the standard. See, e.g., Haddock v. Nationwide Financial Services, 262 F.R.D. 97, 116 (D.Conn.2009). Moreover, this allegation is a reasonable one. In 2008, in Part A, 15.4 million claims were denied, and, of these, 265,000 were appealed to the redetermination level. Centers for Medicare & Medicaid Services, "Fact Sheet: Original Medicare (FeeFor-Service) Appeals Data - 2008," at 2 (available at http://www.cms.gov/OrgMedFFSAppeals/Downloads/factsheet2008.pdf).8 Of those
8 The Part B figures are available at the same website, but plaintiffs believe that Part
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denied at that stage, 76,051 Part A claims were appealed to the next level, reconsideration. Id. at 6.
Thus, at the three lowest levels of Part A decision-making - initial determination, redetermination, and reconsideration - there were, respectively, millions, hundreds of thousands, and tens of thousands of claims at issue in a year. Even if only 1% of these denials relied on the Improvement Standard, the numbers for the respective levels would be 154,000,2,650, and 760 in a year. In fact, though, because the 1% figure is unrealistically low, and because these numbers do not include claims denied under Parts Band C, the number of Medicare beneficiaries affected in a given year by the Improvement Standard must be considerably higher. In any event, it is clear that, at any given time, tens of thousands of Medicare beneficiaries have their Part A claims denied because of the Improvement Standard.
A "court may make common sense assumptions to support a finding of numerosity." Brown, 2010 WL 5141783 at *4 (citation and internal quotation marks omitted); see also, e.g., State ofConn. Office ofProtection and Advocacy for Persons with Disabilities v. State ofConnecticut, 706 F. Supp. 2d 266,287 (D.Conn. 2010) ("permissible for the plaintiffs to rely on reasonable inferences drawn from the available facts") (internal quotation marks and citation omitted). The available information demonstrates that the class is sufficiently large to preclude joinder as a practical possibility. See Robidoux, 987 F.2d at 935 (plaintiffs need not present "evidence of exact
A accounts for the great majority of the claims involving the Improvement Standard, and, accordingly, even though there are many more Part B claims and denials, plaintiffs will refer to the Part A claims to simplify the discussion. Plaintiffs have been unable to locate any comparable statistics for Part C claims.
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class size or identity of class members to satisfy the numerosity requirement"). On that basis alone, subsection 23(a)(1) is met.
In any event, though, the "other indicia of impracticability," Jordan v. County of Los Angeles, 669 F.2d 1311, 1319 (9th Cir.), vacated on other grounds, 459 U.S. 810 (1982), leave no doubt that the subsection is met. First, it would be extraordinarily inefficient to have numerous lawsuits on this issue, as they would all focus on the same point, the illegal application of the Improvement Standard. It would "serve judicial economy" to allow this case to proceed as a class action. Robidoux, 987 F.2d at 936. Second, the Secretary's determination not to allow her challenged policy to be corrected by individual cases illustrates the need for class certification. The government can continue to apply the standard, lose the occasional decision in an individual case, and not appeal, thereby insulating the policy from effective review. It would serve the interests ofjustice for this case to proceed as a class action. Accord, Brown, 2010 WL 5141783 at *6 (unknowable individuals in the future will benefit from a successful outcome and should be included in the numerosity analysis).
Third, the difficulty for individuals to bring suit or to join in this one is real. By definition, the class members are elderly and disabled and are physically in poor condition. Many, probably most, are not financially well off, thus making "individual suits difficult to pursue." Robidoux, 987 F.2d at 936. Furthermore, they reside throughout the country, thus further exacerbating the difficulty ofjoinder. Id. at 936 ("potential class members are distributed over the entire area of Vermont"). These practical impediments inherent in the membership of the class render it virtually impossible for most class members to file individual cases or otherwise to participate.
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Finally, as plaintiffs seek declaratory and injunctive relief for both present and future members of a class whose composition is constantly fluctuating, classwide relief is particularly appropriate. The numerosity requirement has generally been relaxed in that context. Robidoux, 987 F.2d at 936; Brown, 2010 WL 5141783 at *5.
The available information indicates that, at any given time, thousands of Medicare beneficiaries around the country are subject to the challenged policy. Numbers alone are sufficient to satisfy this first component of Rule 23(a)(l), but the other indicia of impracticability lend further support to that conclusion.
2. Rule 23(a)(2) and (3): Common questions of law and fact exist, and the claims of the named plaintiffs are typical of the claims of the class members.
The next two factors, commonality and typicality, tend to merge into one another, so that similar considerations animate analysis of Rules 23(a)(2) and (3). The crux of both requirements is to ensure that maintenance of a class action is economical and [that] the named plaintiff's claim and the class claims are so interrelated that the interests of the class members will be fairly and adequately protected in their absence.
Marisol A., 126 F.3d at 376 (citations and quotation marks omitted); see also Amchem Products, Inc., 521 U.S. at 626 n. 20. Moreover, when, as here, "a plaintiff seeks injunctive and declaratory relief, there is a presumption that both commonality and typicality are present." Brown, 2010 WL 5147183 at *6 (citation omitted).
"Courts have found that the test for commonality is not demanding ...." Raymond v. Rowland, 220 F.R.D. 173, 179 (D.Conn. 2004) (quotation marks and citation omitted). "The commonality requirement is met if plaintiffs' grievances share a common question oflaw or fact." Marisol A., 126 F.3d at 376 (citations omitted).
Rule 23(a)(2) requires only that common questions exist at the core of the
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cause of action alleged. Where the question of law involves standardized conduct of the defendant toward members of the proposed class ... the commonality requirement of Rule 23(a)(2) is usually met. Easterling, 265 F.R.D. at 52 (citations and internal quotation marks omitted). "Commonality is established so long as the plaintiffs can identify some unifying thread among the members' claims." Haddock, 262 F.R.D. at 116 (citations and internal quotation marks omitted). "Minor factual differences will not preclude class certification if there is a common question oflaw." State ofConn. Office for Protection and Advocacy for Persons with Disabilities, 706 F. Supp. 2d at 287 (citation omitted). In this case, as in others involving the failure of a government agency to meet its obligations, there can be little doubt that commonality is satisfied. As noted in a Second Circuit decision involving another benefit program, "the questions of law, which predominantly focus on whether the behavior of the defendants violated the [relevant statute and provisions] of the Constitution, are, by necessity, common to the class because they do not depend on the plaintiff-variable but on the defendants, who are a constant." Comer, 37 F.3d at 796-97. Here, there are common questions of both law and fact. The common questions of law are whether application of the Improvement Standard violates the Medicare statute and regulations, whether the policy has been carried out in violation of the APA, the Medicare statute's procedural requirements, and the Freedom ofInforrnation Act, and whether it runs afoul of the Due Process Clause. In the most basic sense, these are "common issue[s] the resolution of which will advance the litigation." Petrolito, 221 F.R.D. at 309 (quotation marks and citation omitted). The common question of fact is that all the class members are Medicare beneficiaries who are in need of health care and
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who have had their Medicare coverage denied or terminated by application of the Improvement Standard.
In short, "the lawsuit focuses on the behavior of the defendants and not that of the plaintiffs." Comer, 37 F.3d at 797. Commonality is easily met.
The "typicality requirement is satisfied when each class member's claim arises from the same course of events and each class member makes similar legal arguments to prove the defendant's liability." Robidoux, 987 F.2d at 936 (citations omitted); see also, e.g., Caridad v. Metro-North Commuter R.R., 191 F.3d 283, 293 (2d Cir. 1999); Marisol A., 126 F.3d at 376. "In government benefit class actions, the typicality requirement is generally satisfied when the representative plaintiff is subject to the same statute, regulation, or policy as class members." Matyasovszky, 226 F.R.D. at 42 (quotation marks and citation omitted). Again, this standard is easily satisfied, as the claims of the named plaintiffs and the class members all arise from the Secretary's policy of applying the Improvement Standard in the face of regulations to the contrary. Furthermore, the named plaintiffs and the class members are making the same arguments to demonstrate that the Secretary's policy is illegal.
"When it is alleged that the same unlawful conduct was directed at or affected both the named plaintiff and the class sought to be represented, the typicality requirement is usually met irrespective of minor variations in the fact patterns underlying individual claims." Robidoux, 987 F.2d at 936-937 (citations omitted). By proving their claims, the named plaintiffs will necessarily prove the class members' claims as well. Typicality is therefore met.
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3. Rule 23(a)(4): The named plaintiffs will protect the interests of the class.
The adequacy of representation requirement "is motivated by concerns similar to those driving the commonality and typicality requirement, namely, the efficiency and fairness of class certification." Marisol A., 126 F.3d at 378; see also Amchem Products, Inc., 521 U.S. at 626 n. 20 (adequacy of representation requirement tends to merge with the commonality and typicality requirements). The requirement
entails inquiry as to whether: 1) plaintiff's interests are antagonistic to the interest of other members of the class and 2) plaintiff's attorneys are qualified, experienced and able to conduct the litigation. The focus is on uncovering conflicts of interest between named parties and the class they seek to represent. In order to defeat a motion for certification, however, the conflict must be fundamental. In re Flag Telecom Holdings, Ltd. Securities Lit., 574 F.3d 29,35 (2d Cir. 2009) (citations and internal quotation marks omitted); see also, e.g., Marisol A., 126 F.3d at 378. With respect to the first prong, the named plaintiffs suffer from having the Improvement Standard applied to them just as it is and will be applied to the class members. They seek relief requiring the defendant to take corrective measures that would benefit the class members as well as the named plaintiffs. Accord, Marisol A., 126 F.3d at 378. "[B]ecause there are legal issues common to the class, the plaintiffs ... will be protecting the interests of the class by advancing their own legal interests in the case ...." Doe v. Bridgeport Police Dept., 198 F.R.D. 325, 333 CD.Conn. 2001). There is no antagonism or conflict between the named plaintiffs and the class members, and the latter's rights will be fully protected and enforced by provision of the relief requested by the named plaintiffs.
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On the second prong, plaintiffs' counsel have demonstrated their ability to handle
this litigation by vigorously representing Medicare beneficiaries, as well as beneficiaries
of other Social Security Act programs, for many years.9 Because of this extensive
relevant experience, plaintiffs' counsel are usually not questioned on the issue of adequacy of representation. lo
C. Plaintiffs meet the requirements of Rule 23(b)(2).
"In addition to satisfying Rule 23(a)'s prerequisites, parties seeking class
certification must show that the action is maintainable under Rule 23(b)(l), (2), or (3)."
Amchem Products, Inc., 521 U.S. at 614. Under (b)(2), "[c]lass certification is
appropriate where the defendant has acted or refused to act on grounds generally applicable to the class, thereby making i~unctive or declaratory relief appropriate."
Marisol A., 126 F.3d at 378. "The entire purpose behind Rule 23(b)(2) is to resolve
disputes concerning the existence of a policy and practice of discrimination against a
broad class of individuals." State ofConn. Office for Protection and Advocacyfor
Persons with Disabilities, 706 F. Supp. 2d at 288 (internal quotation marks and citation omitted).
9 A representative sample of reported Medicare decisions on which plaintiffs' counsel have served as lead or co-counsel includes Machado v. Leavitt, 542 F.Supp.2d 185 (D.Mass. 2008); Situ v. Leavitt, 240 F.R.D. 551 (N.D.Cal. 2007); Landers v. Leavitt, 2006 WL 2560297 (D.Conn. 2006), affd, 545 F.3d 98 (2d Cir. 2008), cert. denied, 129 U.S. 2878 (2009); Gray Panthers Project Fund v. Thompson, 273 F.Supp.2d 32 (D.D.C. 2002); Healey v. Thompson, 186 F.Supp.2d 105 (D.Conn. 2001), affd in part, vacated and remanded in part sub nom. Lutwin v. Thompson, 361 F.3d 146 (2d Cir. 2004); Fox v. Bowen, 656 F.Supp. 1236 (D.Conn. 1987).
10 Accordingly, and in order to avoid unnecessary filings, they are not filing declarations in support of their stated experience. See, e.g., Raymond, 220 F.R.D. at 180 (court relies on pleadings to conclude that plaintiffs' counsel are competent to handle the litigation); Doe, 198 F.R.D. at 333 (same). If it is deemed necessary, however, plaintiffs' counsel will further document their experience with declarations.
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Again, there can be little doubt that plaintiffs meet this requirement. This case presents the paradigm of a Rule 23(b)(2) class action, as plaintiffs seek injunctive relief and they predicate the lawsuit on the defendant's acts and omissions with respect to the class, namely, her policy of applying the Improvement Standard in the face of contrary regulations. Since the "deficiencies ... stem from central and systemic failures" by the Secretary, class certification under Rule 23(b)(2) is the appropriate vehicle for resolving the matter. Marisol A., 126 F.3d at 378; see also Yamasaki, 442 U.S. at 700-701 ((b)(2) class appropriate in challenge to procedures used in Social Security Act case); Raymond, 220 F.R.D. at 181 ("Cases of this nature, alleging systemic failure of governmental bodies to properly fulfill statutory requirements, have been held to be appropriate for class certification under Rule 23(b)(2)").
IV. PLAINTIFFS' COUNSEL SHOULD BE APPOINTED AS CLASS COUNSEL.
Rule 23(g) requires a court to appoint "class counsel" when a class is certified. F.R.Civ.P.23(g)(1). An applicant for class counsel must satisfy subsections (1) and (4) of Rule 23(g) ifthere is only one applicant, as is the case here. F.R.Civ.P.23(g)(2).
Closely tracking the language of Rule 23(a)(4), Rule 23(g)(4) requires that an attorney serving as class counsel "fairly and adequately represent the interests of the class." Plaintiffs have already shown how their attorneys, based on their histories of experience with Medicare and other Social Security Act programs, will fairly and adequately represent the class.
Rule (g)(l)(A) directs the Court to consider (i) the work counsel has done in identifying or investigating potential claims in the action; (ii) counsel's experience in handling class actions, other complex litigation, and claims of the type asserted in the action; (iii)

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counsel's knowledge of the applicable law; and (iv) the resources counsel will commit to representing the class. The Court may also consider "any other matter pertinent to counsel's ability to fairly and adequately represent the interests ofthe class." F.R.Civ.P.23(g)(1)(B). The Advisory Committee Notes to the 2003 amendments that added subsection (g) state that "[i]n evaluating prospective class counsel, the court should weigh all pertinent factors. No single factor should necessarily be determinative in a given case." Considering these factors, it is clear that plaintiffs' counsel have fully and completely identified the legal issues, as they have raised claims under the Medicare statute, the APA, the Freedom of Information Act, and the Due Process Clause. Their experience, as reflected in the sample of decisions listed in footnote 9, shows that they have extensive backgrounds in class actions, in the legal and factual issues raised by this case, and in Medicare law. Furthermore, the individual attorneys will have behind them the resources of both state and national organizations that for many years have specialized in the rights of the elderly and disabled and advocated aggressively on their behalf. There can be little doubt that they will meet the goal set out in the Advisory Committee Notes of "ensur[ing] adequate representation for the class." Plaintiffs' attorneys' experience, dedication, and knowledge are fully reflected in their lengthy careers on behalf of the elderly and disabled. Conversely, no reason presents itself as to why they should not be appointed as class counsel. A fair weighing of the factors set out at Rule 23(g) leads to the conclusion that plaintiffs' counsel should be appointed as class counsel. See, e.g., Landers, 232 F.R.D. at 48 (appointing several attorneys from the Center for Medicare Advocacy, Inc. as class counsel in a Medicare class action).
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J

v. CONCLUSION

As plaintiffs meet all the requirements of Rule 23(a) and subdivision (2) of Rule

23(b), the Court should certify the class.

DATED: January 13,2011

Respectfully submitted,

Gill Deford Judith A. Stein Margaret Murphy Wey-Wey Kwok Nancy V. Gifford Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 (860) 456-7790
Toby S. Edelman Center for Medicare Advocacy, Inc. 1025 Connecticut Ave., N.W., Suite 709 Washington, D.C. 20036 (202) 293-5760
Michael Benvenuto Devon Green Medicare Advocacy Project Vermont Legal Aid, Inc. P.O. Box 1367 Burlington, VT 05402 (802) 863-5620
Attorneys for Plaintiffs

24

 
 Case 5:11-cv-00017-cr Document 82 Filed 10/16/12 Page 1 of 3

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF VERMONT

GLENDA JIMMO, et al., on behalf of themselves and all others similarly situated,
Plaintiffs,
v.
KATHLEEN SEBELIUS, Secretary of Health and Human Services,
Defendant.

) ) ) ) ) Civil Action No. 5:11-CV-17-CR ) ) ) ) ) )

JOINT NOTICE REGARDING SETTLEMENT AGREEMENT Plaintiffs Glenda Jimmo, et al., by and through their undersigned counsel, and defendant, Kathleen Sebelius, the Secretary of Health and Human Services, by and through her undersigned counsel, respectfully provide Notice to the Court that the parties have reached a Settlement Agreement, as memorialized in the attached Proposed Settlement Agreement bearing the electronic signatures of counsel for the parties. Counsel will exchange hard copies for signature by hand so that each side may retain a signed original. The parties are currently preparing a Joint Motion for Preliminary Approval of the Settlement Agreement, which they will file for the Court’s consideration as soon as is feasible.

Dated: October 16, 2012.

Respectfully submitted,
STUART F. DELERY Acting Assistant Attorney General TRISTRAM J. COFFIN United States Attorney SHEILA M. LIEBER Deputy Director, Federal Programs Branch

Case 5:11-cv-00017-cr Document 82 Filed 10/16/12 Page 2 of 3

/s/ Steven Y. Bressler STEVEN Y. BRESSLER (D.C. Bar #482492) M. ANDREW ZEE (CA Bar #272510) Attorneys Federal Programs Branch U.S. Department of Justice, Civil Division 20 Massachusetts Avenue NW Washington, DC 20530 Telephone: (202) 305-0167 Fax: (202) 616-8470 Email: Steven.Bressler@usdoj.gov
Counsel for Defendant

/s/ Judith Stein (by permission) JUDITH STEIN Executive Director Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 jstein@medicareadvocacy.org (860) 456-7790 Fax: (860) 456-2614

Dated:

October 16, 2012

/s/ Gill Deford (by permission) GILL DEFORD Director of Litigation Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 gdeford@medicareadvocacy.org (860) 456-7790 Fax: (860) 456-2614

Dated:

October 16, 2012

/s/ Michael Benvenuto (by permission) MICHAEL BENVENUTO Director, Medicare Advocacy Project Vermont Legal Aid 264 North Winooski Avenue Burlington VT, 05402

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Case 5:11-cv-00017-cr Document 82 Filed 10/16/12 Page 3 of 3 mbenvenuto@vtlegalaid.org (802) 863-5620 DAVID J. BERGER MATTHEW R. REED Wilson Sonsini Goodrich & Rosati 650 Page Mill Road Palo Alto, CA 94306 DBerger@wsgr.com MReed@wsgr.com (650) 493-9300 Fax: (650) 493-6811 Counsel for Plaintiffs
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF VERMONT

GLENDA JIMMO, et al., on behalf of themselves and all others similarly situated,
Plaintiffs,
v.
KATHLEEN SEBELIUS, Secretary of Health and Human Services,
Defendant.

) ) ) ) ) Civil Action No. 5:11-CV-17-CR ) ) ) ) ) )

[Proposed] SETTLEMENT AGREEMENT

I. INTRODUCTION WHEREAS the parties desire to resolve amicably all the claims raised in this suit without admission of liability; WHEREAS the parties have agreed upon mutually satisfactory terms for the complete resolution of this Federal Rule of Civil Procedure 23(b)(2) class action litigation; NOW THEREFORE, the Plaintiffs and Defendant hereby consent to the entry of this Settlement Agreement with the following terms.
II. DEFINITIONS 1. “Approval Date” means the date upon which the Court approves this Settlement Agreement, after having determined that it is adequate, fair, reasonable, equitable, and just to the Class as a whole, after: (i) notice to the Class, (ii) an

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opportunity for class members to submit timely objections to the Settlement Agreement, and (iii) a hearing on the fairness of the settlement.
2. “Class Counsel” or “Plaintiffs’ Counsel” means the Center for Medicare Advocacy, Inc., Vermont Legal Aid, and Wilson Sonsini Goodrich & Rosati. “Plaintiffs’ Lead Counsel” means the attorney Plaintiffs have authorized to be the main contact with Defendant’s counsel.
3. The “Class” or “Class Members” means all Medicare beneficiaries as defined in Section XI.
4. “CMS” refers to the Centers for Medicare & Medicaid Services. 5. “Court” means the United States District Court for the District of Vermont. 6. “Defendant” or “the Secretary” means the Secretary of Health and Human Services, in his or her official capacity. 7. "Final, non-appealable denial" or “final and non-appealable” denial means a denial for which the applicable deadline, as described in federal regulations, for an appeal of a decision has expired. 8. “Named Plaintiffs” refers to the individuals and organizations who are named in the First Amended Complaint and have not been dismissed from this action by the Court as of the Approval Date. 9. “Improvement Standard” refers to a standard that Plaintiffs have alleged, but that Defendant denies, exists under which Medicare coverage of skilled services is denied on the basis that a Medicare beneficiary is not improving, without regard to an
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individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care or services in question.
10. “Parties” refers to Plaintiffs and to Defendant. 11. “Plaintiffs” refers to the Named Plaintiffs, acting on their own behalf and on behalf of all Class Members. 12. “State Medicaid agencies” refers to the agencies or their contractors within the fifty States and the District of Columbia that are responsible for administering medical assistance benefits under Title XIX of the Social Security Act. 13. “End of the Educational Campaign” means the date upon which the Educational Campaign described in Section IX.9 has been conducted and completed as agreed, as evidenced by Defendant’s notification to Plaintiffs’ Lead Counsel and certification in good faith that all terms of the Educational Campaign have been conducted and completed. 14. “HH” refers to “home health services” as addressed by § 1861(m) of the Social Security Act/ 42 U.S.C. § 1395x(m); 15. “SNF” refers to “skilled nursing facility” as addressed by § 1819(a) of the Social Security Act/ 42 U.S.C. § 1395i-3(a); 16. "OPT" refers to outpatient therapy services as follows: outpatient physical therapy services as addressed by § 1861(p) of the Social Security Act/ 42 U.S.C. § 1395x(p), outpatient occupational therapy services as addressed by § 1861(g) of the Social Security Act/ 42 U.S.C. § 1395x(g), and outpatient speech-language pathology services as addressed by § 1861(ll)(2) of the Social Security Act/ 42 U.S.C. § 1395x(ll)(2),
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17. “IRF” refers to “inpatient rehabilitation facility” as addressed by 42 C.F.R.

Part 412, Subpart P.

18. “CORF” refers to “comprehensive rehabilitation facility” as addressed by

§ 1861(cc) of the Social Security Act/ 42 U.S.C. § 1395x(cc)

III. ENTIRE AGREEMENT

The terms of this Settlement Agreement and any attachments thereto are the

exclusive and full agreement of the Parties with respect to all claims for declaratory and

injunctive relief and attorney’s fees and costs as set forth in this Settlement Agreement

and in the First Amended Complaint. No representations or inducements or promises to

compromise this action or enter into this Settlement Agreement have been made, other

than those recited or referenced in this Settlement Agreement.

IV. APPROVAL

1.

This Settlement Agreement is expressly conditioned upon its approval by

the Court.

2.

The terms of this Settlement Agreement are fair, reasonable, and

adequate. The entry of this Settlement Agreement is in the best interest of the Parties and

the public.

V. FINAL JUDGMENT

If, after the fairness hearing, the Court approves this Settlement Agreement as

fair, reasonable, and adequate, the Court shall direct the entry of Final Judgment (the

“Final Judgment”) dismissing this action with prejudice, pursuant to the terms of this

Settlement Agreement and Fed. R. Civ. P. 41, except that the Court shall retain

jurisdiction for the limited purposes described in Section VI of this Settlement

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Agreement. The Final Judgment shall incorporate and be subject to the terms of the Settlement Agreement.
VI. CONTINUING JURISDICTION 1. The Court has held, contrary to arguments made by Defendant, that it has subject matter jurisdiction over this matter. See Opinion and Order dated October 25, 2011 (Docket Entry No. 52). 2. If for any reason this Settlement Agreement (a) is not finalized by the parties, (b) is not approved by the Court following notice to class members and the fairness hearing, or (c) is in any way rendered null and void (in whole or in part), Defendant preserves all of her rights to argue (in this Court or on appeal) that the Court lacks subject matter jurisdiction over this matter. 3. Subject to the limitations and reservations set forth in the preceding paragraph, the Court will retain jurisdiction over this matter only for the limited purposes described in this paragraph for the following duration: (a) the Court will retain jurisdiction for a period not to exceed twenty-four (24) months following the End of the Educational Campaign if the Administrator of CMS issues a CMS Ruling communicating the clarified maintenance coverage standards for skilled nursing facility (SNF), home health (HH) and outpatient therapy (OPT) as set forth in Sections IX.6 and IX.7 of this Settlement Agreement within three (3) months after the effective date of the Manual Provisions; or (b) the Court will retain jurisdiction for a period not to exceed thirty-six (36) months following the End of the Educational Campaign if the Administrator of CMS does not issue such a CMS Ruling within three (3) months after the effective date of the Manual Provisions. Such limited jurisdiction shall be for the sole purposes of (a)
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enforcing the provisions of the Settlement Agreement in the event that one of the Parties claims that there has been a breach of any of those provisions, (b) modifying the Settlement Agreement if jointly requested by the Parties pursuant to Section VII, (c) entering any other order authorized by the Settlement Agreement, and (d) deciding any fee petition filed by Plaintiffs, solely in the event that the parties are unable to agree on an amount of reasonable attorney’s fees, as further described in Section X.
4. Notwithstanding the time frames for the Court’s continuing jurisdiction discussed in the previous Section VI.3, the Court shall maintain jurisdiction to rule on a motion for enforcement of this Settlement Agreement, or for attorney’s fees, filed prior to the end of the applicable time frame set out in Section VI.3. The Court will also have jurisdiction to rule on a motion for enforcement of this Settlement Agreement that was filed after the end of the applicable time frame in Section VI.3. if the Dispute Resolution process in Section VIII of this Settlement Agreement is initiated prior to the end of the time frame and if the Party files the motion for enforcement within 30 days of the other Party’s written statement of disagreement with the relief requested by the moving Party.
VII. MODIFICATION At any time while the Court retains jurisdiction over this matter as described in Section VI, Plaintiffs and Defendant may jointly agree to modify this Settlement Agreement. Any joint request for modification must be in writing, signed by both Class Counsel and Defendant's counsel, and is subject to approval by the Court.
VIII. DISPUTE RESOLUTION PROCEDURES
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Either Party shall have the right to initiate steps to resolve any alleged noncompliance with any provision of the Settlement Agreement, subject to limitations and standards set forth in the Settlement Agreement.
1. If one party (the “Initiating Party”) has good reason to believe that an issue of noncompliance exists, it will first give timely written notice to the other party (the “Responding Party”), including: (a) a reference to all specific provisions of the Settlement Agreement that are involved; (b) a statement of the issue; (c) a statement of the remedial action sought by the Initiating Party; and (d) a brief statement of the specific facts, circumstances, and any other arguments supporting the position of the Initiating Party; and (e) if there is a good faith basis for expedited resolution, the circumstances that make expedited resolution appropriate, and the proposed date for a reasonable expedited response. To be timely, such notice must be provided promptly. Notice that is not provided promptly because of a lack of diligence on the part of the Initiating Party shall not serve as a basis for the Court to exercise jurisdiction as described in Section VI.4 above.
2. Within thirty (30) calendar days after receiving such timely notice or within a reasonable time for an expedited resolution, the Responding Party shall respond in writing to the statement of facts and arguments set forth in the notice and shall provide its written position, including the facts and arguments upon which it relies in support of its position.
3. The Parties shall undertake good-faith negotiations, including meeting and conferring by telephone or in person and exchanging relevant documents and/or other information, to attempt to resolve the alleged noncompliance. The written notice set
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forth in Section VIII.1 may be amended solely to include issue(s) related to the original notice that may arise during the meet-and-confer process described in this paragraph.
4. If the Initiating Party believes in good faith that efforts to resolve the matter have failed or if sixty (60) calendar days have elapsed from the Receiving Party’s receipt of timely notice, the Initiating Party, after providing written notice to the Responding Party, may file a motion with the Court, with a supporting brief, requesting resolution of the alleged noncompliance, provided however that the relief sought by such motion shall be limited to the issue(s) of alleged noncompliance described in the written notice, as to which the Parties have met and conferred as described in Section VIII.3.
5. The Responding Party shall be provided with appropriate notice of any such motion and an opportunity to be heard on the motion, as provided under the Civil Local Rules of the District of Vermont and the Federal Rules of Civil Procedure.
6. The Initiating Party cannot seek contempt sanctions as a remedy for alleged noncompliance with the Settlement Agreement. If, however, the Initiating Party successfully argues to the Court that there has been a breach of the Agreement and obtains an order from the Court compelling the Responding Party to remedy the breach, and if the Responding Party subsequently violates that order, then the Initiating Party is free to seek contempt sanctions for that violation.
IX. INJUNCTIVE PROVISIONS Manual Revisions
1. The agency will revise the relevant portions of Chapters 7, 8, and 15 of the Medicare Benefit Policy Manual (MBPM) to clarify the coverage standards for the skilled nursing facility (SNF), home health (HH), and outpatient therapy (OPT) benefits
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when a patient has no restoration or improvement potential but when that patient needs skilled SNF, HH, or OPT services (SNF, HH, OPT “maintenance coverage standard”). The agency will also revise the relevant portions of Chapter 1, Section 110 of the MBPM to clarify the coverage standards for services performed in an inpatient rehabilitation facility (IRF).
2. The manual revisions to be made pursuant to this Settlement Agreement will clarify the SNF, HH, and OPT maintenance coverage standards and IRF coverage standard only as set forth below in Sections IX.6 through IX.8. Existing Medicare eligibility requirements for coverage remain in effect. Nothing in this Settlement Agreement modifies, contracts, or expands the existing eligibility requirements for receiving Medicare coverage, including such requirements found in:
a. Posthospital SNF Care, as set forth in 42 C.F.R. Part 409, Subparts C and D, and related subregulatory guidance; b. Home Health Services, as set forth in 42 C.F.R. Part 409, Subpart E, 42 C.F.R. Part 410, Subpart C, and related subregulatory guidance; c. Outpatient Therapy Services, as set forth in 42 C.F.R. Part 410, Subpart B, and related subregulatory guidance; and d. Inpatient Rehabilitation Facility services, as set forth in 42 C.F.R. Part 412, Subpart P, and related subregulatory guidance. 3. CMS will revise or eliminate any manual provisions in Chapters 7, 8, and 15 and Chapter 1, Section 110 of the MBPM that CMS determines are in conflict with the standards set forth below in Sections IX.6 through IX.8.
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4. CMS will afford Plaintiffs’ Counsel 21 days to review and provide a single set of written comments on the manual provisions revised or eliminated as part of settlement before the manual provisions are finalized and issued. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. If plaintiffs request, CMS will also afford Plaintiffs’ Counsel a second opportunity for review and comment on these manual revisions before the manual provisions are finalized and issued; Plaintiffs’ Counsel will have 14 days to review any subsequent changes made and either provide a second set of written comments or communicate its comments at a meeting between counsel. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. CMS shall retain final authority as to the ultimate content of the manual provisions.
5. In providing any set of recommendations described in paragraph 4 above, Plaintiffs agree to collect all recommendations into one consolidated document to be provided by Plaintiffs’ Lead Counsel.
Maintenance Coverage Standard for Therapy Services under the SNF, HH, and OPT Benefits
6. Manual revisions will clarify that SNF, HH, and OPT coverage of therapy to perform a maintenance program does not turn on the presence or absence of a
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beneficiary’s potential for improvement from the therapy, but rather on the beneficiary’s need for skilled care.
a. The manual revisions will clarify that, under the SNF, HH, and OPT maintenance coverage standards, skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist (“skilled care”) are necessary for the performance of a safe and effective maintenance program. Such a maintenance program to maintain the patient’s current condition or to prevent or slow further deterioration is covered so long as the beneficiary requires skilled care for the safe and effective performance of the program. When, however, the individualized assessment does not demonstrate such a necessity for skilled care, including when the performance of a maintenance program does not require the skills of a therapist because it could safely and effectively be accomplished by the patient or with the assistance of nontherapists, including unskilled caregivers, such maintenance services will not be covered under the SNF, HH, or OPT benefits. b. The manual revisions will further clarify that, under the standard set forth in the previous paragraph (Section IX.6.a.), skilled care is necessary for the performance of a safe and effective maintenance program only when (a) the particular patient’s special medical complications require the skills of a qualified therapist to perform a therapy service that would otherwise be considered non-skilled; or (b) the
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needed therapy procedures are of such complexity that the skills of a qualified therapist are required to perform the procedure. c. The manual revisions will further clarify that, to the extent provided by regulation, the establishment or design of a maintenance program by a qualified therapist, the instruction of the beneficiary or appropriate caregiver by a qualified therapist regarding a maintenance program, and the necessary periodic reevaluations by a qualified therapist of the beneficiary and maintenance program are covered to the degree that the specialized knowledge and judgment of a qualified therapist are required.
d. The maintenance coverage standard for therapy as outlined in this section does not apply to therapy services provided in an inpatient rehabilitation facility (IRF) or a comprehensive outpatient rehabilitation facility (CORF).
Maintenance Coverage Standard for Nursing Services under the SNF and HH Benefits
7. Manual revisions will clarify that SNF and HH coverage of nursing care does not turn on the presence or absence of an individual’s potential for improvement from the nursing care, but rather on the beneficiary’s need for skilled care.
a. The manual revisions will clarify that, under the SNF and HH benefits, skilled nursing services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a registered nurse or, when
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provided by regulation, a licensed practical (vocational) nurse (“skilled care”) are necessary. Skilled nursing services would be covered where such skilled nursing services are necessary to maintain the patient’s current condition or prevent or slow further deterioration so long as the beneficiary requires skilled care for the services to be safely and effectively provided. When, however, the individualized assessment does not demonstrate such a necessity for skilled care, including when the services needed do not require skilled nursing care because they could safely and effectively be performed by the patient or unskilled caregivers, such services will not be covered under the SNF or HH benefits. b. The manual revisions will further clarify that, under the standard set forth in the previous paragraph (Section IX.7.a.), skilled nursing care is necessary only when (a) the particular patient’s special medical complications require the skills of a registered nurse or, when provided by regulation, a licensed practical nurse to perform a type of service that would otherwise be considered non-skilled; or (b) the needed services are of such complexity that the skills of a registered nurse or, when provided by regulation, a licensed practical nurse are required to furnish the services. To be considered a skilled service, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel as provided by regulation, including 42 C.F.R. 409.32.
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c. The maintenance coverage standard for nursing services as outlined in this section does not apply to nursing services provided in an inpatient rehabilitation facility (IRF) or a comprehensive outpatient rehabilitation facility (CORF). IRF Coverage Standard 8. Manual revisions will clarify that an IRF claim could never be denied for the following reasons: (1) because a patient could not be expected to achieve complete independence in the domain of self-care or (2) because a patient could not be expected to return to his or her prior level of functioning. Educational Campaign 9. CMS will engage in a nationwide educational campaign, as set forth in the following Sections IX.10 through IX.14, which will use written materials and interactive forums with providers and contractors, to communicate the SNF, home health, and OPT maintenance coverage standards and the IRF coverage standards as set forth in Sections IX.6 through IX.8. 10. The educational campaign will be directed to include the following contractors, adjudicators, and providers and suppliers (collectively “recipients”) through the following written educational materials (“written educational materials”): a. Medicare Administrative Contractors (MACs, Part A/B contractors): Program Transmittal and MLN Matters article
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b. Medicare Advantage (MA) Organizations (Part C contractors): Health Plan Management System (HPMS) memorandum and MLN Matters article c. Part A/B Qualified Independent Contractors (QICs): MLN Matters article d. Part C QIC/Independent Review Entity (IRE): MLN Matters article e. Quality Improvement Organizations (QIOs, formerly PROs): Transmittal of Policy Systems (TOPS) memorandum and MLN Matters article f. Recovery Audit Contractors (RACs): Program Transmittal and MLN Matters article g. Administrative Law Judges (ALJs): MLN Matters article will be distributed to the Chief Administrative Law Judge for dissemination to the ALJs. h. Medicare Appeals Council: MLN Matters article will be distributed to the Chair of the Departmental Appeals Board for dissemination to the Administrative Appeals Judges. i. Providers and suppliers: MLN Matters article to be distributed by the MACs, MA contractors, and CMS via listservs to subscribed providers. j. Subscribers to CMS listservs: MLN Matters article
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k. 1-800 MEDICARE Scripts: CMS will revise relevant 1-800 MEDICARE customer service scripts as necessary to ensure consistency with the revised manual provisions 11. CMS will include an accompanying message with the distribution of the MLN Matters article stating that the article was prepared and is being distributed as a result of this Settlement Agreement. 12. CMS will afford Plaintiffs’ Counsel 21 days to review and provide a single set of written comments on the written educational materials created as part of settlement before the materials are finalized and issued. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. If Plaintiffs request, CMS will also afford Plaintiffs’ Counsel a second opportunity for review and comment on these written educational materials before they are finalized and disseminated: Plaintiffs’ Counsel will have 14 days to review any subsequent changes made and either provide a second set of written comments or communicate its comments at a meeting between counsel. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. CMS shall retain final authority as to the ultimate content of the written educational materials. CMS,
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through counsel, agrees to tell Plaintiffs’ Counsel (through Plaintiffs’ Lead Counsel) when the written educational materials have been distributed.
13. In providing any set of recommendations described in paragraph 12 above, Plaintiffs agree to collect all recommendations into one consolidated document to be provided by Plaintiffs’ Lead Counsel.
14. Other educational initiatives: a. National Call for providers & suppliers: CMS will conduct a National Call for providers and suppliers for the sole purpose of communicating the policy clarifications reflected by the manual revisions agreed to as part of this Settlement Agreement as detailed in Sections IX.6 through IX.8. An audio and written transcript of the call will be made available on the CMS website, www.CMS.gov, for those providers and suppliers unable to attend the call. b. National Call for contractors & adjudicators: CMS will conduct a National Call for contractors, ALJs, medical reviewers, and agency staff to communicate the policy clarifications reflected by the manual revisions agreed to as part of this Settlement Agreement as detailed in Sections IX.6 through IX.8. Following this National Call, CMS will provide all contractors and adjudicators invited to the call a summary of the call, consisting of a copy of the PowerPoint slides presented and the summary prepared by CMS of the questions posed and answers provided during this National Call.
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c. For both National Calls, CMS will prepare a deck of PowerPoint slides to assist in communicating the policy clarifications reflected by the manual revisions. Before these slides are finalized, CMS will afford Plaintiffs’ Counsel at least 7 days to review and provide a single set of written comments on the slides. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize in the final presentation Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. CMS shall retain final authority as to the ultimate content of these PowerPoint slides. In providing any set of recommendations described in this paragraph, Plaintiffs agree to collect all recommendations into one consolidated document to be provided by Plaintiffs' Lead Counsel. d. Open Door Forum (ODF):
Following the issuance of the manual revisions made pursuant to this Settlement Agreement, CMS will include an announcement of the manual revisions and a reference to the above-described National Call for providers and suppliers as agenda items for a Home Health, Hospice, and Durable Medical Equipment ODF, a Hospital ODF, a Physicians, Nurses and Allied Health Professionals ODF, and a Skilled Nursing Facilities/Long-Term Care ODF. Following the issuance of the manual revisions, CMS
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will also include an announcement of the manual revisions as an agenda item for a Medicare Beneficiary ombudsman ODF. e. CMS will post the Program Transmittal and MLN Matters article on CMS’s website, www.CMS.gov. CMS will inform Plaintiffs’ Lead Counsel when the Program Transmittal is issued. 15. CMS will make a good faith effort to notify Plaintiffs’ Lead Counsel, in advance of the National Calls and Open Door Forums described above in Section IX.14 to be held to carry out the educational campaign provided in the settlement agreement. Plaintiffs and Plaintiffs’ Counsel will be permitted to attend the Open Door Forums and the National Call for providers and suppliers described above in Section IX.14. Following the National Call for contractors and adjudicators described above in Section IX.14.b, CMS, through counsel, will provide to Plaintiffs’ Counsel (1) a certification that this National Call occurred; (2) a certification that guidance was given consistent with the PowerPoint slides described in Section IX.14.c and the manual revisions revised as part of this Settlement Agreement as set forth in Sections IX.6 through IX.8; (3) a certification that any questions from contractors or adjudicators were answered consistent with those manual revisions; and (4) a summary prepared by CMS of the questions posed and answers provided during this National Call. 16. CMS agrees to finalize and issue the revised manual provisions and to carry out the educational campaign provided by the settlement agreement within one year of the Approval Date.
Accountability Measures Claims Review
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17. CMS will engage in the following measures: a. Sampling of QIC Decisions: CMS will develop protocols for reviewing a random sample of SNF, HH, and OPT coverage decisions by the QICs (for claims under Parts A, B, and C) under the SNF, HH, and OPT maintenance coverage standards set forth above in Sections IX.6 through IX.7 to determine overall trends and any problems in the application of these maintenance coverage standards. CMS will make a reasonable effort to draw the random sample of QIC decisions to reflect claims initially decided by a representative cross-section of contractors and MA Organizations. Plaintiffs’ Counsel may provide suggestions to CMS as to how to identify appropriate claims for sampling, e.g., through target diagnosis codes. b. CMS will provide updates to Plaintiffs’ Counsel regarding the results of this random sampling during the bi-annual meetings referenced below in Section IX.17.f, beginning with the first meeting following completion of the educational campaign (which will be the second of the five bi-annual meetings). CMS’s obligation to conduct sampling of QIC decisions as described above in Section IX.17.a pursuant to this Settlement Agreement terminates with the results reported at the fifth and final of the bi-annual meetings. c. For any QIC decision from the random sample in which CMS finds reason to believe an error was made in applying the correct SNF, HH, and OPT maintenance coverage standards as set forth in Sections
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IX.6 and IX.7, CMS will contact the QIC to determine whether an error was made. For those decisions in which an error by the QIC is confirmed, CMS will direct, or request if the agency does not have authority to direct, the QIC to correct its error. d. If the random sampling indicates that a particular Medicare contractor or MA organization is not applying the correct SNF, HH, and OPT maintenance coverage standards as set forth in Sections IX.6 and IX.7, CMS will address this issue directly with that entity. The manner in which CMS addresses the issue will be within its discretion. e. Review of Individual Claims Determinations: To address any individual beneficiary claims determinations that Plaintiffs believe were not decided in accordance with the SNF, HH, and OPT maintenance coverage standards as set forth above in Sections IX.6 and IX.7, CMS will agree to review and address individual claims determinations as follows:
1. During the bi-annual meetings referenced below in Section IX.17.f, Plaintiffs will present CMS (through Plaintiffs’ Lead Counsel) individual claims determinations it believes were not decided in accordance with the SNF, HH, and OPT maintenance coverage standards as set forth in Sections IX.6 and IX.7. The total number of such individual claims determinations Plaintiffs’ Counsel presents over the course of all bi-annual meetings is not to exceed 100.
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2. CMS will direct, or request if the agency does not have authority to direct, the pertinent Medicare contractors or MA Organizations to review and evaluate these claims and related documentation. If the review of such claims indicates that a particular Medicare contractor or MA organization is not applying the correct SNF, HH, and OPT maintenance coverage standard as set forth in Sections IX.6 and IX.7, CMS will address this issue directly with that entity. The manner in which CMS addresses the issue will be within its discretion. Workload permitting, CMS will provide updates to Plaintiffs’ Lead Counsel regarding the action taken on these cases during the subsequent bi-annual meeting referenced below in Section IX.17.f , provided that CMS receives proper authorization from the beneficiary.
f. Bi-Annual Meetings: CMS will meet with Plaintiffs’ Counsel on a biannual basis to discuss the results of the sampling of claims data and the agency’s review of the individual claims determinations as discussed above in Sections IX.17.a-b and IX.17.e. The meetings can also be used to bring any issues related to the settlement to the agency’s attention. The first of these meetings will take place following the issuance of the revised manual provisions and prior to the completion of the educational
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campaign, and meetings will continue on a bi-annual basis thereafter for a total of five (5) meetings. 18. The Parties recognize that Defendant's obligations are met under the Settlement Agreement once it has complied with the terms of this Settlement Agreement, and that Defendant is not guaranteeing to Plaintiffs that certain results will be achieved once the steps set forth in this Settlement Agreement have been implemented.
X. ATTORNEY’S FEES Defendant agrees to pay reasonable and appropriate attorney’s fees, costs, and expenses related to work performed by Plaintiffs’ Counsel in the litigation and settlement of this matter up until the Approval Date, subject to appropriate documentation and exercise of business judgment by Plaintiffs and Plaintiffs’ Counsel, pursuant to the Equal Access to Justice Act. For work performed by Plaintiffs’ Counsel after the Approval Date, Defendant agrees to pay reasonable and appropriate attorney’s fees, costs, and expenses only for the post-Approval Date work specified in this Settlement Agreement, to be capped at $300,000, subject to appropriate documentation and exercise of business judgment by Plaintiffs and their attorneys and pursuant to the Equal Access to Justice Act. However, if Plaintiffs initiate proceedings to enforce this Settlement Agreement, as described above, and if the Court finds that Defendant has not complied with the Settlement Agreement, Plaintiffs reserve the right to seek the payment of additional fees, costs, and expenses in connection with that enforcement proceeding that will not be subject to the above cap. Plaintiffs’ Lead Counsel may submit request(s) for postApproval fees to Defendant’s Counsel for periods no less than 12 months in length, except for the last period if one or more earlier periods has been for more than 12 months.
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In the event that the parties are unable to agree upon the amount of fees, Plaintiffs may retain the right to file a fee petition with the Court. Notwithstanding their agreement to limit any post-Approval attorney’s fees, costs, and expenses to the above fee cap, Plaintiffs and Plaintiffs’ Counsel object to the principle of a fee cap and reserve their right to object to such a cap in future cases.
XI. CLASS CERTIFICATION AND RELIEF Class Definition
1. Defendant will stipulate to the certification of a class pursuant to Federal Rule of Civil Procedure 23(b)(2) consisting of all Medicare beneficiaries who:
a. received skilled nursing or therapy services in a skilled nursing facility, home health setting, or outpatient setting; and b. received a denial of Medicare coverage (in part or in full) for those services described in the previous paragraph based on a lack of improvement potential in violation of the SNF, HH, or OPT maintenance coverage standards as defined above in section Sections IX.6 and IX.7 and that denial became final and non-appealable on or after January 18, 2011; and c. seek Medicare coverage on his or her own behalf; the definition of class members specifically excludes providers or suppliers of Medicare services or a Medicaid State Agency.
Re-Review Relief for Certain Members of the Class
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2. Certain members of the class are eligible for re-review of the claim denials described above in Section XI.1.b, if the following requirements are met:
a. The services described above in Section XI.1.a that are the subject of the denial described above in Section XI.1.b must not have been covered or paid for by any third-party payer or insurer or Medicare, except in the case of an individual Medicare beneficiary whose services were paid for by Medicaid and who paid for the service or is personally or financially liable or subject to recovery for the services; and b. There must not have been a basis for the denial of the claim for Medicare coverage that was separate and independent from the alleged failure to apply the SNF, HH, or OPT maintenance coverage standards as defined above in Sections IX.6 and IX.7. A separate and independent basis for denial would include the failure to satisfy any procedural requirement, any Medicare eligibility requirement, or any threshold requirement for coverage, but a conclusory determination that services were not “reasonable and necessary,” were not “medically necessary,” or that coverage is denied using other conclusory, non-specific language, that may be based on a failure to apply the SNF, HH, or OPT maintenance coverage standards as defined in Sections IX.6 and IX.7 above would not be such a separate and independent basis for denial. 3. Claim denials described in Section XI.1.b that become final and nonappealable after the End of the Educational Campaign are not eligible for re-review under this Section (XI).
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4. Claims of class members other than of the Named Plaintiffs that are currently the subject of any lawsuit pending in an Article III United States Court or have been the subject of a final, non-appealable judgment by such courts are not eligible for rereview under this Section (XI).
5. Only class members on their own behalf may receive re-review of claims under this section. No provider or supplier of Medicare services or Medicaid State Agency is permitted to receive re-review under this section on behalf of or by assignment from a class member.
6. Class members who are eligible for re-review of claim denials will be partitioned into two groups.
a. Group 1 consists of all class members who received a final, nonappealable denial of Medicare coverage (in part or in full) where that denial became final and non-appealable after January 18, 2011 and up to and including the Approval Date. b. Group 2 consists of all class members who received a final, nonappealable denial of Medicare coverage (in part or in full) from the day after the Approval Date through and including the End of the Educational Campaign. 7. Group 1 class members seeking re-review relief as set forth in this Section (XI) will be required to identify themselves and their final, non-appealable denials to CMS no later than six (6) months after the End of the Educational Campaign. Group 2 class members seeking re-review relief as set forth in this Section (XI) will be
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required to identify themselves and their final, non-appealable denials to CMS no later than twelve (12) months after the End of the Educational Campaign.
8. For each Group 1 or 2 class member who identifies himself or herself to CMS within the specified timeframe for re-review as set forth in the previous paragraph, the agency will direct, or request if the agency does not have the authority to direct, the contractor or adjudicator who last denied the class member’s claim for Medicare coverage to re-review the claim under the clarified maintenance coverage standards set forth above in Sections IX.6 and IX.7, subject to the exceptions described above in Sections XI.4 and XI.5.
9. When results of the re-review process confirm that the claim was denied in error and that the care should have been covered by Medicare, the agency will reimburse for that care, or, if the agency does not have the authority to reimburse, request reimbursement for the class member for that care, subject to applicable Medicare reimbursement limits.
10. Within 10 days of Approval of this Settlement Agreement, Defendant will inform Plaintiffs’ Lead Counsel of the process, including to whom class members should identify themselves (pursuant to Section XI.7 through XI.8), by which class members should identify themselves in order to obtain re-review.
11. Within 30 days after the End of the Educational Campaign, Plaintiffs’ Lead Counsel shall provide Defendant with the final claim denial that Ms. Jimmo received that is at issue in this lawsuit. Defendant shall promptly process Ms. Jimmo’s claim under the re-review process as set forth in Section XI.2 through XI.10. Defendant
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Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 28 of 32
shall make a good faith effort to issue a final decision on Ms. Jimmo’s claim, if appropriate, as soon as practicable.
XII. COMPLIANCE WITH LEGAL AUTHORITY The parties recognize that Defendant is required to comply with applicable statutes and regulations, including any future revisions to the statutes and regulations that govern Medicare coverage, and that nothing in this Settlement Agreement shall prohibit Defendant from modifying its policies and procedures to comply with any relevant statutory or regulatory changes, even if such modifications are made during the period of the Court’s continuing jurisdiction under this Settlement Agreement, or from otherwise changing Defendant’s regulations in a manner consistent with the Administrative Procedure Act. If Plaintiffs’ Counsel believes that any such modifications to Defendant’s policies and procedures, such as the Medicare Benefits Policy Manual, are not authorized by any statutory or regulatory changes, and that any such modifications would constitute a breach of any of the provisions of this Settlement Agreement, they reserve the right to initiate the Dispute Resolution process in Section VIII.
XIII. RELEASE 1. In consideration for the promises of Defendant as set forth in this Settlement Agreement, the Named Plaintiffs and all Class Members, and their heirs, administrators, successors, or assigns (together, the “Releasors”), hereby release and forever discharge Defendant and the United States Department of Health and Human Services (HHS), along with Defendant's and HHS's administrators, successors, officers, employees, and agents (together, the “Releasees”) from any and all claims and causes of action that have been asserted or could have been asserted in this action by reason of, or
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with respect to, Plaintiffs' allegations that Defendant has illegally applied, or has failed to properly prevent the application of, an Improvement Standard under which Medicare coverage of skilled services is denied on the basis that a Medicare beneficiary is not improving, without regard to an individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care or services in question.
2. The above release shall not affect the right of any Class Member to seek any and all individual relief that is otherwise available in satisfaction of an individual claim against Defendant for Medicare benefits that is not based upon the allegations set forth in Section XIII.1 above.
3. The above release also shall not affect Plaintiffs' or any Class Member's right, if any, to bring a separate lawsuit challenging any new policy or procedure that is adopted by Defendant after the end of the Court's jurisdiction over this Settlement Agreement, as described in Section VI. Plaintiffs and Class Members will have no right to claim that such a change in policies or procedures violates the Settlement Agreement, but do not waive any right to claim that the new policy or procedure violates the Social Security Act, Defendant's regulations, or any other provision of law.
XIV. NO ADMISSION OF LIABILITY Neither this Settlement Agreement nor any order approving this Settlement Agreement is or shall be construed as an admission by Defendant of the truth of any of the allegations set forth in the First Amended Complaint or the validity of the claims
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asserted in the First Amended Complaint, or of Defendant's liability for any of those claims.

The undersigned representatives of the parties certify that they are fully authorized to consent to the Court’s entry of the terms and conditions of this Settlement Agreement.

Dated:

October 16, 2012

/s/ Judith Stein (by permission) JUDITH STEIN Executive Director Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 jstein@medicareadvocacy.org (860) 456-7790 Fax: (860) 456-2614

Dated:

October 16, 2012

/s/ Gill Deford (by permission) GILL DEFORD Director of Litigation Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 gdeford@medicareadvocacy.org (860) 456-7790 Fax: (860) 456-2614

Dated:

October 16, 2012

/s/ Michael Benvenuto (by permission) MICHAEL BENVENUTO Director, Medicare Advocacy Project Vermont Legal Aid 264 North Winooski Avenue Burlington VT, 05402 mbenvenuto@vtlegalaid.org

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(802) 863-5620

DAVID J. BERGER MATTHEW R. REED Wilson Sonsini Goodrich & Rosati 650 Page Mill Road Palo Alto, CA 94306 DBerger@wsgr.com MReed@wsgr.com (650) 493-9300 Fax: (650) 493-6811

Counsel for Plaintiffs

Dated:

October 16, 2012

STUART F. DELERY Acting Assistant Attorney General TRISTRAM J. COFFIN United States Attorney

SHEILA M. LIEBER Deputy Director, Federal Programs Branch

/s/ Steven Y. Bressler STEVEN Y. BRESSLER (D.C. Bar #482492) M. ANDREW ZEE (CA Bar #272510) Attorneys Federal Programs Branch U.S. Department of Justice, Civil Division P.O. Box 883 Washington, DC 20044 Telephone: (202) 305-0167 Fax: (202) 616-8470 Email: Steven.Bressler@usdoj.gov

Counsel for Defendant

WILLIAM B. SCHULTZ Acting General Counsel JANICE L. HOFFMAN Associate General Counsel WILLIAM ALVARADO RIVERA Acting Deputy Associate General Counsel SUSAN MAXSON LYONS KIRSTEN FRIEDEL RODDY

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Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 32 of 32 Attorneys U.S. Department of
Health and Human Services Of Counsel for Defendant
32

 
 Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 1 of 45

UNITED STATES DISTRICT COURT DISTRICT OF VERMONT

Zull t'1p,F( -3 PI'1 2: 53

GLENDA JIMMO, KR by her guardian

)

KENNETH ROBERTS, MIRIAM KATZ,

)

EDITH MASTERMAN, MARY PATRICIA

)

BOITANO, NATIONAL COMMITTEE TO

)

PRESERVE SOCIAL SECURITY AND

)

MEDICARE, NATIONAL MULTIPLE

)

SCLEROSIS SOCIETY, PARKINSON'S

)

ACTION NETWORK, PARAL YZED

)

VETERANS OF AMERICA, AMERICAN

)

ACADEMY OF PHYSICAL MEDICINE AND )

REHABILITATION, ALZHEIMER'S

)

DISEASE AND RELATED DISORDERS

)

ASSOCIATION, INC. d/b/a ALZHEIMER'S

)

ASSOCIATION®, UNITED CEREBRAL PALSY, )

and ROSALIE MCGILL, on behalf of themselves )

and all others similarly situated,

)

)

)

Plaintiffs,

)

)

vs.

)

)

)

KATHLEEN SEBELIUS, Secretary of

)

Health and Human Services,

)

)

Defendant.

)

r,
Civil Action No.5: 11-CV-17
AMENDED COMPLAINT FOR DECLARATORY, INJUNCTIVE, AND MANDAMUS RELIEF
CLASS ACTION

-----------------)
I. PRELIMINARY STATEMENT

1. This is an action for declaratory, injunctive, and mandamus relief against

the Secretary of Health and Human Services (the Secretary) as the official responsible for

implementing and enforcing the Medicare program. Under the Medicare statute and

regulations, coverage is available for health care and therapy services that are "reasonable

and necessary for the diagnosis or treatment of illness or injury." This standard requires

the evaluation for coverage on the basis of a beneficiary's unique condition and

Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 2 of 45
individual needs. The Secretary, however, imposes a covert rule of thumb that operates as an additional and illegal condition of coverage and results in the termination, reduction, or denial of coverage for thousands of Medicare beneficiaries annually.
2. This additional condition of eligibility, which is usually implemented at the lower levels of Medicare's administrative review process where the overwhelming majority of decisions are made, is referred to and implemented by one or more of several phrases, including that the beneficiary needs "maintenance services only," has "plateaued," or is "chronic," "medically stable," or not improving. The shorthand term for this rule of thumb masquerading as a condition of coverage is the Improvement Standard.
3. The Improvement Standard is not supported by the Medicare statute or regulations. Because it has been implemented without notice-and-comment rulemaking and without publication in the Federal Register, beneficiaries have little or no understanding of its application and cannot know, and/or do not have the resources, to seek further review. Despite numerous court decisions repudiating the Improvement Standard and dictating that each beneficiary's situation should be evaluated on an individualized basis, the Improvement Standard continues to be applied, especially by employees of Medicare contractors and intermediaries who ignore the correct coverage standards. The regular, on-going application of the Improvement Standard in this context amounts to a clandestine policy that is condoned and implemented by the Secretary.
4. The impact of the Improvement Standard falls primarily on patients with chronic conditions. As their health deteriorates their need for nursing services and physical, occupational, and speech therapies increases. The skilled care denied them
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 3 of 45
under the Improvement Standard is critical to slow their disease process and to maintain their functional ability, yet these are precisely the patients who are most likely to have their coverage denied, terminated, or reduced.
5. The Improvement Standard operates as a covert condition of coverage that simultaneously deprives beneficiaries of coverage to which they are entitled while effectively denying them the ability to correct its application. It violates the Medicare statute and regulations, the Administrative Procedure Act's and the Medicare statute's requirements for notice-and-comment rulemaking, the Freedom ofInformation Act's requirement of publication, and the Due Process Clause of the Fifth Amendment.
6. On behalf of themselves, their members and constituents, and the nationwide class of Medicare beneficiaries whom they represent and who are harmed by the Improvement Standard, the plaintiffs -- national organizations and individual beneficiaries -- seek declaratory, injunctive, and mandamus relief to terminate application of the Improvement Standard and to provide remedies to those illegally denied coverage as a result of its application.
II. JURISDICTION AND VENUE 7. Jurisdiction is conferred on this court by 28 U.S.C. §§ 1331 and 1361 and by 42 U.S.C. § 405(g), as incorporated by 42 U.S.c. §§ 1395ff(b)(1)(A) and 1395w22(g)(5). Venue is proper in this district pursuant to 28 U.S.C. § 1391(e) and 42 U.S.C. § 405(g).
III. PARTIES 8. Plaintiff GLENDA JIMMO was born in 1936 and is a resident of Bristol, Vermont. At all relevant times she has been eligible for Medicare Parts A and B. A
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 4 of 45
decision by an administrative law judge, dated June 16, 2010, denied her coverage for home health services furnished to her between January 14,2007 and January 8, 2008. That decision was affirmed by the Medicare Appeals Council in a decision dated December 28, 2010.
9. PlaintiffKR was born in 1960 and is a resident of Bennington, Vermont. She is represented in this action by her guardian. At all relevant times she has been eligible for Medicare Parts A and B. A decision by an administrative law judge, dated November 16,2010, denied her coverage for home health skilled therapy services provided from September 26, 2008 to December 18, 2008. That decision was appealed to the Medicare Appeals Council on December 22,2010.
10. Plaintiff MIRIAM KATZ, the widow of David Katz, is named as the executor in his will. David Katz was born in 1920 and was a resident of Bloomfield, Connecticut before he died on December 25, 2010. At all relevant times he was eligible for Medicare Parts A and B. In a reconsideration decision on expedited review by a Qualified Independent Contractor on December 3, 2010, coverage for his skilled nursing facility care was denied beginning December 1,2010.
11. Plaintiff EDITH MASTERMAN was born in 1931 and lives in Wilton, Maine. At all relevant times she was eligible for Medicare Parts A and B. Because the only Medicare certified home health agency in her area has determined, pursuant to the Improvement Standard, that she would not be covered under Medicare for its services, she cannot receive care from that agency, obtain an initial Medicare determination that those services are not covered, or appeal the denial of Medicare coverage.
12. Plaintiff MARY PATRICIA BOITANO was born in 1927 and is a
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 5 of 45
resident of Narragansett, Rhode Island. Ms. Boitano is eligible for Medicare Parts A and B, and was at all relevant times enrolled in a Part C Medicare Advantage program, Secured Horizons (also known as "United HealthCare"). In a decision on a "fast-track" appeal on November 22,2010, Medicare coverage for her skilled nursing facility care was denied beginning November 23,2010.
13. Plaintiff NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY AND MEDICARE is a nationwide membership organization, headquartered in Washington, D.C., that seeks to protect and preserve the financial security, health, and well being of current and future generations of maturing Americans.
14. Plaintiff NATIONAL MULTIPLE SCLEROSIS SOCIETY is a nationwide organization, headquartered in New York, N.Y., that seeks to eradicate multiple sclerosis by stopping disease progression and preventing the disease in future generations, while restoring function and providing and advocating for enhanced care and support for those already affected by or living with this chronic disease.
15. Plaintiff PARKINSON'S ACTION NETWORK is a nationwide organization, headquartered in Washington, D.C., that seeks to eliminate Parkinson's disease and to improve the quality of life for people living with it.
16. Plaintiff PARALYZED VETERANS OF AMERICA is a nationwide membership organization, headquartered in Washington, D.C., that seeks to find cures for spinal cord injury and spinal disease and to improve the quality of life for its members and for all people with spinal cord injury or disease.
17. Plaintiff AMERICAN ACADEMY OF PHYSICAL MEDICINE AND REHABILITATION is a nationwide physician membership organization, headquartered
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 6 of 45
in Rosemont, Ill., that advocates on behalf of its members, whose specialty is physical medicine and rehabilitation, and on behalf of those with injuries, pain, and disabling conditions whom its members serve.
18. Plaintiff ALZHEIMER'S DISEASE AND RELATED DISORDERS ASSOCIATION, INC. d/b/a ALZHEIMER'S ASSOCIATION® is a nationwide organization, headquartered in Chicago, Illinois, that seeks to eliminate Alzheimer's disease through the advancement of research, to provide and enhance care and support for all who are affected, and to reduce the risk of dementia through the promotion of brain health.
19. Plaintiff UNITED CEREBRAL PALSY is a nationwide organization, headquartered in Washington, D.C., that seeks to advance the independence, productivity, and full citizenship of people with disabilities through an affiliate network of approximately 100 charitable nonprofit members.
20. Plaintiff ROSALIE MCGILL was born in 1918 and is a resident of Erie, Pennsylvania. At all relevant times she has been eligible for Medicare Parts A and B. In a reconsideration decision on expedited review by a Qualified Independent Contractor on December 22, 2010, coverage for her skilled nursing facility care was denied beginning December 11,2010.
21. Defendant KATHLEEN SEBELIUS is the Secretary of Health and Human Services (HHS) and is responsible for the overall operation ofthe Medicare program through the HHS division known as the Centers for Medicare & Medicaid Services (CMS). She is sued in her official capacity.
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 7 of 45
IV. CLASS ACTION ALLEGATIONS 22. Plaintiffs bring this action on behalf of themselves and all others similarly situated, pursuant to Rules 23(a) and (b)(2) of the Federal Rules of Civil Procedure. The class is defined as: All beneficiaries of Medicare Parts A, B, or C who have had or will have coverage for health care or therapy services, as an outpatient, in a hospital, in a skilled nursing facility, or in a home health care setting, denied, terminated, or reduced due to the application ofthe Improvement Standard, on or after January 1,2006. 23. Joinder is impracticable due to the large number of class members and for other reasons, including, but not limited to, their geographic diversity, their ages and/or disabilities, and their relatively low incomes. On information and belief, plaintiffs estimate the class to include at least tens of thousands of members. 24. There are questions of fact and law common to the class members. Common facts include, inter alia, that all class members have had their Medicare coverage reduced, denied, or terminated on the ground that their conditions were not improving. The common questions of law include, inter alia, whether the Secretary violates the Medicare statute in imposing this covert condition of eligibility and whether that policy has been implemented in violation of procedural rules such as the notice-andcomment requirements of the Administrative Procedure Act and the Medicare statute. 25. The claims of the named plaintiffs are typical of those of the class members in that they have been denied Medicare coverage, despite satisfying the
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 8 of 45
statute's reasonable and necessary requirement, because of the application of the Improvement Standard.
26. The named plaintiffs will fairly and adequately protect the interests of the class. They have no interest that is or may be potentially antagonistic to the interests of the class and seek the same relief as the class members, that is, a prohibition against the continued use of the Improvement Standard. Moreover, plaintiffs are represented by competent counsel from established public interest law firms, the Center for Medicare Advocacy, Inc. and the Medicare Advocacy Project of Vermont Legal Aid. The attorneys are experienced in federal litigation involving public benefit programs in general and Medicare in particular, have litigated other cases involving the Improvement Standard, and have represented classes in numerous other cases involving Medicare and other public benefit programs.
27. The Secretary has acted and continues to act on grounds generally applicable to the class as a whole, thereby making appropriate final injunctive and declaratory relief with respect to the class as a whole, pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure.
V. LEGAL FRAMEWORK
A. Overview 28. Medicare, which is codified as Title XVIII of the Social Security Act, is the federally funded and administered program of health insurance for those who are 65 and over or are disabled. Under Part A of Medicare, for which eligibility is automatic for recipients of Social Security old age and disability benefits (Title II of the Social Security Act), beneficiaries are entitled to coverage for hospital, skilled nursing facility care, home
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 9 of 45
health care, and hospice services. Part B of Medicare establishes a voluntary program of supplemental medical insurance providing coverage for physicians, nurse practitioners, home health, physical, speech and occupational therapy, diagnostic services, and durable medical equipment. Under Part C (the Medicare Advantage program), beneficiaries may opt to enroll in a managed care plan in lieu of the traditional approach in "original Medicare" as provided in Parts A and B.
29. The threshold for Medicare coverage is its medical necessity requirement, which states in applicable part that "no payment may be made ... for any expenses incurred for items or services which ... are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member." 42 U.S.C. § 1395y(a)(1)(A).
30. Other than the reference in the last clause of subsection 1395y(a)(1)(A) to coverage for "improv[ing] the functioning of a malformed body member," the Medicare statute does not state or imply at any point that improvement, or any comparable phraseology, is a condition of coverage.
B. The Regulatory Requirements 31. The relevant regulation for coverage in the skilled nursing facility (SNF) context makes it clear that the Improvement Standard does not determine coverage: "The restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities." 42 C.F.R. § 409.32(c). The regulations applicable to coverage of home health care incorporate by reference the definition of skilled nursing care and thus the
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 10 of 45
above standard. 42 C.F.R. § 409.44(b)(1). 32. The regulations further dictate, in defining the "reasonable and necessary"
standard, that the individual's "unique" situation is the cornerstone for coverage. The home health regulation states in part: "The intermediary's decision on whether care is reasonable and necessary is based on information ... concerning the unique medical condition of the individual beneficiary." 42 C.F.R. § 409.44(a). It further dictates that "[t]he determination of whether skilled nursing care is reasonable and necessary must be based solely upon the beneficiary's unique condition and individual needs, without regard to whether the illness or injury is acute, chronic, terminal, or expected to last a long time." 42 C.F.R. § 409.44(b)(3)(iii).
33. The home health regulations related to physical, speech, and occupational therapy provide for Medicare coverage for services to restore or to maintain function. 42 C.F.R. § 409.44(c)(2).
34. Many ofCMS' manual provisions support and reinforce the regulatory prohibition against an Improvement Standard as a condition of coverage. The Medicare Benefit Policy Manual (MBPM) states that the determination of whether a skilled service is reasonable and necessary cannot be based on "rules of thumb," but instead requires assessment of the particular individual's need for care. Internet Only Manual (10M) 10002, MBPM, ch. 7, §§ 20.3, 40.2. The Manual reiterates the regulatory language requiring assessment "of the beneficiary's unique condition and individual needs" and adds that "skilled care may, depending on the unique condition of the patient, continue to be
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necessary for patients whose condition is stable." Id., § 40.1.1. 35. Lower level decision-makers, however, rarely follow these regulatory and
Manual prohibitions against the Improvement Standard. Instead, they rely on other policy provisions, Medicare contractor instructions, and Local Coverage Determinations (LCOs). LCDs are created by individual contractors to provide guidance in those jurisdictions in which they operate. LCDs often employ language that enforces an Improvement Standard. See, e.g., LCD 10 # L23604 ("There must be an expectation that the condition will improve significantly in a reasonable and generally predictable period oftime ...."); LCD 10 # L340 ("The documentation supports the expectation that the beneficiary's condition will improve significantly in a reasonable and generally predictable period of time."). As a rule, lower level decision-makers will rely on more restrictive internal guidelines, policies, and LCDs rather than on contrary regulations or Manual provisions. LCDs are not binding on administrative law judges.
C. The Administrative Review Process 36. Under original Medicare (Parts A and B), a beneficiary who has been informed by the provider that the services at issue are not expected to be covered must obtain an "initial determination" from the Medicare contractor. This formal statement of non-coverage is provided as part of the Medicare Summary Notice (MSN), which the contractors issue on a quarterly basis. 37. Under the standard review process, the beneficiary requests review of the MSN "initial determination" by filing for a redetermination by the Medicare contractor.
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•
If the decision remains adverse, the beneficiary may seek reconsideration from the Qualified Independent Contractor (QIC).
38. Under the expedited review process that is available for discharge from a SNF, home health care, or a hospice, the provider must generally give notice two days before the discharge or termination occurs. The beneficiary has until noon of the next calendar day to request an expedited determination by the Quality Improvement Organization (QIO). If the QIO upholds the provider's decision, the beneficiary has until noon of the next calendar day to seek reconsideration from the QIC.
39. The remaining steps are the same for both standard and expedited review. These include a de novo review by an administrative law judge (ALl) if the amount in controversy is at least $130 in 2010 and 2011 and an on-the-record review of the ALl's decision by the Medicare Appeals Council (MAC), with the same amounts in controversy. Review in federal district court is then available for cases in which the amount in controversy is at least $1,300 in 2011.
40. For claims under Part C (the Medicare Advantage or MA program), the initial determination, which is known as an "organization determination," and the reconsideration determination, if fully favorable, are both made by the Medicare Advantage plan, in both the standard and expedited processes. When a reconsideration determination will be adverse to the beneficiary, the case is automatically sent to the Independent Review Entity (IRE), which is an external review organization hired by CMS for the purpose of reviewing decisions by MA plans and which will issue the
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reconsideration decision. 41. The remaining available steps after IRE review are the same as for Parts A
and B: ALJ, MAC, and federal district court. 42. If the MAC fails to issue its decision within the appropriate time frames
(which is usually 90 days from receipt of the request for review), the appellant may request escalation of the case to federal district court.
43. Under Parts A and B, a beneficiary cannot obtain a coverage decision prior to receiving the care. Consequently, access to and proceeding through the system of administrative review requires the beneficiary's obligation to pay for the care or services. Beneficiaries confronted with having to pay for care for which coverage may be denied often decline the needed care because their financial situation makes it difficult or impossible to pay. As a consequence, they are unable to obtain administrative review of their right to Medicare coverage. Under Part C, a beneficiary can receive a coverage decision prior to receiving the care or services at issue.
D. Application of the Improvement Standard Below the ALJ Level 44. Upon information and belief, it is the standard practice of providers, contractors, QIOs, QICs, and IREs to apply LCDs and internal guidelines and policies that establish the Improvement Standard as a rule of thumb on which Medicare coverage is conditioned, in disregard of the regulatory and manual provisions that require a coverage determination to be based on the beneficiary's individual condition and needs. This approach holds true for decisions made under each of Parts A, B, and C.
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•
45. The application of the Improvement Standard at the lower levels of review imposes an additional condition of eligibility. It has the twofold effect of denying coverage to beneficiaries who are entitled to it and discouraging them from seeking review because the Improvement Standard, as stated, appears to be impossible to overcome.
46. In 2008, only about 1.7% of all Part A denied claims and 1.8% of all Part B denied claims were appealed to the next level, the redetermination level. eMS, "Fact Sheet: Original Medicare (Fee-For-Service) Appeals Data - 2008," at 2, available at cms.gov/OrgMedFFSAppealslDownloads/Feeshet2008.pdf. Only about 0.5% of Part A denied claims and 0.22% of Part B denied claims were appealed to the reconsideration level. Id. at 6. In FY 2008, the number of all Medicare appeals taken to ALJs was 32,960, which included 185,665 claims. Office of Medicare Hearings and Appeals website, at http://www.hhs.gov/omha/resources/index.html. Estimating and extrapolating from these figures suggest that the percentage of adverse initial denials that reach the ALJ level is extremely small, probably in the range of 0.02% to 0.05%. Furthermore, the percentage of adverse initial determinations based on the Improvement Standard is probably lower still than the overall percentage because beneficiaries are less likely to appeal when the Improvement Standard is applied to them. They generally do not appeal because the Improvement Standard, as it is presented to them, suggests that they cannot succeed on appeal. Accordingly, on information and belief, only a minuscule percentage of beneficiaries who are denied based on the Improvement Standard appeal the denial to
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the ALJ level. 47. Upon information and belief, the Secretary is aware that the Improvement
Standard is consistently imposed by her Medicare contractors but has not taken action to require that the proper policies be carried out. This refusal to correct the situation has occurred despite numerous federal court decisions repudiating the Improvement Standard as a condition of coverage.
VI. FACTUAL STATEMENT Plaintiff Glenda Jimmo 48. During the periods at issue, plaintiff Glenda Jimmo was a 71-year-old resident of Vermont who was legally blind and had a below-the-knee amputation. She suffered from diabetes mellitus with circulatory disorder, transient cerebral ischemia, peripheral vascular disease, angina, and, later, diverticulitis. Transient cerebral ischemia is a serious disorder that could lead to a stroke or death of brain cells and may be caused by uncontrolled diabetes. Peripheral vascular disease is also a serious disorder with the possibility of blood clots, open sores, and tissue death. Possible complications of angina include heart attack or death. During the time periods in question, Ms. Jimmo suffered chest pains. Her physician prescribed over twenty medications to address these disorders. These medications included nitroglycerine, an overdose of which can cause seizures or a coma. 49. As a result of her substantial, disabling medical conditions, her physician ordered intermittent skilled nursing and home health aide nursing services to be provided
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in her home. Her physician certified her need for these services on the plan of care and also certified that she was homebound.
50. Her claims for Medicare coverage for the home health services received from January 14,2007 to January 8, 2008 were denied initially and at the redetermination level. In denying her coverage at redetermination, the Medicare contractor stated that "[h]er condition was stable with no acute changes."
51. At the reconsideration level of review, the QIC affirmed the denial of coverage, stating, inter alia, that "[t]he likelihood ofa change in the patient's condition requiring skilled nursing services was not supported in the documentation."
52. A timely filed request for review by an ALJ resulted in a decision dated
June 16, 201athat she was not entitled to coverage under Part A for those services. In
making that determination, the ALJ, like the lower level contractors before him, applied the Improvement Standard. He stated, inter alia, that "[0]bservation and assessment of the Beneficiary was not necessary as the Beneficiary was stable .... The Beneficiary's condition did not significantly changes [sic] during the period at issue and the plan of care did not undergo changes."
53. Plaintiff Jimmo timely appealed the ALJ decision in a request to the MAC dated August 8, 2010. The decision of the MAC was due within 90 days of the MAC's receipt of the request for review. As of December 22, 2010, the decision had not been received. Accordingly, on that date plaintiff Jimmo sent a request by Federal Express overnight mail to the MAC that the case be escalated to district court.
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54. By decision dated December 28,2010 and received by plaintiff Jimmo on December 30,2010, the MAC affirmed the decision of the ALJ. It agreed with the ALJ "that the wound care was not complex, the beneficiary was stable and seen frequently in her physician's office for lesions and debridement, and neither her condition nor the plan of care changed significantly during the period at issue." Accordingly, "[t]he Council sees no basis for changing the ALl's decision. The Council therefore adopts the ALl's decision."
Plaintiff KR 55. During the periods at issue, plaintiff KR, a resident of Vermont, was a 48year-old severely disabled woman, suffering from congenital quadriplegia, patellofemoral syndrome, epilepsy, depression, and impulse control disorder. She has significant cognitive impairments, including mental retardation. She has paralysis on her right side, and has cerebral palsy on her left side causing her left leg and hand to be weak. She requires the use of either a wheelchair or walker and needs the assistance of one and sometimes two people to go out. 56. As a result ofKR's substantial physical and mental limitations, Kenneth Roberts was duly appointed as her co-guardian by the Bennington [Vermont] District Probate Court in 1998. He has full authority to act on KR's behalf, including proceeding in this action as her representative. 57. During the months at issue, from September 26,2008, to December 18, 2008, her outings outside her home were for her medical appointments, when she was
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accompanied by her caregiver. At other times her caregiver has taken KR grocery shopping once a week when she was not ill.
58. Her physician ordered skilled physical therapy for her starting on September 26,2008. Physical therapy was ordered to evaluate her functional ability, perform therapeutic exercise, teach transfer techniques and gait training, and develop a home exercise program.
59. Her claim for Medicare coverage for these physical therapy services from September 26, 2008 through December 18, 2008 was denied initially and at the redetermination level of review.
60. At the reconsideration level of review, the QIC affirmed the denial of coverage, noting that the contractor at the redetermination level had determined that "the services failed to meet Medicare criteria for coverage because therapy services may be covered when there is a reasonable expectation that the beneficiary will show measurable improvement in performing normal daily activities." In agreeing with this assessment, the QIC held that the "submitted documentation did not support that the beneficiary had experienced an acute episode or exacerbation of chronic condition resulting in a complex functional deficit to warrant skilled therapy intervention."
61. A timely filed request for review by an ALl resulted in a decision dated November 16,2010 that she was not entitled to coverage for those services.
62. In making that decision, the ALl relied on the Improvement Standard, like the lower level contractors before him, noting that "[tjhe services must be provided with
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the expectation that the condition of the patient will improve materially in a reasonable and generally predictable period of time." Relying on that standard, the ALl held that "one cannot determine whether there is a reasonable expectation of material improvement . ... [T]he submitted documentation does not support that [KR] had experienced an acute episode or exacerbation of chronic condition resulting in a complex functional deficit to warrant skilled intervention."
63. On behalf ofplaintiffKR, a timely appeal of the ALl decision to the MAC was made by fax transmission on December 22, 2010.
Plaintiff Miriam Katz 64. Plaintiff Miriam Katz is the widow of David Katz, who died on December 25,2010. Mrs. Katz is named as the executor in her deceased husband's will. 65. David Katz, who was 90 years old and a resident of Connecticut when he died on December 25,2010, was hospitalized in November 2010 for metastatic rectal cancer and a high grade intestinal obstruction. 66. He had been in a SNF since November 19,2010. Medicare covered his stay there from November 19 through November 30,2010. 67. On November 26, 2010, plaintiff Miriam Katz received a SNF Advance Beneficiary Notice and a generic notice, both dated November 22,2010, notifying her that Mr. Katz would no longer be covered, effective after November 30, 2010. Upon her request for expedited review of that denial, she received an "Agreement Notice of Noncoverage" on December 2, 2010. Then, continuing the process of expedited review,
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she requested and received an independent reconsideration decision from the QIC dated December 3, 2010. That decision affirmed the denial of coverage because the "care you are currently receiving is considered custodial and could be performed by unskilled aides, who are trained in maintenance care."
68. Plaintiff Katz has until February 1,2011 to request ALJ review of the reconsideration decision.
Plaintiff Edith Masterman 69. Plaintiff Edith Masterman is 79 years old and lives in Maine. She has been a paraplegic since a farming accident as a teenager. As a consequence she uses a wheelchair to get around, but has been able to remain at home with help from others. She also has been diagnosed with diabetes. 70. Over the last 10 years, she has developed a problem with pressure sores. As a consequence, her wound care doctor ordered home health care for wound care. She received this care, which was covered by Medicare, on a regular basis from Androscoggin Home Care & Hospice (AHCH) until she was hospitalized in September 2009 for surgery to perform a skin graft to repair a pressure sore. 71. An infection occurred after the skin graft and she remained hospitalized until October 14,2009. Upon her release from the hospital, she was admitted to a skilled nursing facility from October 14,2009 to January 18,2010. When she finally returned home in January 2010 her physician ordered home health care, but AHCH refused to accept her back as a patient on the grounds that it "cannot accept Edith because her Medicare will not pay for a chronic problem" and she needs long term care. AHCH informed Ms. Masterman that Medicare would not cover the wound care her doctor
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ordered because Medicare does not pay for care when a wound is chronic and never expected to heal.
72. Her doctors have been and are willing to order home health care. 73. Prior to her hospitalization, Medicare covered the services provided by an AHCH nurse who came to Ms. Masterman's home every other day. After her hospitalization and because she could not obtain Medicare coverage of her home health care, Ms. Masterman originally made weekly visits to the wound care clinic at the hospital. She now visits the wound care clinic once every four weeks. 74. She receives some home care services from Elder Independence of Maine, paid for by Medicaid, which includes home health aides three times daily for about 1-1/2 to 2 hours per visit from Home Care of Maine and a once weekly skilled nursing visit from Care and Comfort. 75. AHCH is the only Medicare certified home health agency in her area. Medicare-covered home health care from AHCH would be more frequent than the care she now receives and would free her from the taxing effort and discomfort of having to go to the wound care clinic. 76. Ms. Masterman only leaves her home now for doctor or clinic appointments. Home health aides do her shopping. She cannot get in and out of bed by herself, but is able to move around her house once she is in her wheelchair. 77. Because AHCH refuses to accept her as a patient due to its belief that the Improvement Standard would deny her coverage, Ms. Masterman is not able to have a claim filed with Medicare or to obtain access to the administrative process.
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Plaintiff Mary Patricia Boitano 78. Plaintiff Mary Patricia Boitano is 83 years old and lives in Rhode Island. She was hospitalized from October 22,2010 through October 29,2010 for a gastrointestinal hemorrhage, anemia, and renal failure, which required dialysis two days per week. Prior to being hospitalized, she lived at home with her husband. 79. On October 29,2010 she was transferred to a skilled nursing facility, Roberts Health Centre. Medicare covered her stay there from October 29,2010 to November 22,2010. 80. On November 19, 2010, her husband, George Boitano, received a Notice of Non-Coverage from her Part C plan, United HealthCare, informing her that Medicare coverage for her stay in the SNF would end on November 22,2010. George Boitano appealed the decision to end Medicare coverage. 81. On November 22, 2010, upon the request for fast-track appeal, the coverage denial was affirmed. The denial affirmation was based on the determination that "[t]herapy services must ... be reasonable in relation to the expected improvement in your condition." 82. On January 13, 2011, Ms. Boitano requested that the QIO reconsider its decision. 83. On or about November 22,2010, Ms. Boitano was transferred by her family to a new SNF, West View Health Care Center. West View evaluated Ms. Boitano and determined that she required skilled nursing, physical therapy, occupational therapy and speech therapy. 84. West View requested United HealthCare to restart Medicare coverage
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based on Ms. Boitano's current skilled nursing and therapy needs. United HealthCare refused on the grounds that it had already determined that Ms. Boitano did not qualify for Medicare coverage.
85. At her own expense, Ms. Boitano remained at West View and received skilled nursing, physical therapy, occupational therapy and/or speech therapy on a daily basis from November 23,2010 through January 3,2011.
86. Ms. Boitano was readmitted to the hospital on January 3, 2011 with another gastrointestinal bleed.
Plaintiff National Committee to Preserve Social Security and Medicare 87. Plaintiff National Committee to Preserve Social Security and Medicare ("NCPSSM" or "the National Committee") is a nonpartisan, nonprofit nationwide membership organization representing millions of members and supporters nationwide. 88. The mission of the NCPSSM is to protect, preserve, promote, and ensure the financial security, health, and well-being of current and future generations of Americans. A central focus of that mission is the protection of Social Security and Medicare. Eliminating the Improvement Standard is an important aspect of that overall goal. 89. The NCPSSM works through advocacy, education, services, grassroots efforts, and the leadership of the Board of Directors, its President and Chief Executive Officer (presently, former Congresswoman Barbara B. Kennelly), and the organization's professional staff. 90. NCPSSM's work is supported through annual membership dues and contributions, and through petitions and letters signed by his members and supporters. At
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present, it has approximately 3.2 million members and supporters throughout the country, of whom virtually all are Medicare beneficiaries. Some of the NCPSSM's members who are Medicare beneficiaries have had or are having the Improvement Standard applied to them.
91. Members of the National Committee would have standing to sue in their own right. The interests that the National Committee seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive and/or mandamus relief, rather than individualized relief for its members, the participation of individual members of the National Committee is not required.
92. Via certified mail on Sept. 23, 2010, counsel for plaintiff National Committee sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of Information Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
93. The letters were received by Defendant Sebelius and by Administrator Berwick on October 4,2010. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
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Plaintiff National Multiple Sclerosis Society 94. The National Multiple Sclerosis Society (MS Society) is a nationwide organization with a 50-state network of chapters that works to eradicate multiple sclerosis by stopping disease progression and preventing the disease in future generations, while restoring function and providing and advocating for enhanced care and support for those already affected by or living with this chronic disease, including ensuring their access to quality health care, long-term care resources, and accessible, affordable insurance. 95. The MS Society accomplishes this mission by supporting comprehensive and globally collaborative research into the underlying causes, understanding, potential treatments, and ultimate prevention of multiple sclerosis, and by providing information and resources, education, and support of all kinds to people with multiple sclerosis and their families. This is accomplished in a variety of ways, including nationally-managed programs and locally-managed state programs that provide services to families: information and referrals, support groups, care consultation, research, and through educating and advocating with all appropriate agencies at the federal, state, and local levels. 96. In its effort to assist people with multiple sclerosis the MS Society works to ensure that services and benefits are available from federal programs that provide assistance to those with chronic illness and disability. As part of the MS Society'S commitment to helping people affected by multiple sclerosis, the organization focuses on four key programs: Medicare, Medicare Prescription Drug Plans (Part D of Medicare), Social Security disability, and Department of Veterans Affairs benefits. 97. In its work on Medicare, the MS Society has focused in particular on the
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Improvement Standard as a critical factor in preventing people with multiple sclerosis from obtaining the Medicare coverage and health services that they need. Consequently, the MS Society assists people who have been denied or terminated from coverage because of application of the Improvement Standard. It also has sought to convince CMS to end Medicare's reliance on the Improvement Standard.
98. The MS Society is the functional equivalent of a membership organization, as people with multiple sclerosis and their families are represented by the MS Society and are able to express their views and to protect their collective interests through it. Its 48 chapters, which combined represent the entire United States, have members who vote, and members nationwide participate in identifying priority areas of need as part of the organizational strategic planning process.
99. Many of the individuals who act through the MS Society are Medicare beneficiaries, and a large number of them have been harmed by the Improvement Standard.
100. Individuals who act through the MS Society would have standing to sue in their own right. The interests that the MS Society seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive, and/or mandamus relief, rather than individualized relief, the participation of individuals who act through the MS Society is not required.
101. Via certified mail on December 20, 2010, counsel for plaintiffMS Society sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters informed the defendant and the Administrator that
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their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom ofInformation Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
102. The letters were received by Defendant Sebelius and by Administrator Berwick on December 28,2010. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
Plaintiff Parkinson's Action Network 103. The Parkinson's Action Network (PAN) is a nationwide organization that works to eliminate Parkinson's disease and to provide better treatment for, and improve the quality of life of, people living with the disease. 104. PAN accomplishes this mission by working in partnership with other Parkinson's organizations and PAN's grassroots network of advocates in over 40 states. PAN educates the public, lawmakers, and appropriate federal agencies about the effects of Parkinson's and the need for better treatments and a cure. 105. PAN also advocates on behalf of those living with Parkinson's to ensure that benefits from federal programs, such as Social Security and Medicare, are properly made available to those who are eligible. The Improvement Standard in Medicare, which deprives Medicare beneficiaries, including those with Parkinson's, of coverage to which they are entitled, is an issue that PAN focuses on to improve the quality of life for its
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constituents. 106. PAN is the functional equivalent of a membership organization, as
individuals with Parkinson's and their families are represented by PAN and its grassroots network, and are able to express their views and to protect their collective interests through it.
107. Many of the individuals who act through PAN are Medicare beneficiaries, and a large number of them have been harmed by the Improvement Standard.
108. Individuals who act through PAN would have standing to sue in their own right. The interests that PAN seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive, and/or mandamus relief, rather than individualized relief, the participation of individuals who act through PAN is not required.
109. Via first-class mail on December 10,2010, via certified mail on December 16,2010, and via United Parcel Service (UPS) on January 6, 2011, counsel for plaintiff PAN sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of Information Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its
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present and past application." 110. The United States Post Office has no record of the letters sent by certified
mail on December 16,2010 being received. The letters sent by UPS on January 6,2011 were received by Defendant Sebelius and by Administrator Berwick on January 7, 2011. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
Plaintiff Paralyzed Veterans of America 111. Plaintiff Paralyzed Veterans of America (PVA) is a nationwide, congressionally chartered veterans service organization that has as its mission to use its expertise, developed since its founding in 1946, on behalf of armed forces veterans who have experienced spinal cord injury or dysfunction. 112. This expertise is employed to advocate for quality health care for its members, for research and education addressing spinal cord injury and dysfunction, for benefits based on its members' military service, and for civil rights, accessibility, and opportunities that maximize its members' independence. 113. PYA has almost 20,000 members, of whom over 6,200 are age 65 or over. About half ofthe PVA membership has identified Social Security benefits, either for oldage or disability, as their main source of income. About 10,500 members have nonservice-connected chronic conditions, which allow them to enroll in the Department of Veterans Affairs (VA) health care program only as low priority patients, forcing a majority of these to elect Medicare coverage, either in addition to in or instead of VA
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health care. 114. Furthermore, PVA members who are service-connected and enrolled in
the VA health care program are free to enroll in Medicare as well and seek non-VA health care providers who accept Medicare assignment.
115. Although the exact number ofPVA members who are eligible for and receiving Medicare coverage is not known, the information in the preceding paragraph indicates that thousands ofPVA members are eligible for and receiving Medicare. Since virtually all PYA members have chronic conditions, some, probably thousands, of those PVA members who are Medicare beneficiaries have had or are having the Improvement Standard applied to them.
116. Members of PVA would have standing to sue in their own right. The interests that PVA seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive and/or mandamus relief, rather than individualized relief for its members, the participation of individual members of PVA is not required.
117. Via certified mail on December 20, 2010, counsel for plaintiff PVA sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of Information Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that
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the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
118. The letters were received by Defendant Sebelius and by Administrator Berwick on December 28,2010. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
American Academy of Physical Medicine and Rehabilitation 119. Plaintiff American Academy of Physical Medicine and Rehabilitation (AAPM&R) is the premier medical society for the specialty of physical medicine and rehabilitation. It has more than 7,500 members and represents greater than 75% of Board certified physiatrists in the United States. 120. AAPM&R's core purpose is to advance its members' ability to serve patients. It seeks to advance the education, knowledge, skills, and research of its members in order to provide quality care and to represent the best interests of their patients who have or are at risk of having temporary or permanent disabilities. 121. AAPM&R carries out its vision by promoting excellence in physiatric practice and advocating on public policy issues related to persons with disabling conditions and pain. 122. Among the policy issues on which it advocates is the Improvement Standard. It is the position of the AAPM&R that the Medicare statute and regulations require that Medicare provide coverage to its enrollees for the skilled medical services
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necessary for their care and that the need for these services may exist independent of medical improvement.
123. Members of AAPM&R would have standing to sue in their own right. The interests that AAPM&R seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive and/or mandamus relief, rather than individualized relief for its members, the participation of individual members of AAPM&R is not required.
124. Via first-class mail on December 14,2010, via certified mail on December 16,2010, and via UPS on January 6,2011, counsel for plaintiff AAPM&R sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of Information Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application. "
125. The United States Post Office has no record of the letters sent by certified mail on December 16,2010 being received. The letters sent by UPS on January 6,2011 were received by Defendant Sebelius and by Administrator Berwick on January 7, 2011. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf,
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has responded to the letters. Plaintiff Alzheimer's Disease and Related Disorders Association, Inc. d/b/a Alzheimer's Association® 126. The Alzheimer's Disease and Related Disorders Association, Inc. d/b/a
Alzheimer's Association® (Alzheimer's Association or the Association) is a nationwide organization that works to eliminate Alzheimer's disease through the advancement of research, to provide and enhance care and support for all those affected, and to reduce the risk of dementia through the promotion of brain health.
127. The Alzheimer's Association accomplishes this mission by providing information, education, and support in a variety of ways. There are more than 70 local chapters across the nation, providing services within each community, and national offices in Chicago and Washington, D.C. The Association maintains a professionally staffed 24/7 Helpline offering information and advice to callers, in addition to providing information, support, and referrals through its comprehensive website at www.alz.org. The Association runs more than 4,500 support groups throughout the country, delivers thousands of educational programs annually, and connects people across the globe through its online message boards. It assists people in finding clinical studies through its free Alzheimer's Association TrialMatch service, provides a peer-reviewed research grant program to scientists (since 1982), and publishes the scientific journal Alzheimer and Dementia. It develops policy resources to educate media, decision-makers, and general consumers, and engages with elected officials at all levels of government.
128. The Alzheimer's Association has worked to improve access to quality care
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and coverage of medical services for individuals with Alzheimer's disease and related dementias. In 1998, it established a Medicare Advocacy Project to identify and address the Medicare problems encountered by beneficiaries with Alzheimer's disease and related dementias. Since the beginning of the project, denial of rehabilitation services due to the Improvement Standard has been identified as a significant issue for this population. In February 2008, the Alzheimer's Association published a Public Policy Issue Brief titled Barriers to Medicare Coverage for Occupational Therapy, Physical Therapy and Speech-Language Pathology Services for Individuals with Dementia. The authors specifically recommend that CMS clarify its manuals so that all therapies are available to beneficiaries with dementia, when those benefits can maximize function or minimize deterioration in function. Since 2003, the Alzheimer's Association has participated in meetings with CMS to attempt to resolve the problem, but to no avail.
129. Founded in 1980, the Alzheimer's Association is the leading voluntary health organization in Alzheimer care, support, and research. It has grown to encompass a nationwide network including the national headquarters in Chicago, its public policy office in Washington D.C., and more than 70 state chapters and 300 local points of service. They represent the more than five million Americans with the disease and their families to all levels of government, as well as health care and long-term care providers.
130. Many of the individuals who act through the Alzheimer's Association are Medicare beneficiaries, and a large number of them have been harmed by the Improvement Standard. Among those are Mrs. A. and Mrs. B. Mrs. A, who has
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dementia, broke her hip. She was hospitalized and had surgery to repair the broken bone. Following the surgery her confusion seemed worse, possibly due to delirium. She was admitted to a rehabilitation facility for physical therapy. After Mrs. A had received two weeks of physical therapy, her daughter was informed that Medicare would not cover the therapy because Mrs. A. does not follow directions well enough and she cannot be restored to her previous function. The facility insisted on stopping therapy and admitted her to long-term care with no goal to ambulate. Mrs. 8., who has Alzheimer's disease, was hospitalized and then sent to a nursing facility for recuperation. In both instances, her doctor had recommended 30-90 days physical therapy. In both institutions, however, Medicare payments were stopped for physical therapy within a few days because she did not show "the recommended progress" for physical therapy instructions. The physical therapists were adamant that there were no exceptions to this Medicare rule, even with appeals made.
131. Individuals who act through the Alzheimer's Association would have standing to sue in their own right. The interests that the Alzheimer's Association seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive, and/or mandamus relief, rather than individualized relief, the participation of individuals who act through the Alzheimer's Association is not required.
132. Via certified mail on February 11, 2011, counsel for plaintiff Alzheimer's Association sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the
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CMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of Information Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
133. The letters were received by Defendant Sebelius and by Administrator Berwick on February 14,2011. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
Plaintiff United Cerebral Palsy 134. United Cerebral Palsy (UCP), which was founded in 1949, is a nationwide organization that strives to ensure a life without limits for people with disabilities, including cerebral palsy. 135. UCP accomplishes its mission through an affiliate network that includes 93 local service providers in the United States, which reach 176,000 individuals and their families daily with direct services. The services provided by the affiliates include direct services and supports such as day programs, health care, in-home community supports, supportive employment, assistive technology, housing, and transportation. Additionally, UCP and its affiliates provide advocacy, public education, and information and referral. 136. The national office ofUCP engages in extensive public advocacy representing the interests of people with disabilities, advances federal disability policy,
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provides information and referral, and develops forward-thinking initiatives and programs.
137. In its public policy work, VCP seeks to ensure that individuals with disabilities who are eligible for Medicare receive the full coverage to which they are entitled. As an aspect of this work, VCP and its affiliate members seek to assist people who have been denied or terminated from coverage because of application of the Improvement Standard. VCP has also sought to end Medicare's reliance on the Improvement Standard.
138. VCP is the functional equivalent of a membership organization, as people with cerebral palsy and their families are represented by VCP and are able to express their views and to protect their collective interests through it. Its affiliates, which have individual members, have voting rights and participate in identifying priority areas of need as part of the organizational structure.
139. Many ofthe individuals who receive support and services from VCP and its affiliates are Medicare beneficiaries, and a large number of them have been harmed by the Improvement Standard.
140. Individuals who act through VCP would have standing to sue in their own right. The interests that V CP seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive, and/or mandamus relief, rather than individualized relief, the participation of individuals who act through VCP is not required.
141. Via certified mail on February 17,2011, counsel for plaintiffVCP sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS
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Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom ofInformation Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
142. The letters were received by Defendant Sebelius and by Administrator Berwick on February 18,2011. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
Plaintiff Rosalie McGill 143. Rosalie McGill is 92 years old and lives in Pennsylvania. Mrs. McGill has a history of pulmonary fibrosis, osteoporosis, rheumatoid arthritis, aortic insufficiency, hypertension, and tibial fracture. Prior to October 3, 2010, Mrs. McGill lived at her own home and was able to ambulate with a pulmonary walker. 144. On or about October 3,2010, Mrs. McGill suffered a stroke. Mrs. McGill was hospitalized from October 3, 2010 until October 5,2010. From on or about October 5,2010 until October 28, 2010, Mrs. McGill was in Healthsouth Rehabilitation Hospital of Erie, an acute rehabilitation facility. 145. On October 28, 2010, Mrs. McGill was transferred to Sarah A. Reed Retirement Center, a skilled nursing facility. Medicare covered her stay there from October 28,2010 until December 10,2010.
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 39 of 45
146. On October 28, 2010, a Plan of Treatment for Mrs. McGill established the following therapies: physical therapy five times a week for ninety days, occupational therapy five times a week for ninety days, and speech therapy five times a week for four weeks.
147. On December 7, 2010, Maurice McGill, Mrs. McGill's son, received oral notice that Medicare coverage for Mrs. McGill's stay in the SNF would end on December 10,2010. On December 7, 2010, Mrs. McGill's daughter, Patricia McGill, appealed the decision to end Medicare coverage.
148. On December 9, 2010, the Quality Improvement Organization upheld the non-coverage determination and verbally notified Patricia McGill of the decision.
149. On December 9,2010, Patricia McGill requested an expedited reconsideration of the QIO decision. On December 21,2010, Patricia McGill sent additional documentation to Maximus, the Qualified Independent Contractor, to consider when rendering its decision. The additional documents consisted of a personal statement and a physician's statement. The physician's statement requested coverage for 60 days of occupational and physical therapy services. In making this request, Mrs. McGill's physician stated that "it is my medical opinion beyond a reasonable degree of medical certainty, that more therapy would be helpful. She needs more work in use of her right upper extremity and in her transferring ability."
150. On December 22, 2010, Maximus issued an unfavorable decision. The decision affirmed the denial of coverage because "[Mrs. McGill] has reached a plateau
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 40 of 45
with her functional ability and she is no longer making continued progress." In addition, the decision stated that Mrs. McGill was receiving custodial care which "could be performed by unskilled aides, who are trained in maintenance care."
151. On February 17,2011, Mrs. McGill requested an ALl review of the reconsideration decision.
VII. INADEQUACY OF REMEDY AT LAW AND PROPRIETY OF ISSUANCE OF A WRIT OF MANDAMUS
152. Plaintiffs suffer irreparable injury by reason of defendants' actions complained of herein. Not only are they deprived of Medicare coverage that is crucial to their health and well-being, but they also effectively lose the right to challenge that denial of coverage.
153. Plaintiffs have no adequate remedy at law. Only the declaratory, injunctive, and mandamus relief that this Court can provide will fully redress the wrongs done to plaintiffs.
154. Plaintiffs have a clear right to the relief sought. There is no other adequate remedy available to correct an otherwise unreviewable defect not related to a claim for benefits. The defendant has a plainly defined and nondiscretionary duty to provide the relief that plaintiffs seek.
VIII. FIRST CAUSE OF ACTION: VIOLATION OF THE MEDICARE STATUTE AND REGULATIONS
155. Application of the Improvement Standard to deny coverage violates the Medicare statute, and in particular its medical necessity requirement, 42 U.S.C. § 1395y(a)(I)(A), its implementing regulations, 42 C.F.R. §§ 409.32(c), 409.44(b)(l),
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409.44(a), 409.44(b)(3)(iii), and 409.44(c)(2)(iii), and the Medicare Benefit Policy Manual.
IX. SECOND CAUSE OF ACTION: VIOLATION OF THE PROCEDURAL REQUIREMENTS OF THE MEDICARE STATUTE
156. The Medicare statute prohibits the promulgation of a rule that "establishes or changes a substantive legal standard governing the scope of benefits, the payment for services, or the eligibility of individuals ... to ... receive services or benefits under this subchapter ... unless it is promulgated by the Secretary" through notice-and-comment rulemaking. 42 U.S.C. § 1395hh(a)(2). As a rule applied to Medicare beneficiaries to deny them coverage, the Improvement Standard violates this notice-and-comment requirement of the Medicare statute, which renders the rule void and of no force and effect.
X. THIRD CAUSE OF ACTION: VIOLATION OF THE ADMINISTRATIVE PROCEDURE ACT
157. The Administrative Procedure Act prohibits rulemaking without first publishing the rule in proposed form and allowing members of the public an opportunity to comment on the proposed rule. 5 U.S.C. § 553. As a rule applied to Medicare beneficiaries to deny them coverage, the Improvement Standard violates those noticeand-comment requirements of the Administrative Procedure Act, which renders the rule void and of no force and effect.
XI. FOURTH CAUSE OF ACTION: VIOLATION OF THE FREEDOM OF INFORMATION ACT
158. The Freedom of Information Act requires publication in the Federal Register "of substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and
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Case 5:11-cv-00017-cr Document 13 Filed 03/03/11 Page 42 of 45
adopted by the agency." 5 U.S.C. § 552(a)(I)(D). The Improvement Standard meets this criterion, but it has not been published in the Federal Register. Accordingly, it cannot be applied, and the rule is void and of no force and effect.
XII. FIFTH CAUSE OF ACTION: VIOLATION OF THE DUE PROCESS CLAUSE
159. The application of an improper standard to deny coverage contrary to the Medicare Act and controlling regulations violates the Due Process Clause of the Fifth Amendment.
XIII. SIXTH CAUSE OF ACTION: VIOLATION OF THE DUE PROCESS CLAUSE
160. The application of the Improvement Standard primarily at levels of review below the ALl level and with the pretense that it is a proper condition of coverage has the effect of discouraging or preventing beneficiaries from seeking review at which the correct standard would more likely be applied. It therefore acts to deprive beneficiaries of their right to review in violation of the Due Process Clause of the Fifth Amendment.
XIV. PRAYER FOR RELIEF Wherefore, Plaintiffs respectfully pray that this Court: 1. Assume jurisdiction over this action. 2. Certify at an appropriate time that this suit is properly maintainable as a class action pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure. 3. Declare that defendant's application of the Improvement Standard in Medicare coverage decisions violates the Medicare statute and regulations, the noticeand-comment requirements of the Medicare statute and the Administrative Procedure Act, the publication requirement of the Freedom ofInformation Act, and the Due Process
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•
Clause of the Fifth Amendment. 4. Grant a permanent injunction and/or an order of mandamus a. prohibiting defendant, her successors in office, her agents,
employees, and all persons acting in concert with her from applying the Improvement Standard to make Medicare coverage decisions;
b. ordering defendant, her successors in office, her agents, employees, and all persons acting in concert with her to review all adverse coverage decisions for the named plaintiffs and class members that rely on the Improvement Standard and to reissue those decisions without application of the Improvement Standard;
c. ordering defendant, her successors in office, her agents, employees, and all persons acting in concert with her to revise any rules, provisions, guidelines, directives, or other written material under her control that supports and/or applies the Improvement Standard;
d. ordering defendant, her successors in office, her agents, employees, and all persons acting in concert with her to direct all entities that render Medicare coverage decisions at any level (i) to correct any internal guidelines, directives, or other written material for employees that support and apply the Improvement Standard and (ii) to educate employees as to the correct approach to coverage decisions, without regard to an Improvement Standard, as indicated by the Medicare Act and controlling regulations; and
e. ordering defendant, her successors in office, her agents, employees, and all persons acting in concert with her to monitor all entities that render Medicare coverage decisions as to their progress in eliminating the Improvement
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Standard as a basis for coverage decisions. Plaintiffs pray in addition: 5. For costs of the suit herein. 6. For reasonable attorneys' fees and expenses pursuant to the Equal Access
to Justice Act, 28 U.S.C. § 2412. 7. For such other and further relief as the Court deems just and proper.

DATED: March 3,2011

Respectfully submitted,
(1).:\\ O~(:rJ ,IfV' '>
GIll Deford Judith A. Stein Margaret Murphy Wey-Wey Kwok Nancy V. Gifford Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 (860) 456-7790
Toby S. Edelman Center for Medicare Advocacy, Inc. 1025 Connecticut Ave., N.W., Suite 709 Washington, D.C. 20036 (202) 293-5760
Michael Benvenuto Devon Green Medicare Advocacy Project Vermont Legal Aid, Inc. P.O. Box 1367 Burlington, VT 05402 (802) 863-5620
Attorneys for Plaintiffs

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•

CERTIFICATE OF SERVICE
This is to certify that, on March 3, 2011, I caused to be mailed, by first class, postage prepaid mail, copies of the Amended Complaint, addressed to:
Kevin J. Doyle Assistant United States Attorney P.O. Box 570 Burlington, VT 05402-0570

Steven Y. Bressler U.S. Dept. of Justice Civil Division Federal Programs Branch 20 Massachusetts Ave., NW Washington, DC 20530

(Y'{'f)~
Michael Benvenuto

45

 
 Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 1 of 37

UNITED STATES DISTRICT COURT?
DISTRICT OF VERMONT LO!!

JJ~!'t,l.1

18

Pr112: 06

GLENDA JIMMO, KR by her guardian

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KENNETH ROBERTS, MIRIAM KATZ,

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EDITH MASTERMAN, MARY PATRICIA

)

BOITANO, NATIONAL COMMITTEE TO

)

PRESERVE SOCIAL SECURITY AND

)

MEDICARE, NATIONAL MULTIPLE

)

SCLEROSIS SOCIETY, PARKINSON'S

)

ACTION NETWORK, PARALYZED

)

VETERANS OF AMERICA, and AMERICAN )

ACADEMY OF PHYSICAL MEDICINE AND )

REHABILITATION, on behalf of themselves

)

and all others similarly situated,

)

)

)

Plaintiffs,

)

)

vs.

)

)

)

KATHLEEN SEBELIUS, Secretary of

)

Health and Human Services,

)

)

Defendant.

)

)

"I1 .....",........-._~...,........' ".~"~,.~ _ ........ '"
Civil Action No.
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COMPLAINT FOR DECLARATORY, INJUNCTIVE, AND MANDAMUS RELIEF
CLASS ACTION

I. PRELIMINARY STATEMENT 1. This is an action for declaratory, injunctive, and mandamus relief against the Secretary of Health and Human Services (the Secretary) as the official responsible for implementing and enforcing the Medicare program. Under the Medicare statute and regulations, coverage is available for health care and therapy services that are "reasonable and necessary for the diagnosis or treatment of illness or injury." This standard requires the evaluation for coverage on the basis of a beneficiary'S unique condition and

Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 2 of 37
individual needs. The Secretary, however, imposes a covert rule of thumb that operates as an additional and illegal condition of coverage and results in the termination, reduction, or denial of coverage for thousands of Medicare beneficiaries annually.
2. This additional condition of eligibility, which is usually implemented at the lower levels of Medicare's administrative review process where the overwhelming majority of decisions are made, is referred to and implemented by one or more of several phrases, including that the beneficiary needs "maintenance services only," has "plateaued," or is "chronic," "medically stable," or not improving. The shorthand term for this rule of thumb masquerading as a condition of coverage is the Improvement Standard.
3. The Improvement Standard is not supported by the Medicare statute or regulations. Because it has been implemented without notice-and-comment rulemaking and without publication in the Federal Register, beneficiaries have little or no understanding of its application and cannot know, andlor do not have the resources, to seek further review. Despite numerous court decisions repudiating the Improvement Standard and dictating that each beneficiary's situation should be evaluated on an individualized basis, the Improvement Standard continues to be applied, especially by employees of Medicare contractors and intermediaries who ignore the correct coverage standards. The regular, on-going application of the Improvement Standard in this context amounts to a clandestine policy that is condoned and implemented by the Secretary.
4. The impact of the Improvement Standard falls primarily on patients with chronic conditions. As their health deteriorates their need for nursing services and physical, occupational, and speech therapies increases. The skilled care denied them
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 3 of 37
under the Improvement Standard is critical to slow their disease process and to maintain their functional ability, yet these are precisely the patients who are most likely to have their coverage denied, terminated, or reduced.
S. The Improvement Standard operates as a covert condition of coverage that simultaneously deprives beneficiaries of coverage to which they are entitled while effectively denying them the ability to correct its application. It violates the Medicare statute and regulations, the Administrative Procedure Act's and the Medicare statute's requirements for notice-and-comment rulemaking, the Freedom of Information Act's requirement of publication, and the Due Process Clause of the Fifth Amendment.
6. On behalf of themselves, their members and constituents, and the nationwide class of Medicare beneficiaries whom they represent and who are harmed by the Improvement Standard, the plaintiffs -- national organizations and individual beneficiaries -- seek declaratory, injunctive, and mandamus relief to terminate application of the Improvement Standard and to provide remedies to those illegally denied coverage as a result of its application.
II. JURISDICTION AND VENUE 7. Jurisdiction is conferred on this court by 28 U.S.C. §§ 1331 and 1361 and by 42 U.S.C. § 40S(g), as incorporated by 42 U.S.C. §§ 139Sff(b)(1)(A) and 139Sw22(g)(S). Venue is proper in this district pursuant to 28 U.S.C. § 1391(e) and 42 U.S.C. § 40S(g).
III. PARTIES 8. Plaintiff GLENDA JIMMO was born in 1936 and is a resident of Bristol, Vermont. At all relevant times she has been eligible for Medicare Parts A and B. A
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 4 of 37
decision by an administrative law judge, dated June 16, 2010, denied her coverage for home health services furnished to her between January 14,2007 and January 8, 2008. That decision was affirmed by the Medicare Appeals Council in a decision dated December 28,2010.
9. PlaintiffKR was born in 1960 and is a resident of Bennington, Vermont. She is represented in this action by her guardian. At all relevant times she has been eligible for Medicare Parts A and B. A decision by an administrative law judge, dated November 16,2010, denied her coverage for home health skilled therapy services provided from September 26, 2008 to December 18, 2008. That decision was appealed to the Medicare Appeals Council on December 22, 2010.
10. Plaintiff MIRIAM KATZ, the widow of David Katz, is named as the executor in his will. David Katz was born in 1920 and was a resident of Bloomfield, Connecticut before he died on December 25,2010. At all relevant times he was eligible for Medicare Parts A and B. In a reconsideration decision on expedited review by a Qualified Independent Contractor on December 3, 2010, coverage for his skilled nursing facility care was denied beginning December 1,2010.
11. Plaintiff EDITH MASTERMAN was born in 1931 and lives in Wilton, Maine. At all relevant times she was eligible for Medicare Parts A and B. Because the only Medicare certified home health agency in her area has determined, pursuant to the Improvement Standard, that she would not be covered under Medicare for its services, she cannot receive care from that agency, obtain an initial Medicare determination that those services are not covered, or appeal the denial of Medicare coverage.
12. Plaintiff MARY PATRICIA BOITANO was born in 1927 and is a
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resident of Narragansett, Rhode Island. Ms. Boitano is eligible for Medicare Parts A and B, and was at all relevant times enrolled in a Part C Medicare Advantage program, Secured Horizons (also known as "United HealthCare"). In a decision on a "fast-track" appeal on November 22,2010, Medicare coverage for her skilled nursing facility care was denied beginning November 23,2010.
13. Plaintiff NATIONAL COMMITTEE TO PRESERVE SOCIAL SECURITY AND MEDICARE is a nationwide membership organization, headquartered in Washington, D.C., that seeks to protect and preserve the financial security, health, and well being of current and future generations of maturing Americans.
14. Plaintiff NATIONAL MULTIPLE SCLEROSIS SOCIETY is a nationwide organization, headquartered in New York, N.Y., that seeks to eradicate multiple sclerosis by stopping disease progression and preventing the disease in future generations, while restoring function and providing and advocating for enhanced care and support for those already affected by or living with this chronic disease.
15. Plaintiff PARKINSON'S ACTION NETWORK is a nationwide organization, headquartered in Washington, D.C., that seeks to eliminate Parkinson's disease and to improve the quality of life for people living with it.
16. Plaintiff PARALYZED VETERANS OF AMERICA is a nationwide membership organization, headquartered in Washington, D.C., that seeks to find cures for spinal cord injury and spinal disease and to improve the quality of life for its members and for all people with spinal cord injury or disease.
17. Plaintiff AMERICAN ACADEMY OF PHYSICAL MEDICINE AND REHABILITATION is a nationwide physician membership organization, headquartered
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in Rosemont, Ill., that advocates on behalf of its members, whose specialty is physical medicine and rehabilitation, and on behalf of those with injuries, pain, and disabling conditions whom its members serve.
18. Defendant KATHLEEN SEBELIUS is the Secretary of Health and Human Services (HHS) and is responsible for the overall operation of the Medicare program through the HHS division known as the Centers for Medicare & Medicaid Services (CMS). She is sued in her official capacity.
IV. CLASS ACTION ALLEGATIONS 19. Plaintiffs bring this action on behalf of themselves and all others similarly situated, pursuant to Rules 23(a) and (b)(2) of the Federal Rules of Civil Procedure. The class is defined as: All beneficiaries of Medicare Parts A, B, or C who have had or will have coverage for health care or therapy services, as an outpatient, in a hospital, in a skilled nursing facility, or in a home health care setting, denied, terminated, or reduced due to the application of the Improvement Standard, on or after January 1,2006. 20. Joinder is impracticable due to the large number of class members and for other reasons, including, but not limited to, their geographic diversity, their ages and/or disabilities, and their relatively low incomes. On information and belief, plaintiffs estimate the class to include at least tens of thousands of members. 21. There are questions of fact and law common to the class members. Common facts include, inter alia, that all class members have had their Medicare
6

Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 7 of 37
coverage reduced, denied, or terminated on the ground that their conditions were not improving. The common questions of law include, inter alia, whether the Secretary violates the Medicare statute in imposing this covert condition of eligibility and whether that policy has been implemented in violation of procedural rules such as the notice-andcomment requirements of the Administrative Procedure Act and the Medicare statute.
22. The claims of the named plaintiffs are typical of those of the class members in that they have been denied Medicare coverage, despite satisfying the statute's reasonable and necessary requirement, because of the application of the Improvement Standard.
23. The named plaintiffs will fairly and adequately protect the interests of the class. They have no interest that is or may be potentially antagonistic to the interests of the class and seek the same relief as the class members, that is, a prohibition against the continued use of the Improvement Standard. Moreover, plaintiffs are represented by competent counsel from established public interest law firms, the Center for Medicare Advocacy, Inc. and the Medicare Advocacy Project of Vermont Legal Aid. The attorneys are experienced in federal litigation involving public benefit programs in general and Medicare in particular, have litigated other cases involving the Improvement Standard, and have represented classes in numerous other cases involving Medicare and other public benefit programs.
24. The Secretary has acted and continues to act on grounds generally applicable to the class as a whole, thereby making appropriate final injunctive and declaratory relief with respect to the class as a whole, pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure.
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v. LEGAL FRAMEWORK
A. Overview 25. Medicare, which is codified as Title XVIII of the Social Security Act, is the federally funded and administered program of health insurance for those who are 65 and over or are disabled. Under Part A of Medicare, for which eligibility is automatic for recipients of Social Security old age and disability benefits (Title II of the Social Security Act), beneficiaries are entitled to coverage for hospital, skilled nursing facility care, home health care, and hospice services. Part B of Medicare establishes a voluntary program of supplemental medical insurance providing coverage for physicians, nurse practitioners, home health, physical, speech and occupational therapy, diagnostic services, and durable medical equipment. Under Part C (the Medicare Advantage program), beneficiaries may opt to enroll in a managed care plan in lieu of the traditional approach in "original Medicare" as provided in Parts A and B. 26. The threshold for Medicare coverage is its medical necessity requirement, which states in applicable part that "no payment may be made ... for any expenses incurred for items or services which ... are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member." 42 U.S.c. § 1395y(a)(l)(A). 27. Other than the reference in the last clause of subsection 1395y(a)(l )(A) to coverage for "improv[ing] the functioning of a malformed body member," the Medicare statute does not state or imply at any point that improvement, or any comparable phraseology, is a condition of coverage.
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B. The Regulatory Requirements 28. The relevant regulation for coverage in the skilled nursing facility (SNF) context makes it clear that the Improvement Standard does not determine coverage: "The restoration potential of a patient is not the deciding factor in determining whether skilled services are needed. Even if full recovery or medical improvement is not possible, a patient may need skilled services to prevent further deterioration or preserve current capabilities." 42 C.F.R. § 409.32(c). The regulations applicable to coverage of home health care incorporate by reference the definition of skilled nursing care and thus the above standard. 42 C.F.R. § 409.44(b)(1). 29. The regulations further dictate, in defining the "reasonable and necessary" standard, that the individual's "unique" situation is the cornerstone for coverage. The home health regulation states in part: "The intermediary's decision on whether care is reasonable and necessary is based on information ... concerning the unique medical condition ofthe individual beneficiary." 42 C.F.R. § 409.44(a). It further dictates that "[t]he determination of whether skilled nursing care is reasonable and necessary must be based solely upon the beneficiary'S unique condition and individual needs, without regard to whether the illness or injury is acute, chronic, terminal, or expected to last a long time." 42 C.F.R. § 409.44(b)(3)(iii). 30. The home health regulations related to physical, speech, and occupational therapy provide for Medicare coverage for services to restore or to maintain function. 42 C.F.R. § 409.44(c)(2). 31. Many of CMS' manual provisions support and reinforce the regulatory
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 10 of 37
prohibition against an Improvement Standard as a condition of coverage. The Medicare Benefit Policy Manual (MBPM) states that the determination of whether a skilled service is reasonable and necessary cannot be based on "rules of thumb," but instead requires assessment of the particular individual's need for care. Internet Only Manual (lOM) 10002, MBPM, ch. 7, §§ 20.3, 40.2. The Manual reiterates the regulatory language requiring assessment "of the beneficiary's unique condition and individual needs" and adds that "skilled care may, depending on the unique condition of the patient, continue to be necessary for patients whose condition is stable." ld., § 40.1.1.
32. Lower level decision-makers, however, rarely follow these regulatory and Manual prohibitions against the Improvement Standard. Instead, they rely on other policy provisions, Medicare contractor instructions, and Local Coverage Determinations (LCDs). LCDs are created by individual contractors to provide guidance in those jurisdictions in which they operate. LCDs often employ language that enforces an Improvement Standard. See, e.g., LCD ID # L23604 ("There must be an expectation that the condition will improve significantly in a reasonable and generally predictable period of time ...."); LCD ID # L340 ("The documentation supports the expectation that the beneficiary'S condition will improve significantly in a reasonable and generally predictable period of time."). As a rule, lower level decision-makers will rely on more restrictive internal guidelines, policies, and LCDs rather than on contrary regulations or Manual provisions. LCDs are not binding on administrative law judges.
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C. The Administrative Review Process 33. Under original Medicare (Parts A and B), a beneficiary who has been informed by the provider that the services at issue are not expected to be covered must obtain an "initial determination" from the Medicare contractor. This formal statement of non-coverage is provided as part of the Medicare Summary Notice (MSN), which the contractors issue on a quarterly basis. 34. Under the standard review process, the beneficiary requests review of the MSN "initial determination" by filing for a redetermination by the Medicare contractor. If the decision remains adverse, the beneficiary may seek reconsideration from the Qualified Independent Contractor (QIC). 35. Under the expedited review process that is available for discharge from a SNF, home health care, or a hospice, the provider must generally give notice two days before the discharge or termination occurs. The beneficiary has until noon of the next calendar day to request an expedited determination by the Quality Improvement Organization (QIO). If the QIO upholds the provider's decision, the beneficiary has until noon of the next calendar day to seek reconsideration from the QIC. 36. The remaining steps are the same for both standard and expedited review. These include a de novo review by an administrative law judge (ALl) if the amount in controversy is at least $130 in 2010 and 2011 and an on-the-record review of the ALl's decision by the Medicare Appeals Council (MAC), with the same amounts in controversy. Review in federal district court is then available for cases in which the
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amount in controversy is at least $1,300 in 2011. 37. For claims under Part C (the Medicare Advantage or MA program), the
initial determination, which is known as an "organization determination," and the reconsideration determination, if fully favorable, are both made by the Medicare Advantage plan, in both the standard and expedited processes. When a reconsideration determination will be adverse to the beneficiary, the case is automatically sent to the Independent Review Entity (IRE), which is an external review organization hired by CMS for the purpose of reviewing decisions by MA plans and which will issue the reconsideration decision.
38. The remaining available steps after IRE review are the same as for Parts A and B: ALl, MAC, and federal district court.
39. If the MAC fails to issue its decision within the appropriate time frames (which is usually 90 days from receipt of the request for review), the appellant may request escalation of the case to federal district court.
40. Under Parts A and B, a beneficiary cannot obtain a coverage decision prior to receiving the care. Consequently, access to and proceeding through the system of administrative review requires the beneficiary's obligation to pay for the care or services. Beneficiaries confronted with having to pay for care for which coverage may be denied often decline the needed care because their financial situation makes it difficult or impossible to pay. As a consequence, they are unable to obtain administrative review of their right to Medicare coverage. Under Part C, a beneficiary can receive a coverage
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decision prior to receiving the care or services at issue. D. Application of the Improvement Standard Below the ALJ Level 41. Upon information and belief, it is the standard practice of providers,
contractors, QIOs, QICs, and IREs to apply LCDs and internal guidelines and policies that establish the Improvement Standard as a rule of thumb on which Medicare coverage is conditioned, in disregard of the regulatory and manual provisions that require a coverage determination to be based on the beneficiary's individual condition and needs. This approach holds true for decisions made under each of Parts A, B, and C.
42. The application of the Improvement Standard at the lower levels of review imposes an additional condition of eligibility. It has the twofold effect of denying coverage to beneficiaries who are entitled to it and discouraging them from seeking review because the Improvement Standard, as stated, appears to be impossible to overcome.
43. In 2008, only about 1.7% of all Part A denied claims and 1.8% of all Part B denied claims were appealed to the next level, the redetermination level. CMS, "Fact Sheet: Original Medicare (Fee-For-Service) Appeals Data - 2008," at 2, available at cms.gov/OrgMedFFSAppeals/Downloads/Feeshet2008.pdf. Only about 0.5% of Part A denied claims and 0.22% of Part B denied claims were appealed to the reconsideration level. Id. at 6. In FY 2008, the number of all Medicare appeals taken to ALJs was 32,960, which included 185,665 claims. Office of Medicare Hearings and Appeals website, at http://www.hhs.gov/omha/resources/index.html. Estimating and extrapolating
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from these figures suggest that the percentage of adverse initial denials that reach the ALJ level is extremely small, probably in the range of 0.02% to 0.05%. Furthermore, the percentage of adverse initial determinations based on the Improvement Standard is probably lower still than the overall percentage because beneficiaries are less likely to appeal when the Improvement Standard is applied to them. They generally do not appeal because the Improvement Standard, as it is presented to them, suggests that they cannot succeed on appeal. Accordingly, on information and belief, only a minuscule percentage of beneficiaries who are denied based on the Improvement Standard appeal the denial to the ALJ level.
44. Upon information and belief, the Secretary is aware that the Improvement Standard is consistently imposed by her Medicare contractors but has not taken action to require that the proper policies be carried out. This refusal to correct the situation has occurred despite numerous federal court decisions repudiating the Improvement Standard as a condition of coverage.
VI. FACTUAL STATEMENT Plaintiff Glenda Jimmo 45. During the periods at issue, plaintiff Glenda Jimmo was a 71-year-old resident of Vermont who was legally blind and had a below-the-knee amputation. She suffered from diabetes mellitus with circulatory disorder, transient cerebral ischemia, peripheral vascular disease, angina, and, later, diverticulitis. Transient cerebral ischemia is a serious disorder that could lead to a stroke or death of brain cells and may be caused
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by uncontrolled diabetes. Peripheral vascular disease is also a serious disorder with the possibility of blood clots, open sores, and tissue death. Possible complications of angina include heart attack or death. During the time periods in question, Ms. Jimmo suffered chest pains. Her physician prescribed over twenty medications to address these disorders. These medications included nitroglycerine, an overdose of which can cause seizures or a coma.
46. As a result of her substantial, disabling medical conditions, her physician ordered intermittent skilled nursing and home health aide nursing services to be provided in her home. Her physician certified her need for these services on the plan of care and also certified that she was homebound.
47. Her claims for Medicare coverage for the home health services received from January 14,2007 to January 8, 2008 were denied initially and at the redetermination level. In denying her coverage at redetermination, the Medicare contractor stated that "[h]er condition was stable with no acute changes."
48. At the reconsideration level of review, the QIC affirmed the denial of coverage, stating, inter alia, that "[t]he likelihood of a change in the patient's condition requiring skilled nursing services was not supported in the documentation."
49. A timely filed request for review by an ALJ resulted in a decision dated June 16, 2010 that she was not entitled to coverage under Part A for those services. In making that determination, the ALJ, like the lower level contractors before him, applied the Improvement Standard. He stated, inter alia, that "[0]bservation and assessment of
15

Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 16 of 37
the Beneficiary was not necessary as the Beneficiary was stable.... The Beneficiary's condition did not significantly changes [sic] during the period at issue and the plan of care did not undergo changes."
50. Plaintiff limmo timely appealed the ALl decision in a request to the MAC dated August 8, 2010. The decision of the MAC was due within 90 days of the MAC's receipt ofthe request for review. As of December 22,2010, the decision had not been received. Accordingly, on that date plaintiff lirnrno sent a request by Federal Express overnight mail to the MAC that the case be escalated to district court.
51. By decision dated December 28, 2010 and received by plaintiff limmo on December 30,2010, the MAC affirmed the decision of the ALl. It agreed with the ALl "that the wound care was not complex, the beneficiary was stable and seen frequently in her physician's office for lesions and debridement, and neither her condition nor the plan of care changed significantly during the period at issue." Accordingly, "[t]he Council sees no basis for changing the ALl's decision. The Council therefore adopts the ALl's decision."
Plaintiff KR 52. During the periods at issue, plaintiff KR, a resident of Vermont, was a 48year-old severely disabled woman, suffering from congenital quadriplegia, patellofemoral syndrome, epilepsy, depression, and impulse control disorder. She has significant cognitive impairments, including mental retardation. She has paralysis on her right side, and has cerebral palsy on her left side causing her left leg and hand to be weak. She
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 17 of 37
requires the use of either a wheelchair or walker and needs the assistance of one and sometimes two people to go out.
53. As a result ofKR's substantial physical and mental limitations, Kenneth Roberts was duly appointed as her co-guardian by the Bennington [Vermont] District Probate Court in 1998. He has full authority to act on KR's behalf, including proceeding in this action as her representative.
54. During the months at issue, from September 26, 2008, to December 18, 2008, her outings outside her home were for her medical appointments, when she was accompanied by her caregiver. At other times her caregiver has taken KR grocery shopping once a week when she was not ill.
55. Her physician ordered skilled physical therapy for her starting on September 26,2008. Physical therapy was ordered to evaluate her functional ability, perform therapeutic exercise, teach transfer techniques and gait training, and develop a home exercise program.
56. Her claim for Medicare coverage for these physical therapy services from September 26, 2008 through December 18, 2008 was denied initially and at the redetermination level of review.
57. At the reconsideration level of review, the QIC affirmed the denial of coverage, noting that the contractor at the redetermination level had determined that "the services failed to meet Medicare criteria for coverage because therapy services may be covered when there is a reasonable expectation that the beneficiary will show measurable
17

Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 18 of 37
improvement in performing normal daily activities." In agreeing with this assessment, the QIC held that the "submitted documentation did not support that the beneficiary had experienced an acute episode or exacerbation of chronic condition resulting in a complex functional deficit to warrant skilled therapy intervention."
58. A timely filed request for review by an ALl resulted in a decision dated November 16,2010 that she was not entitled to coverage for those services.
59. In making that decision, the ALl relied on the Improvement Standard, like the lower level contractors before him, noting that "[t]he services must be provided with the expectation that the condition of the patient will improve materially in a reasonable and generally predictable period oftime." Relying on that standard, the ALl held that "one cannot determine whether there is a reasonable expectation of material improvement . . .. [T]he submitted documentation does not support that [KR] had experienced an acute episode or exacerbation of chronic condition resulting in a complex functional deficit to warrant skilled intervention."
60. On behalf of plaintiff KR, a timely appeal ofthe ALl decision to the MAC was made by fax transmission on December 22, 2010.
Plaintiff Miriam Katz 61. Plaintiff Miriam Katz is the widow of David Katz, who died on December 25,2010. Mrs. Katz is named as the executor in her deceased husband's will. 62. David Katz, who was 90 years old and a resident .of Connecticut when he died on December 25,2010, was hospitalized in November 2010 for metastatic rectal
18

Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 19 of 37
cancer and a high grade intestinal obstruction. 63. He had been in a SNF since November 19,2010. Medicare covered his
stay there from November 19 through November 30,2010. 64. On November 26,2010, plaintiff Miriam Katz received a SNF Advance
Beneficiary Notice and a generic notice, both dated November 22, 2010, notifying her that Mr. Katz would no longer be covered, effective after November 30, 2010. Upon her request for expedited review of that denial, she received an "Agreement Notice of Noncoverage" on December 2,2010. Then, continuing the process of expedited review, she requested and received an independent reconsideration decision from the QIC dated December 3,2010. That decision affirmed the denial of coverage because the "care you are currently receiving is considered custodial and could be performed by unskilled aides, who are trained in maintenance care."
65. Plaintiff Katz has until February 1,2011 to request ALl review of the reconsideration decision.
Plaintiff Edith Masterman 66. Plaintiff Edith Masterman is 79 years old and lives in Maine. She has been a paraplegic since a farming accident as a teenager. As a consequence she uses a wheelchair to get around, but has been able to remain at home with help from others. She also has been diagnosed with diabetes. 67. Over the last 10 years, she has developed a problem with pressure sores. As a consequence, her wound care doctor ordered home health care for wound care. She received this care, which was covered by Medicare, on a regular basis from
19

Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 20 of 37
Androscoggin Home Care & Hospice (AHCH) until she was hospitalized in September 2009 for surgery to perform a skin graft to repair a pressure sore.
68. An infection occurred after the skin graft and she remained hospitalized until October 14,2009. Upon her release from the hospital, she was admitted to a skilled nursing facility from October 14,2009 to January 18,2010. When she finally returned home in January 2010 her physician ordered home health care, but AHCH refused to accept her back as a patient on the grounds that it "cannot accept Edith because her Medicare will not pay for a chronic problem" and she needs long term care. AHCH informed Ms. Masterman that Medicare would not cover the wound care her doctor ordered because Medicare does not pay for care when a wound is chronic and never expected to heal.
69. Her doctors have been and are willing to order home health care. 70. Prior to her hospitalization, Medicare covered the services provided by an AHCH nurse who came to Ms. Masterman's home every other day. After her hospitalization and because she could not obtain Medicare coverage of her home health care, Ms. Masterman originally made weekly visits to the wound care clinic at the hospital. She now visits the wound care clinic once every four weeks. 71. She receives some home care services from Elder Independence of Maine, paid for by Medicaid, which includes home health aides three times daily for about 1-112 to 2 hours per visit from Home Care of Maine and a once weekly skilled nursing visit from Care and Comfort. 72. AHCH is the only Medicare certified home health agency in her area. Medicare-covered home health care from AHCH would be more frequent than the care
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 21 of 37
she now receives and would free her from the taxing effort and discomfort of having to go to the wound care clinic.
73. Ms. Masterman only leaves her horne now for doctor or clinic appointments. Horne health aides do her shopping. She cannot get in and out of bed by herself, but is able to move around her house once she is in her wheelchair.
74. Because AHCH refuses to accept her as a patient due to its belief that the Improvement Standard would deny her coverage, Ms. Masterman is not able to have a claim filed with Medicare or to obtain access to the administrative process.
Plaintiff Mary Patricia Boitano 75. Plaintiff Mary Patricia Boitano is 83 years old and lives in Rhode Island. She was hospitalized from October 22,2010 through October 29,2010 for a gastrointestinal hemorrhage, anemia, and renal failure, which required dialysis two days per week. Prior to being hospitalized, she lived at horne with her husband. 76. On October 29, 2010 she was transferred to a skilled nursing facility, Roberts Health Centre. Medicare covered her stay there from October 29,2010 to November 22,2010. 77. On November 19,2010, her husband, George Boitano, received a Notice of Non-Coverage from her Part C plan, United HealthCare, informing her that Medicare coverage for her stay in the SNF would end on November 22,2010. George Boitano appealed the decision to end Medicare coverage. 78. On November 22,2010, upon the request for fast-track appeal, the coverage denial was affirmed. The denial affirmation was based on the determination that "[t]herapy services must ... be reasonable in relation to the expected improvement in
21

Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 22 of 37
your condition." 79. On January 13,2011, Ms. Boitano requested that the QIO reconsider its
decision. 80. On or about November 22,2010, Ms. Boitano was transferred by her
family to a new SNF, West View Health Care Center. West View evaluated Ms. Boitano and determined that she required skilled nursing, physical therapy, occupational therapy and speech therapy.
81. West View requested United HealthCare to restart Medicare coverage based on Ms. Boitano's current skilled nursing and therapy needs. United HealthCare refused on the grounds that it had already determined that Ms. Boitano did not qualify for Medicare coverage.
82. At her own expense, Ms. Boitano remained at West View and received skilled nursing, physical therapy, occupational therapy and/or speech therapy on a daily basis from November 23,2010 through January 3, 2011.
83. Ms. Boitano was readmitted to the hospital on January 3, 2011 with another gastrointestinal bleed.
Plaintiff National Committee to Preserve Social Security and Medicare 84. Plaintiff National Committee to Preserve Social Security and Medicare ("NCPSSM" or "the National Committee") is a nonpartisan, nonprofit nationwide membership organization representing millions of members and supporters nationwide. 85. The mission of the NCPSSM is to protect, preserve, promote, and ensure the financial security, health, and ~ell-being of current and future generations of Americans. A central focus of that mission is the protection of Social Security and
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 23 of 37
Medicare. Eliminating the Improvement Standard is an important aspect of that overall goal.
86. The NCPSSM works through advocacy, education, services, grassroots efforts, and the leadership of the Board of Directors, its President and Chief Executive Officer (presently, former Congresswoman Barbara B. Kennelly), and the organization's professional staff.
87. NCPSSM's work is supported through annual membership dues and contributions, and through petitions and letters signed by his members and supporters. At present, it has approximately 3.2 million members and supporters throughout the country, of whom virtually all are Medicare beneficiaries. Some of the NCPSSM's members who are Medicare beneficiaries have had or are having the Improvement Standard applied to them.
88. Members of the National Committee would have standing to sue in their own right. The interests that the National Committee seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive and/or mandamus relief, rather than individualized relief for its members, the participation of individual members of the National Committee is not required.
89. Via certified mail on Sept. 23,2010, counsel for plaintiff National Committee sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 24 of 37
Infonnation Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
90. The letters were received by Defendant Sebelius and by Administrator Berwick on October 4,2010. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
Plaintiff National Multiple Sclerosis Society 91. The National Multiple Sclerosis Society (MS Society) is a nationwide organization with a 50-state network of chapters that works to eradicate multiple sclerosis by stopping disease progression and preventing the disease in future generations, while restoring function and providing and advocating for enhanced care and support for those already affected by or living with this chronic disease, including ensuring their access to quality health care, long-tenn care resources, and accessible, affordable insurance. 92. The MS Society accomplishes this mission by supporting comprehensive and globally collaborative research into the underlying causes, understanding, potential treatments, and ultimate prevention of multiple sclerosis, and by providing infonnation and resources, education, and support of all kinds to people with multiple sclerosis and their families. This is accomplished in a variety of ways, including nationally-managed programs and locally-managed state programs that provide services to families: infonnation and referrals, support groups, care consultation, research, and through educating and advocating with all appropriate agencies at the federal, state, and local levels.
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 25 of 37
•
93. In its effort to assist people with multiple sclerosis the MS Society works to ensure that services and benefits are available from federal programs that provide assistance to those with chronic illness and disability. As part of the MS Society's commitment to helping people affected by multiple sclerosis, the organization focuses on four key programs: Medicare, Medicare Prescription Drug Plans (Part D of Medicare), Social Security disability, and Department of Veterans Affairs benefits.
94. In its work on Medicare, the MS Society has focused in particular on the Improvement Standard as a critical factor in preventing people with multiple sclerosis from obtaining the Medicare coverage and health services that they need. Consequently, the MS Society assists people who have been denied or terminated from coverage because of application of the Improvement Standard. It also has sought to convince CMS to end Medicare's reliance on the Improvement Standard.
95. The MS Society is the functional equivalent of a membership organization, as people with multiple sclerosis and their families are represented by the MS Society and are able to express their views and to protect their collective interests through it. Its 48 chapters, which combined represent the entire United States, have members who vote, and members nationwide participate in identifying priority areas of need as part of the organizational strategic planning process.
96. Many of the individuals who act through the MS Society are Medicare beneficiaries, and a large number of them have been harmed by the Improvement Standard.
97. Individuals who act through the MS Society would have standing to sue in
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 26 of 37
their own right. The interests that the MS Society seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive, and/or mandamus relief, rather than individualized relief, the participation of individuals who act through the MS Society is not required.
98. Via certified mail on December 20,2010, counsel for plaintiffMS Society sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of Information Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
99. The letters were received by Defendant Sebelius and by Administrator Berwick on December 28,2010. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
Plaintiff Parkinson's Action Network 100. The Parkinson's Action Network (PAN) is a nationwide organization that works to eliminate Parkinson's disease and to provide better treatment for, and improve the quality of life of, people living with the disease.
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 27 of 37
101. PAN accomplishes this mission by working in partnership with other Parkinson's organizations and PAN's grassroots network of advocates in over 40 states. PAN educates the public, lawmakers, and appropriate federal agencies about the effects of Parkinson's and the need for better treatments and a cure.
102. PAN also advocates on behalf of those living with Parkinson's to ensure that benefits from federal programs, such as Social Security and Medicare, are properly made available to those who are eligible. The Improvement Standard in Medicare, which deprives Medicare beneficiaries, including those with Parkinson's, of coverage to which they are entitled, is an issue that PAN focuses on to improve the quality of life for its constituents.
103. PAN is the functional equivalent of a membership organization, as individuals with Parkinson's and their families are represented by PAN and its grassroots network, and are able to express their views and to protect their collective interests through it.
104. Many of the individuals who act through PAN are Medicare beneficiaries, and a large number of them have been harmed by the Improvement Standard.
105. Individuals who act through PAN would have standing to sue in their own right. The interests that PAN seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive, and/or mandamus relief, rather than individualized relief, the participation of individuals who act through PAN is not required.
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 28 of 37
106. Via first-class mail on December 10,2010, via certified mail on December 16,2010, and via United Parcel Service (UPS) on January 6, 2011, counsel for plaintiff PAN sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of Information Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
107. The United States Post Office has no record of the letters sent by certified mail on December 16,2010 being received. The letters sent by UPS on January 6, 2011 were received by Defendant Sebelius and by Administrator Berwick on January 7, 2011. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
Plaintiff Paralyzed Veterans of America 108. Plaintiff Paralyzed Veterans of America (PVA) is a nationwide, congressionally chartered veterans service organization that has as its mission to use its expertise, developed since its founding in 1946, on behalf of armed forces veterans who have experienced spinal cord injury or dysfunction. 109. This expertise is employed to advocate for quality health care for its
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 29 of 37
members, for research and education addressing spinal cord injury and dysfunction, for benefits based on its members' military service, and for civil rights, accessibility, and opportunities that maximize its members' independence.
110. PYA has almost 20,000 members, of whom over 6,200 are age 65 or over. About half of the PVA membership has identified Social Security benefits, either for oldage or disability, as their main source of income. About 10,500 members have nonservice-connected chronic conditions, which allow them to enroll in the Department of Veterans Affairs (VA) health care program only as low priority patients, forcing a majority of these to elect Medicare coverage, either in addition to in or instead of VA health care.
111. Furthermore, PVA members who are service-connected and enrolled in the VA health care program are free to enroll in Medicare as well and seek non-VA health care providers who accept Medicare assignment.
112. Although the exact number of PVA members who are eligible for and receiving Medicare coverage is not known, the information in the preceding paragraph indicates that thousands of PVA members are eligible for and receiving Medicare. Since virtually all PYA members have chronic conditions, some, probably thousands, of those PVA members who are Medicare beneficiaries have had or are having the Improvement Standard applied to them.
113. Members of PVA would have standing to sue in their own right. The interests that PVA seeks to protect in challenging the Improvement Standard are germane
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 30 of 37
to its purpose. Because this lawsuit seeks a legal ruling in the fonn of declaratory, injunctive and/or mandamus relief, rather than individualized relief for its members, the participation of individual members of PVA is not required.
114. Via certified mail on December 20,2010, counsel for plaintiffPVA sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the CMS Administrator. The identical letters infonned the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the Administrative Procedure Act and the Freedom of Infonnation Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
115. The letters were received by Defendant Sebelius and by Administrator Berwick on December 28,2010. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
American Academy of Physical Medicine and Rehabilitation 116. Plaintiff American Academy of Physical Medicine and Rehabilitation (AAPM&R) is the premier medical society for the specialty of physical medicine and rehabilitation. It has more than 7,500 members and represents greater than 75% of Board certified physiatrists in the United States. 117. AAPM&R's core purpose is to advance its members' ability to serve
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 31 of 37
patients. It seeks to advance the education, knowledge, skills, and research of its members in order to provide quality care and to represent the best interests of their patients who have or are at risk of having temporary or permanent disabilities.
118. AAPM&R carries out its vision by promoting excellence in physiatric practice and advocating on public policy issues related to persons with disabling conditions and pain.
119. Among the policy issues on which it advocates is the Improvement Standard. It is the position of the AAPM&R that the Medicare statute and regulations require that Medicare provide coverage to its enrollees for the skilled medical services necessary for their care and that the need for these services may exist independent of medical improvement.
120. Members of AAPM&R would have standing to sue in their own right. The interests that AAPM&R seeks to protect in challenging the Improvement Standard are germane to its purpose. Because this lawsuit seeks a legal ruling in the form of declaratory, injunctive andlor mandamus relief, rather than individualized relief for its members, the participation of individual members of AAPM&R is not required.
121. Via first-class mail on December 14,2010, via certified mail on December 16,2010, and via UPS on January 6, 2011, counsel for plaintiff AAPM&R sent letters on its behalf to Defendant Sebelius and to Donald Berwick, the eMS Administrator. The identical letters informed the defendant and the Administrator that their application of the Improvement Standard was in violation of the Medicare statute and regulations, of the
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 32 of 37

Administrative Procedure Act and the Freedom of Information Act, and of the Due Process Clause of the Fifth Amendment. The letters requested that the defendant and the Administrator "direct that the Improvement Standard no longer be employed to make coverage decisions and that appropriate steps be taken to correct its present and past application."
122. The United States Post Office has no record of the letters sent by certified mail on December 16,2010 being received. The letters sent by UPS on January 6, 2011 were received by Defendant Sebelius and by Administrator Berwick on January 7, 2011. Neither defendant Sebelius nor Administrator Berwick, nor anyone acting on their behalf, has responded to the letters.
VII. INADEQUACY OF REMEDY AT LAW AND PROPRIETY OF ISSUANCE OF A WRIT OF MANDAMUS
123. Plaintiffs suffer irreparable injury by reason of defendants' actions complained of herein. Not only are they deprived of Medicare coverage that is crucial to their health and well-being, but they also effectively lose the right to challenge that denial of coverage.
124. Plaintiffs have no adequate remedy at law. Only the declaratory, injunctive, and mandamus relief that this Court can provide will fully redress the wrongs done to plaintiffs.
125. Plaintiffs have a clear right to the relief sought. There is no other adequate remedy available to correct an otherwise unreviewable defect not related to a claim for benefits. The defendant has a plainly defined and nondiscretionary duty to provide the
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.. Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 33 of 37
relief that plaintiffs seek. VIII. FIRST CAUSE OF ACTION: VIOLATION OF THE MEDICARE STATUTE AND REGULATIONS 126. Application of the Improvement Standard to deny coverage violates the
Medicare statute, and in particular its medical necessity requirement, 42 U.S.C. § 1395y(a)(l)(A), its implementing regulations, 42 C.F.R. §§ 409.32(c), 409.44(b)(l), 409.44(a), 409.44(b)(3)(iii), and 409.44(c)(2)(iii), and the Medicare Benefit Policy Manual.
IX. SECOND CAUSE OF ACTION: VIOLATION OF THE PROCEDURAL REQUIREMENTS OF THE MEDICARE STATUTE
127. The Medicare statute prohibits the promulgation of a rule that "establishes or changes a substantive legal standard governing the scope of benefits, the payment for services, or the eligibility of individuals ... to ... receive services or benefits under this subchapter ... unless it is promulgated by the Secretary" through notice-and-comment rulemaking. 42 U.S.C. § 1395hh(a)(2). As a rule applied to Medicare beneficiaries to deny them coverage, the Improvement Standard violates this notice-and-comment requirement of the Medicare statute, which renders the rule void and of no force and effect.
X. THIRD CAUSE OF ACTION: VIOLATION OF THE ADMINISTRATIVE PROCEDURE ACT
128. The Administrative Procedure Act prohibits rulemaking without first publishing the rule in proposed form and allowing members of the public an opportunity to comment on the proposed rule. 5 U.S.C. § 553. As a rule applied to Medicare beneficiaries to deny them coverage, the Improvement Standard violates those noticeand-comment requirements of the Administrative Procedure Act, which renders the rule
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 34 of 37
void and of no force and effect. XI. FOURTH CAUSE OF ACTION: VIOLATION OF THE FREEDOM OF INFORMATION ACT
129. The Freedom of Information Act requires publication in the Federal Register "of substantive rules of general applicability adopted as authorized by law, and statements of general policy or interpretations of general applicability formulated and adopted by the agency." 5 U.S.C. § 552(a)(1)(D). The Improvement Standard meets this criterion, but it has not been published in the Federal Register. Accordingly, it cannot be applied, and the rule is void and of no force and effect.
XII. FIFTH CAUSE OF ACTION: VIOLATION OF THE DUE PROCESS CLAUSE
130. The application of an improper standard to deny coverage contrary to the Medicare Act and controlling regulations violates the Due Process Clause of the Fifth Amendment.
XIII. SIXTH CAUSE OF ACTION: VIOLATION OF THE DUE PROCESS CLAUSE
131. The application of the Improvement Standard primarily at levels of review below the ALl level and with the pretense that it is a proper condition of coverage has the effect of discouraging or preventing beneficiaries from seeking review at which the correct standard would more likely be applied. It therefore acts to deprive beneficiaries of their right to review in violation of the Due Process Clause of the Fifth Amendment.
XIV. PRAYER FOR RELIEF Wherefore, Plaintiffs respectfully pray that this Court: 1. Assume jurisdiction over this action. 2. Certify at an appropriate time that this suit is properly maintainable as a
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 35 of 37
•
class action pursuant to Rule 23(b)(2) of the Federal Rules of Civil Procedure. 3. Declare that defendant's application ofthe Improvement Standard in
Medicare coverage decisions violates the Medicare statute and regulations, the noticeand-comment requirements of the Medicare statute and the Administrative Procedure Act, the publication requirement of the Freedom of Information Act, and the Due Process Clause of the Fifth Amendment.
4. Grant a permanent injunction and/or an order of mandamus a. prohibiting defendant, her successors in office, her agents,
employees, and all persons acting in concert with her from applying the Improvement Standard to make Medicare coverage decisions;
b. ordering defendant, her successors in office, her agents, employees, and all persons acting in concert with her to review all adverse coverage decisions for the named plaintiffs and class members that rely on the Improvement Standard and to reissue those decisions without application of the Improvement Standard;
c. ordering defendant, her successors in office, her agents, employees, and all persons acting in concert with her to revise any rules, provisions, guidelines, directives, or other written material under her control that supports and/or applies the Improvement Standard;
d. ordering defendant, her successors in office, her agents, employees, and all persons acting in concert with her to direct all entities that render Medicare coverage decisions at any level (i) to correct any internal guidelines, directives, or other written material for employees that support and apply the Improvement Standard and (ii) to educate employees as to the correct approach to coverage decisions, without
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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 36 of 37

regard to an Improvement Standard, as indicated by the Medicare Act and controlling regulations; and
e. ordering defendant, her successors in office, her agents, employees, and all persons acting in concert with her to monitor all entities that render Medicare coverage decisions as to their progress in eliminating the Improvement Standard as a basis for coverage decisions.
Plaintiffs pray in addition: 5. For costs of the suit herein. 6. For reasonable attorneys' fees and expenses pursuant to the Equal Access to Justice Act, 28 U.S.C. § 2412. 7. For such other and further relief as the Court deems just and proper.

DATED: January 13,2011

Respectfully submitted,

Gill Deford Judith A. Stein Margaret Murphy Wey-Wey Kwok Nancy V. Gifford Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 (860) 456-7790
Toby S. Edelman Center for Medicare Advocacy, Inc. 1025 Connecticut Ave., N.W., Suite 709 Washington, D.C. 20036 (202) 293-5760

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Case 5:11-cv-00017-cr Document 1 Filed 01/18/11 Page 37 of 37 Michael Benvenuto Devon Green Medicare Advocacy Project Vennont Legal Aid, Inc. P.O. Box 1367 Burlington, VT 05402 (802) 863-5620 Attorneys for Plaintiffs
37

 
 Case 5:11-cv-00017-cr Document 64 Filed 12/23/11 Page 1 of 5

UNITED STATES DISTRICT COURT

23 pa.! \2: 08

FOR THE

20\1 DEC· n

DISTRICT OF VERMONTi£_<:>'.:I_._ _

BY -

DEPUTY CL,_"l<

GLENDA JIMMO, et aI.,

)

)

Plaintiff,

)

)

v.

)

)

KATHLEEN SEBELIUS, Secretary of )

Health and Human Services,

)

)

Defendant.

)

Case No.5: ll-cv-17

ORDER DENYING PARTIAL RECONSIDERATION OF 
 OPINION AND ORDER OF OCTOBER 25,2011 
 (Doc. 57) 

This matter comes before the court on Plaintiffs' motion for partial reconsideration
of the court's Opinion and Order of October 25,2011 (Doc. 57). In its October 25th
Opinion and Order, the court granted in part and denied in part Defendant's motion to
dismiss. Plaintiffs seek reconsideration of that part of the Opinion and Order dismissing
plaintiff Edith Masterman's claim for lack of subject matter jurisdiction based upon her
failure to exhaust her administrative remedies. Defendant opposes reconsideration.
I. Factual and Procedural Background.
Plaintiffs' motion for partial reconsideration seeks reconsideration of the
following portion of the court's October 25th Opinion and Order:
Although this case presents a close question, the court cannot conclude, based upon the record before it, that judicial review is unavailable to Ms. Masterman as a practical matter. As the Secretary points out, Ms. Masterman can force her HHA [Home Health Agency] to submit a claim through a procedure known as "demand billing." A "demand bill" is a "claim submitted by an HHA to [CMS] for services or items that the HHA believes are not covered but which the HHA must submit to [CMS] at the request of the beneficiary[.]" Lutwin v. Thompson, 361 F.3d 146, 149 (2d

Case 5:11-cv-00017-cr Document 64 Filed 12/23/11 Page 2 of 5
Cir. 2004) (internal quotation marks and alterations omitted). To require submission of a demand bill, the beneficiary must agree to pay the HHA for services that CMS determines are not covered by Medicare. See id. A beneficiary has this option when an HHA "prospectively decline[s] to provide ... services ... when it conclude[s]," as Ms. Masterman's HHA did here, "that [CMS] would not cover those services. Id. l This would "trigger the administrative process, at the end of which is judicial review of the Secretary's final decision." Am. Chiropractic Ass 'n, 431 F.3d at 817. Some potential difficulty or financial hardship is generally not enough. See Ringer, 466 U.S. at 622, 625 (holding that Ringer's claim arose under the Medicare Act and required presentment even though "some ... surgeons may well decline to perform the requested surgery because of fear that the Secretary will not find the surgery 'reasonable and necessary' and thus will refuse to reimburse them.").
Here, Ms. Masterman has not established that she is financially unable to reimburse her HHA in the event services are not covered or that demand billing is not available to her. She has thus not established that applying § 405(h) to her claims renders judicial review unavailable. Accordingly, Ms. Masterman is required to present her claims to the Secretary, and jurisdiction under both § 405(g) and § 1331 is not available.
(Doc. 56 at 8-9).
With regard to Ms. Masterman, Plaintiffs' Amended Complaint alleges the
following:
71. An infection occurred after the skin graft and she remained hospitalized until October 14,2009. Upon her release from the hospital, she was admitted to a skilled nursing facility from October 14,2009 to January 18, 2010. When she finally returned home in January 2010 her physician ordered home health care, but AHCH refused to accept her back as a patient on the grounds that it "cannot accept Edith because her Medicare will not pay for a chronic problem" and she needs long term care. AHCH informed Ms. Masterman that Medicare would not cover the wound care her doctor ordered because Medicare does not pay for care when a wound is chronic and never expected to heal.
1 When an HHA declines to provide services because it believes that such services will not be covered by Medicare, eMS requires it to provide the beneficiary with a "Home Health Advance Beneficiary Notice." On this notice, the beneficiary may trigger demand billing by selecting the following option: "I want the items and/or services ... and 1 agree to pay for the items and/or services myself if Medicare or my other insurance doesn't pay."
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72. Her doctors have been and are willing to order home health care.
73. Prior to her hospitalization, Medicare covered the services provided by an AHCH nurse who came to Ms. Masterman's home every other day. After her hospitalization and because she could not obtain Medicare coverage of her home health care, Ms. Masterman originally made weekly visits to the wound care clinic at the hospital. She now visits the wound care clinic once every four weeks.
74. She receives some home care services from Elder Independence of Maine, paid for by Medicaid, which includes home health aides three times daily for about 1-112 to 2 hours per visit from Home Care of Maine and a once weekly skilled nursing visit from Care and Comfort.
75. AHCH is the only Medicare certified home health agency in her area. Medicare-covered home health care from AHCH would be more frequent than the care she now receives and would free her from the taxing effort and discomfort of having to go to the wound care clinic.
(Doc. 13 at~~71-75). In seeking reconsideration, Plaintiffs present two arguments. First, they contend
they did not have an adequate opportunity to address the Secretary's demand billing argument as it arose late in the briefing on the motion to dismiss. And second, they argue that demand billing was not available to Ms. Masterman because her HHA refused to accept her as a patient and thus she never had a patient-provider relationship that could give rise to demand billing. See Doc. 60 at 3 ("Here, the HHA did not enter a patient­ provider relationship with Ms. Masterman.").
The Secretary counters that reconsideration is unavailable because Plaintiffs present no new evidence or law for the court's consideration, and because Plaintiffs do not allege that the HHA refused Ms. Masterman services even if she agreed to be personally financially responsible for them.
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II. Conclusions of Law and Analysis. A. Standard of Review In the Second Circuit, the standard for reconsideration is "strict" and
reconsideration "will generally be denied unless the moving party can point to controlling decisions or data that the court overlooked-matters, in other words, that might reasonably be expected to alter the conclusion reached by the court." Shrader v. CSX Transp., Inc., 70 F.3d 255, 257 (2d Cir. 1995). "The major grounds justifying reconsideration are an intervening change of controlling law, the availability of new evidence, or the need to correct a clear error or prevent manifest injustice." Virgin Atlantic Airways, Ltd. v. Nat 'I Mediation Bd., 956 F.2d 1245, 1255 (2d Cir. 1992). It is in accordance with this exacting standard that Plaintiffs' partial motion must be considered.
B. Whether Plaintiffs had an Adequate Opportunity to Address 
 Demand Billing. 

Plaintiffs first argue that they lacked an adequate opportunity to respond to the Secretary's demand billing argument because it was raised for the first time in Defendant's reply memorandum. This argument is unavailing. Plaintiffs bear the burden of establishing the court's subject matter jurisdiction. See Aurecchione v. Schoolman Transp. System, Inc., 426 F.3d 635,638 (2d Cir. 2005). The motion to dismiss was extensively briefed by both parties and the issue of demand billing was squarely before the court.
Plaintiffs allege that Ms. Masterman cannot present her claims to the Secretary as required by the Medicare Act, 42 U.S.C. § 405(h) and thus the requirement to do so should be excused. Having made this argument, the burden was and is on Plaintiffs to make the requisite factual showing to support it. There can be no reasonable argument that they did not have an incentive and opportunity to do so. Accordingly, as an initial observation, the court notes that the demand billing issue should and could have been addressed by Plaintiffs previously.
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c. Whether Plaintiffs Have Established that Demand Billing is Unavailable.
More importantly, the facts before the court remain unchanged. Plaintiffs argue that demand billing was not available to Ms. Masterman because the only HHA reasonably available to her refused to enter into a provider-patient relationship with her on any terms. Their Amended Complaint, however, supports a contrary conclusion. It does not allege, as Plaintiffs contend, that "the sole HHA in Ms. Masterman's geographic area denied admission to Ms. Masterman and refused to accept her as a patient." (Doc. 60 at 2). Rather, it alleges that Ms. Masterman was an existing patient of the HHA which had provided services to her in the past but which refused to provide services for a chronic condition only because Medicare would not pay for them and she required long term care. There is nothing in the Amended Complaint that would allow the court to conclude or even infer that the HHA would have refused to provide services to Ms. Masterman even had she agreed to pay for them herself. Moreover, Plaintiffs do not allege she was financially incapable of doing so. Accordingly, Plaintiffs have identified no new evidence which the court overlooked in determining whether Plaintiffs had established the court's subject matter jurisdiction over Ms. Masterman's claims.
For the foregoing reasons, partial reconsideration is hereby DENIED.
SO ORDERED.
23 Dated at Rutland, in the District of Vermont, this rJ day of December, 2011.
lsi Christina Reiss Christina Reiss, Chief Judge United States District Court
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 Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 1 of 32

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF VERMONT

GLENDA JIMMO, et al., on behalf of themselves and all others similarly situated,
Plaintiffs,
v.
KATHLEEN SEBELIUS, Secretary of Health and Human Services,
Defendant.

) ) ) ) ) Civil Action No. 5:11-CV-17-CR ) ) ) ) ) )

[Proposed] SETTLEMENT AGREEMENT

I. INTRODUCTION WHEREAS the parties desire to resolve amicably all the claims raised in this suit without admission of liability; WHEREAS the parties have agreed upon mutually satisfactory terms for the complete resolution of this Federal Rule of Civil Procedure 23(b)(2) class action litigation; NOW THEREFORE, the Plaintiffs and Defendant hereby consent to the entry of this Settlement Agreement with the following terms.
II. DEFINITIONS 1. “Approval Date” means the date upon which the Court approves this Settlement Agreement, after having determined that it is adequate, fair, reasonable, equitable, and just to the Class as a whole, after: (i) notice to the Class, (ii) an

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opportunity for class members to submit timely objections to the Settlement Agreement, and (iii) a hearing on the fairness of the settlement.
2. “Class Counsel” or “Plaintiffs’ Counsel” means the Center for Medicare Advocacy, Inc., Vermont Legal Aid, and Wilson Sonsini Goodrich & Rosati. “Plaintiffs’ Lead Counsel” means the attorney Plaintiffs have authorized to be the main contact with Defendant’s counsel.
3. The “Class” or “Class Members” means all Medicare beneficiaries as defined in Section XI.
4. “CMS” refers to the Centers for Medicare & Medicaid Services. 5. “Court” means the United States District Court for the District of Vermont. 6. “Defendant” or “the Secretary” means the Secretary of Health and Human Services, in his or her official capacity. 7. "Final, non-appealable denial" or “final and non-appealable” denial means a denial for which the applicable deadline, as described in federal regulations, for an appeal of a decision has expired. 8. “Named Plaintiffs” refers to the individuals and organizations who are named in the First Amended Complaint and have not been dismissed from this action by the Court as of the Approval Date. 9. “Improvement Standard” refers to a standard that Plaintiffs have alleged, but that Defendant denies, exists under which Medicare coverage of skilled services is denied on the basis that a Medicare beneficiary is not improving, without regard to an
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individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care or services in question.
10. “Parties” refers to Plaintiffs and to Defendant. 11. “Plaintiffs” refers to the Named Plaintiffs, acting on their own behalf and on behalf of all Class Members. 12. “State Medicaid agencies” refers to the agencies or their contractors within the fifty States and the District of Columbia that are responsible for administering medical assistance benefits under Title XIX of the Social Security Act. 13. “End of the Educational Campaign” means the date upon which the Educational Campaign described in Section IX.9 has been conducted and completed as agreed, as evidenced by Defendant’s notification to Plaintiffs’ Lead Counsel and certification in good faith that all terms of the Educational Campaign have been conducted and completed. 14. “HH” refers to “home health services” as addressed by § 1861(m) of the Social Security Act/ 42 U.S.C. § 1395x(m); 15. “SNF” refers to “skilled nursing facility” as addressed by § 1819(a) of the Social Security Act/ 42 U.S.C. § 1395i-3(a); 16. "OPT" refers to outpatient therapy services as follows: outpatient physical therapy services as addressed by § 1861(p) of the Social Security Act/ 42 U.S.C. § 1395x(p), outpatient occupational therapy services as addressed by § 1861(g) of the Social Security Act/ 42 U.S.C. § 1395x(g), and outpatient speech-language pathology services as addressed by § 1861(ll)(2) of the Social Security Act/ 42 U.S.C. § 1395x(ll)(2),
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17. “IRF” refers to “inpatient rehabilitation facility” as addressed by 42 C.F.R.

Part 412, Subpart P.

18. “CORF” refers to “comprehensive rehabilitation facility” as addressed by

§ 1861(cc) of the Social Security Act/ 42 U.S.C. § 1395x(cc)

III. ENTIRE AGREEMENT

The terms of this Settlement Agreement and any attachments thereto are the

exclusive and full agreement of the Parties with respect to all claims for declaratory and

injunctive relief and attorney’s fees and costs as set forth in this Settlement Agreement

and in the First Amended Complaint. No representations or inducements or promises to

compromise this action or enter into this Settlement Agreement have been made, other

than those recited or referenced in this Settlement Agreement.

IV. APPROVAL

1.

This Settlement Agreement is expressly conditioned upon its approval by

the Court.

2.

The terms of this Settlement Agreement are fair, reasonable, and

adequate. The entry of this Settlement Agreement is in the best interest of the Parties and

the public.

V. FINAL JUDGMENT

If, after the fairness hearing, the Court approves this Settlement Agreement as

fair, reasonable, and adequate, the Court shall direct the entry of Final Judgment (the

“Final Judgment”) dismissing this action with prejudice, pursuant to the terms of this

Settlement Agreement and Fed. R. Civ. P. 41, except that the Court shall retain

jurisdiction for the limited purposes described in Section VI of this Settlement

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Agreement. The Final Judgment shall incorporate and be subject to the terms of the Settlement Agreement.
VI. CONTINUING JURISDICTION 1. The Court has held, contrary to arguments made by Defendant, that it has subject matter jurisdiction over this matter. See Opinion and Order dated October 25, 2011 (Docket Entry No. 52). 2. If for any reason this Settlement Agreement (a) is not finalized by the parties, (b) is not approved by the Court following notice to class members and the fairness hearing, or (c) is in any way rendered null and void (in whole or in part), Defendant preserves all of her rights to argue (in this Court or on appeal) that the Court lacks subject matter jurisdiction over this matter. 3. Subject to the limitations and reservations set forth in the preceding paragraph, the Court will retain jurisdiction over this matter only for the limited purposes described in this paragraph for the following duration: (a) the Court will retain jurisdiction for a period not to exceed twenty-four (24) months following the End of the Educational Campaign if the Administrator of CMS issues a CMS Ruling communicating the clarified maintenance coverage standards for skilled nursing facility (SNF), home health (HH) and outpatient therapy (OPT) as set forth in Sections IX.6 and IX.7 of this Settlement Agreement within three (3) months after the effective date of the Manual Provisions; or (b) the Court will retain jurisdiction for a period not to exceed thirty-six (36) months following the End of the Educational Campaign if the Administrator of CMS does not issue such a CMS Ruling within three (3) months after the effective date of the Manual Provisions. Such limited jurisdiction shall be for the sole purposes of (a)
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enforcing the provisions of the Settlement Agreement in the event that one of the Parties claims that there has been a breach of any of those provisions, (b) modifying the Settlement Agreement if jointly requested by the Parties pursuant to Section VII, (c) entering any other order authorized by the Settlement Agreement, and (d) deciding any fee petition filed by Plaintiffs, solely in the event that the parties are unable to agree on an amount of reasonable attorney’s fees, as further described in Section X.
4. Notwithstanding the time frames for the Court’s continuing jurisdiction discussed in the previous Section VI.3, the Court shall maintain jurisdiction to rule on a motion for enforcement of this Settlement Agreement, or for attorney’s fees, filed prior to the end of the applicable time frame set out in Section VI.3. The Court will also have jurisdiction to rule on a motion for enforcement of this Settlement Agreement that was filed after the end of the applicable time frame in Section VI.3. if the Dispute Resolution process in Section VIII of this Settlement Agreement is initiated prior to the end of the time frame and if the Party files the motion for enforcement within 30 days of the other Party’s written statement of disagreement with the relief requested by the moving Party.
VII. MODIFICATION At any time while the Court retains jurisdiction over this matter as described in Section VI, Plaintiffs and Defendant may jointly agree to modify this Settlement Agreement. Any joint request for modification must be in writing, signed by both Class Counsel and Defendant's counsel, and is subject to approval by the Court.
VIII. DISPUTE RESOLUTION PROCEDURES
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Either Party shall have the right to initiate steps to resolve any alleged noncompliance with any provision of the Settlement Agreement, subject to limitations and standards set forth in the Settlement Agreement.
1. If one party (the “Initiating Party”) has good reason to believe that an issue of noncompliance exists, it will first give timely written notice to the other party (the “Responding Party”), including: (a) a reference to all specific provisions of the Settlement Agreement that are involved; (b) a statement of the issue; (c) a statement of the remedial action sought by the Initiating Party; and (d) a brief statement of the specific facts, circumstances, and any other arguments supporting the position of the Initiating Party; and (e) if there is a good faith basis for expedited resolution, the circumstances that make expedited resolution appropriate, and the proposed date for a reasonable expedited response. To be timely, such notice must be provided promptly. Notice that is not provided promptly because of a lack of diligence on the part of the Initiating Party shall not serve as a basis for the Court to exercise jurisdiction as described in Section VI.4 above.
2. Within thirty (30) calendar days after receiving such timely notice or within a reasonable time for an expedited resolution, the Responding Party shall respond in writing to the statement of facts and arguments set forth in the notice and shall provide its written position, including the facts and arguments upon which it relies in support of its position.
3. The Parties shall undertake good-faith negotiations, including meeting and conferring by telephone or in person and exchanging relevant documents and/or other information, to attempt to resolve the alleged noncompliance. The written notice set
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forth in Section VIII.1 may be amended solely to include issue(s) related to the original notice that may arise during the meet-and-confer process described in this paragraph.
4. If the Initiating Party believes in good faith that efforts to resolve the matter have failed or if sixty (60) calendar days have elapsed from the Receiving Party’s receipt of timely notice, the Initiating Party, after providing written notice to the Responding Party, may file a motion with the Court, with a supporting brief, requesting resolution of the alleged noncompliance, provided however that the relief sought by such motion shall be limited to the issue(s) of alleged noncompliance described in the written notice, as to which the Parties have met and conferred as described in Section VIII.3.
5. The Responding Party shall be provided with appropriate notice of any such motion and an opportunity to be heard on the motion, as provided under the Civil Local Rules of the District of Vermont and the Federal Rules of Civil Procedure.
6. The Initiating Party cannot seek contempt sanctions as a remedy for alleged noncompliance with the Settlement Agreement. If, however, the Initiating Party successfully argues to the Court that there has been a breach of the Agreement and obtains an order from the Court compelling the Responding Party to remedy the breach, and if the Responding Party subsequently violates that order, then the Initiating Party is free to seek contempt sanctions for that violation.
IX. INJUNCTIVE PROVISIONS Manual Revisions
1. The agency will revise the relevant portions of Chapters 7, 8, and 15 of the Medicare Benefit Policy Manual (MBPM) to clarify the coverage standards for the skilled nursing facility (SNF), home health (HH), and outpatient therapy (OPT) benefits
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when a patient has no restoration or improvement potential but when that patient needs skilled SNF, HH, or OPT services (SNF, HH, OPT “maintenance coverage standard”). The agency will also revise the relevant portions of Chapter 1, Section 110 of the MBPM to clarify the coverage standards for services performed in an inpatient rehabilitation facility (IRF).
2. The manual revisions to be made pursuant to this Settlement Agreement will clarify the SNF, HH, and OPT maintenance coverage standards and IRF coverage standard only as set forth below in Sections IX.6 through IX.8. Existing Medicare eligibility requirements for coverage remain in effect. Nothing in this Settlement Agreement modifies, contracts, or expands the existing eligibility requirements for receiving Medicare coverage, including such requirements found in:
a. Posthospital SNF Care, as set forth in 42 C.F.R. Part 409, Subparts C and D, and related subregulatory guidance; b. Home Health Services, as set forth in 42 C.F.R. Part 409, Subpart E, 42 C.F.R. Part 410, Subpart C, and related subregulatory guidance; c. Outpatient Therapy Services, as set forth in 42 C.F.R. Part 410, Subpart B, and related subregulatory guidance; and d. Inpatient Rehabilitation Facility services, as set forth in 42 C.F.R. Part 412, Subpart P, and related subregulatory guidance. 3. CMS will revise or eliminate any manual provisions in Chapters 7, 8, and 15 and Chapter 1, Section 110 of the MBPM that CMS determines are in conflict with the standards set forth below in Sections IX.6 through IX.8.
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4. CMS will afford Plaintiffs’ Counsel 21 days to review and provide a single set of written comments on the manual provisions revised or eliminated as part of settlement before the manual provisions are finalized and issued. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. If plaintiffs request, CMS will also afford Plaintiffs’ Counsel a second opportunity for review and comment on these manual revisions before the manual provisions are finalized and issued; Plaintiffs’ Counsel will have 14 days to review any subsequent changes made and either provide a second set of written comments or communicate its comments at a meeting between counsel. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. CMS shall retain final authority as to the ultimate content of the manual provisions.
5. In providing any set of recommendations described in paragraph 4 above, Plaintiffs agree to collect all recommendations into one consolidated document to be provided by Plaintiffs’ Lead Counsel.
Maintenance Coverage Standard for Therapy Services under the SNF, HH, and OPT Benefits
6. Manual revisions will clarify that SNF, HH, and OPT coverage of therapy to perform a maintenance program does not turn on the presence or absence of a
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beneficiary’s potential for improvement from the therapy, but rather on the beneficiary’s need for skilled care.
a. The manual revisions will clarify that, under the SNF, HH, and OPT maintenance coverage standards, skilled therapy services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a qualified therapist (“skilled care”) are necessary for the performance of a safe and effective maintenance program. Such a maintenance program to maintain the patient’s current condition or to prevent or slow further deterioration is covered so long as the beneficiary requires skilled care for the safe and effective performance of the program. When, however, the individualized assessment does not demonstrate such a necessity for skilled care, including when the performance of a maintenance program does not require the skills of a therapist because it could safely and effectively be accomplished by the patient or with the assistance of nontherapists, including unskilled caregivers, such maintenance services will not be covered under the SNF, HH, or OPT benefits. b. The manual revisions will further clarify that, under the standard set forth in the previous paragraph (Section IX.6.a.), skilled care is necessary for the performance of a safe and effective maintenance program only when (a) the particular patient’s special medical complications require the skills of a qualified therapist to perform a therapy service that would otherwise be considered non-skilled; or (b) the
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needed therapy procedures are of such complexity that the skills of a qualified therapist are required to perform the procedure. c. The manual revisions will further clarify that, to the extent provided by regulation, the establishment or design of a maintenance program by a qualified therapist, the instruction of the beneficiary or appropriate caregiver by a qualified therapist regarding a maintenance program, and the necessary periodic reevaluations by a qualified therapist of the beneficiary and maintenance program are covered to the degree that the specialized knowledge and judgment of a qualified therapist are required.
d. The maintenance coverage standard for therapy as outlined in this section does not apply to therapy services provided in an inpatient rehabilitation facility (IRF) or a comprehensive outpatient rehabilitation facility (CORF).
Maintenance Coverage Standard for Nursing Services under the SNF and HH Benefits
7. Manual revisions will clarify that SNF and HH coverage of nursing care does not turn on the presence or absence of an individual’s potential for improvement from the nursing care, but rather on the beneficiary’s need for skilled care.
a. The manual revisions will clarify that, under the SNF and HH benefits, skilled nursing services are covered when an individualized assessment of the patient’s clinical condition demonstrates that the specialized judgment, knowledge, and skills of a registered nurse or, when
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provided by regulation, a licensed practical (vocational) nurse (“skilled care”) are necessary. Skilled nursing services would be covered where such skilled nursing services are necessary to maintain the patient’s current condition or prevent or slow further deterioration so long as the beneficiary requires skilled care for the services to be safely and effectively provided. When, however, the individualized assessment does not demonstrate such a necessity for skilled care, including when the services needed do not require skilled nursing care because they could safely and effectively be performed by the patient or unskilled caregivers, such services will not be covered under the SNF or HH benefits. b. The manual revisions will further clarify that, under the standard set forth in the previous paragraph (Section IX.7.a.), skilled nursing care is necessary only when (a) the particular patient’s special medical complications require the skills of a registered nurse or, when provided by regulation, a licensed practical nurse to perform a type of service that would otherwise be considered non-skilled; or (b) the needed services are of such complexity that the skills of a registered nurse or, when provided by regulation, a licensed practical nurse are required to furnish the services. To be considered a skilled service, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel as provided by regulation, including 42 C.F.R. 409.32.
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c. The maintenance coverage standard for nursing services as outlined in this section does not apply to nursing services provided in an inpatient rehabilitation facility (IRF) or a comprehensive outpatient rehabilitation facility (CORF). IRF Coverage Standard 8. Manual revisions will clarify that an IRF claim could never be denied for the following reasons: (1) because a patient could not be expected to achieve complete independence in the domain of self-care or (2) because a patient could not be expected to return to his or her prior level of functioning. Educational Campaign 9. CMS will engage in a nationwide educational campaign, as set forth in the following Sections IX.10 through IX.14, which will use written materials and interactive forums with providers and contractors, to communicate the SNF, home health, and OPT maintenance coverage standards and the IRF coverage standards as set forth in Sections IX.6 through IX.8. 10. The educational campaign will be directed to include the following contractors, adjudicators, and providers and suppliers (collectively “recipients”) through the following written educational materials (“written educational materials”): a. Medicare Administrative Contractors (MACs, Part A/B contractors): Program Transmittal and MLN Matters article
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b. Medicare Advantage (MA) Organizations (Part C contractors): Health Plan Management System (HPMS) memorandum and MLN Matters article c. Part A/B Qualified Independent Contractors (QICs): MLN Matters article d. Part C QIC/Independent Review Entity (IRE): MLN Matters article e. Quality Improvement Organizations (QIOs, formerly PROs): Transmittal of Policy Systems (TOPS) memorandum and MLN Matters article f. Recovery Audit Contractors (RACs): Program Transmittal and MLN Matters article g. Administrative Law Judges (ALJs): MLN Matters article will be distributed to the Chief Administrative Law Judge for dissemination to the ALJs. h. Medicare Appeals Council: MLN Matters article will be distributed to the Chair of the Departmental Appeals Board for dissemination to the Administrative Appeals Judges. i. Providers and suppliers: MLN Matters article to be distributed by the MACs, MA contractors, and CMS via listservs to subscribed providers. j. Subscribers to CMS listservs: MLN Matters article
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k. 1-800 MEDICARE Scripts: CMS will revise relevant 1-800 MEDICARE customer service scripts as necessary to ensure consistency with the revised manual provisions 11. CMS will include an accompanying message with the distribution of the MLN Matters article stating that the article was prepared and is being distributed as a result of this Settlement Agreement. 12. CMS will afford Plaintiffs’ Counsel 21 days to review and provide a single set of written comments on the written educational materials created as part of settlement before the materials are finalized and issued. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. If Plaintiffs request, CMS will also afford Plaintiffs’ Counsel a second opportunity for review and comment on these written educational materials before they are finalized and disseminated: Plaintiffs’ Counsel will have 14 days to review any subsequent changes made and either provide a second set of written comments or communicate its comments at a meeting between counsel. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. CMS shall retain final authority as to the ultimate content of the written educational materials. CMS,
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through counsel, agrees to tell Plaintiffs’ Counsel (through Plaintiffs’ Lead Counsel) when the written educational materials have been distributed.
13. In providing any set of recommendations described in paragraph 12 above, Plaintiffs agree to collect all recommendations into one consolidated document to be provided by Plaintiffs’ Lead Counsel.
14. Other educational initiatives: a. National Call for providers & suppliers: CMS will conduct a National Call for providers and suppliers for the sole purpose of communicating the policy clarifications reflected by the manual revisions agreed to as part of this Settlement Agreement as detailed in Sections IX.6 through IX.8. An audio and written transcript of the call will be made available on the CMS website, www.CMS.gov, for those providers and suppliers unable to attend the call. b. National Call for contractors & adjudicators: CMS will conduct a National Call for contractors, ALJs, medical reviewers, and agency staff to communicate the policy clarifications reflected by the manual revisions agreed to as part of this Settlement Agreement as detailed in Sections IX.6 through IX.8. Following this National Call, CMS will provide all contractors and adjudicators invited to the call a summary of the call, consisting of a copy of the PowerPoint slides presented and the summary prepared by CMS of the questions posed and answers provided during this National Call.
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c. For both National Calls, CMS will prepare a deck of PowerPoint slides to assist in communicating the policy clarifications reflected by the manual revisions. Before these slides are finalized, CMS will afford Plaintiffs’ Counsel at least 7 days to review and provide a single set of written comments on the slides. CMS will take any recommendations from Plaintiffs’ Counsel under advisement and will make a good faith effort to utilize in the final presentation Plaintiffs’ Counsel’s reasonable recommendations that are limited to the coverage standards as clarified in Sections IX.6 through IX.8 and that are consistent with those coverage standards as well as all other statutory and regulatory requirements. CMS shall retain final authority as to the ultimate content of these PowerPoint slides. In providing any set of recommendations described in this paragraph, Plaintiffs agree to collect all recommendations into one consolidated document to be provided by Plaintiffs' Lead Counsel. d. Open Door Forum (ODF):
Following the issuance of the manual revisions made pursuant to this Settlement Agreement, CMS will include an announcement of the manual revisions and a reference to the above-described National Call for providers and suppliers as agenda items for a Home Health, Hospice, and Durable Medical Equipment ODF, a Hospital ODF, a Physicians, Nurses and Allied Health Professionals ODF, and a Skilled Nursing Facilities/Long-Term Care ODF. Following the issuance of the manual revisions, CMS
18

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 19 of 32
will also include an announcement of the manual revisions as an agenda item for a Medicare Beneficiary ombudsman ODF. e. CMS will post the Program Transmittal and MLN Matters article on CMS’s website, www.CMS.gov. CMS will inform Plaintiffs’ Lead Counsel when the Program Transmittal is issued. 15. CMS will make a good faith effort to notify Plaintiffs’ Lead Counsel, in advance of the National Calls and Open Door Forums described above in Section IX.14 to be held to carry out the educational campaign provided in the settlement agreement. Plaintiffs and Plaintiffs’ Counsel will be permitted to attend the Open Door Forums and the National Call for providers and suppliers described above in Section IX.14. Following the National Call for contractors and adjudicators described above in Section IX.14.b, CMS, through counsel, will provide to Plaintiffs’ Counsel (1) a certification that this National Call occurred; (2) a certification that guidance was given consistent with the PowerPoint slides described in Section IX.14.c and the manual revisions revised as part of this Settlement Agreement as set forth in Sections IX.6 through IX.8; (3) a certification that any questions from contractors or adjudicators were answered consistent with those manual revisions; and (4) a summary prepared by CMS of the questions posed and answers provided during this National Call. 16. CMS agrees to finalize and issue the revised manual provisions and to carry out the educational campaign provided by the settlement agreement within one year of the Approval Date.
Accountability Measures Claims Review
19

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 20 of 32
17. CMS will engage in the following measures: a. Sampling of QIC Decisions: CMS will develop protocols for reviewing a random sample of SNF, HH, and OPT coverage decisions by the QICs (for claims under Parts A, B, and C) under the SNF, HH, and OPT maintenance coverage standards set forth above in Sections IX.6 through IX.7 to determine overall trends and any problems in the application of these maintenance coverage standards. CMS will make a reasonable effort to draw the random sample of QIC decisions to reflect claims initially decided by a representative cross-section of contractors and MA Organizations. Plaintiffs’ Counsel may provide suggestions to CMS as to how to identify appropriate claims for sampling, e.g., through target diagnosis codes. b. CMS will provide updates to Plaintiffs’ Counsel regarding the results of this random sampling during the bi-annual meetings referenced below in Section IX.17.f, beginning with the first meeting following completion of the educational campaign (which will be the second of the five bi-annual meetings). CMS’s obligation to conduct sampling of QIC decisions as described above in Section IX.17.a pursuant to this Settlement Agreement terminates with the results reported at the fifth and final of the bi-annual meetings. c. For any QIC decision from the random sample in which CMS finds reason to believe an error was made in applying the correct SNF, HH, and OPT maintenance coverage standards as set forth in Sections
20

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 21 of 32
IX.6 and IX.7, CMS will contact the QIC to determine whether an error was made. For those decisions in which an error by the QIC is confirmed, CMS will direct, or request if the agency does not have authority to direct, the QIC to correct its error. d. If the random sampling indicates that a particular Medicare contractor or MA organization is not applying the correct SNF, HH, and OPT maintenance coverage standards as set forth in Sections IX.6 and IX.7, CMS will address this issue directly with that entity. The manner in which CMS addresses the issue will be within its discretion. e. Review of Individual Claims Determinations: To address any individual beneficiary claims determinations that Plaintiffs believe were not decided in accordance with the SNF, HH, and OPT maintenance coverage standards as set forth above in Sections IX.6 and IX.7, CMS will agree to review and address individual claims determinations as follows:
1. During the bi-annual meetings referenced below in Section IX.17.f, Plaintiffs will present CMS (through Plaintiffs’ Lead Counsel) individual claims determinations it believes were not decided in accordance with the SNF, HH, and OPT maintenance coverage standards as set forth in Sections IX.6 and IX.7. The total number of such individual claims determinations Plaintiffs’ Counsel presents over the course of all bi-annual meetings is not to exceed 100.
21

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 22 of 32
2. CMS will direct, or request if the agency does not have authority to direct, the pertinent Medicare contractors or MA Organizations to review and evaluate these claims and related documentation. If the review of such claims indicates that a particular Medicare contractor or MA organization is not applying the correct SNF, HH, and OPT maintenance coverage standard as set forth in Sections IX.6 and IX.7, CMS will address this issue directly with that entity. The manner in which CMS addresses the issue will be within its discretion. Workload permitting, CMS will provide updates to Plaintiffs’ Lead Counsel regarding the action taken on these cases during the subsequent bi-annual meeting referenced below in Section IX.17.f , provided that CMS receives proper authorization from the beneficiary.
f. Bi-Annual Meetings: CMS will meet with Plaintiffs’ Counsel on a biannual basis to discuss the results of the sampling of claims data and the agency’s review of the individual claims determinations as discussed above in Sections IX.17.a-b and IX.17.e. The meetings can also be used to bring any issues related to the settlement to the agency’s attention. The first of these meetings will take place following the issuance of the revised manual provisions and prior to the completion of the educational
22

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 23 of 32
campaign, and meetings will continue on a bi-annual basis thereafter for a total of five (5) meetings. 18. The Parties recognize that Defendant's obligations are met under the Settlement Agreement once it has complied with the terms of this Settlement Agreement, and that Defendant is not guaranteeing to Plaintiffs that certain results will be achieved once the steps set forth in this Settlement Agreement have been implemented.
X. ATTORNEY’S FEES Defendant agrees to pay reasonable and appropriate attorney’s fees, costs, and expenses related to work performed by Plaintiffs’ Counsel in the litigation and settlement of this matter up until the Approval Date, subject to appropriate documentation and exercise of business judgment by Plaintiffs and Plaintiffs’ Counsel, pursuant to the Equal Access to Justice Act. For work performed by Plaintiffs’ Counsel after the Approval Date, Defendant agrees to pay reasonable and appropriate attorney’s fees, costs, and expenses only for the post-Approval Date work specified in this Settlement Agreement, to be capped at $300,000, subject to appropriate documentation and exercise of business judgment by Plaintiffs and their attorneys and pursuant to the Equal Access to Justice Act. However, if Plaintiffs initiate proceedings to enforce this Settlement Agreement, as described above, and if the Court finds that Defendant has not complied with the Settlement Agreement, Plaintiffs reserve the right to seek the payment of additional fees, costs, and expenses in connection with that enforcement proceeding that will not be subject to the above cap. Plaintiffs’ Lead Counsel may submit request(s) for postApproval fees to Defendant’s Counsel for periods no less than 12 months in length, except for the last period if one or more earlier periods has been for more than 12 months.
23

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 24 of 32
In the event that the parties are unable to agree upon the amount of fees, Plaintiffs may retain the right to file a fee petition with the Court. Notwithstanding their agreement to limit any post-Approval attorney’s fees, costs, and expenses to the above fee cap, Plaintiffs and Plaintiffs’ Counsel object to the principle of a fee cap and reserve their right to object to such a cap in future cases.
XI. CLASS CERTIFICATION AND RELIEF Class Definition
1. Defendant will stipulate to the certification of a class pursuant to Federal Rule of Civil Procedure 23(b)(2) consisting of all Medicare beneficiaries who:
a. received skilled nursing or therapy services in a skilled nursing facility, home health setting, or outpatient setting; and b. received a denial of Medicare coverage (in part or in full) for those services described in the previous paragraph based on a lack of improvement potential in violation of the SNF, HH, or OPT maintenance coverage standards as defined above in section Sections IX.6 and IX.7 and that denial became final and non-appealable on or after January 18, 2011; and c. seek Medicare coverage on his or her own behalf; the definition of class members specifically excludes providers or suppliers of Medicare services or a Medicaid State Agency.
Re-Review Relief for Certain Members of the Class
24

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 25 of 32
2. Certain members of the class are eligible for re-review of the claim denials described above in Section XI.1.b, if the following requirements are met:
a. The services described above in Section XI.1.a that are the subject of the denial described above in Section XI.1.b must not have been covered or paid for by any third-party payer or insurer or Medicare, except in the case of an individual Medicare beneficiary whose services were paid for by Medicaid and who paid for the service or is personally or financially liable or subject to recovery for the services; and b. There must not have been a basis for the denial of the claim for Medicare coverage that was separate and independent from the alleged failure to apply the SNF, HH, or OPT maintenance coverage standards as defined above in Sections IX.6 and IX.7. A separate and independent basis for denial would include the failure to satisfy any procedural requirement, any Medicare eligibility requirement, or any threshold requirement for coverage, but a conclusory determination that services were not “reasonable and necessary,” were not “medically necessary,” or that coverage is denied using other conclusory, non-specific language, that may be based on a failure to apply the SNF, HH, or OPT maintenance coverage standards as defined in Sections IX.6 and IX.7 above would not be such a separate and independent basis for denial. 3. Claim denials described in Section XI.1.b that become final and nonappealable after the End of the Educational Campaign are not eligible for re-review under this Section (XI).
25

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 26 of 32
4. Claims of class members other than of the Named Plaintiffs that are currently the subject of any lawsuit pending in an Article III United States Court or have been the subject of a final, non-appealable judgment by such courts are not eligible for rereview under this Section (XI).
5. Only class members on their own behalf may receive re-review of claims under this section. No provider or supplier of Medicare services or Medicaid State Agency is permitted to receive re-review under this section on behalf of or by assignment from a class member.
6. Class members who are eligible for re-review of claim denials will be partitioned into two groups.
a. Group 1 consists of all class members who received a final, nonappealable denial of Medicare coverage (in part or in full) where that denial became final and non-appealable after January 18, 2011 and up to and including the Approval Date. b. Group 2 consists of all class members who received a final, nonappealable denial of Medicare coverage (in part or in full) from the day after the Approval Date through and including the End of the Educational Campaign. 7. Group 1 class members seeking re-review relief as set forth in this Section (XI) will be required to identify themselves and their final, non-appealable denials to CMS no later than six (6) months after the End of the Educational Campaign. Group 2 class members seeking re-review relief as set forth in this Section (XI) will be
26

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 27 of 32
required to identify themselves and their final, non-appealable denials to CMS no later than twelve (12) months after the End of the Educational Campaign.
8. For each Group 1 or 2 class member who identifies himself or herself to CMS within the specified timeframe for re-review as set forth in the previous paragraph, the agency will direct, or request if the agency does not have the authority to direct, the contractor or adjudicator who last denied the class member’s claim for Medicare coverage to re-review the claim under the clarified maintenance coverage standards set forth above in Sections IX.6 and IX.7, subject to the exceptions described above in Sections XI.4 and XI.5.
9. When results of the re-review process confirm that the claim was denied in error and that the care should have been covered by Medicare, the agency will reimburse for that care, or, if the agency does not have the authority to reimburse, request reimbursement for the class member for that care, subject to applicable Medicare reimbursement limits.
10. Within 10 days of Approval of this Settlement Agreement, Defendant will inform Plaintiffs’ Lead Counsel of the process, including to whom class members should identify themselves (pursuant to Section XI.7 through XI.8), by which class members should identify themselves in order to obtain re-review.
11. Within 30 days after the End of the Educational Campaign, Plaintiffs’ Lead Counsel shall provide Defendant with the final claim denial that Ms. Jimmo received that is at issue in this lawsuit. Defendant shall promptly process Ms. Jimmo’s claim under the re-review process as set forth in Section XI.2 through XI.10. Defendant
27

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 28 of 32
shall make a good faith effort to issue a final decision on Ms. Jimmo’s claim, if appropriate, as soon as practicable.
XII. COMPLIANCE WITH LEGAL AUTHORITY The parties recognize that Defendant is required to comply with applicable statutes and regulations, including any future revisions to the statutes and regulations that govern Medicare coverage, and that nothing in this Settlement Agreement shall prohibit Defendant from modifying its policies and procedures to comply with any relevant statutory or regulatory changes, even if such modifications are made during the period of the Court’s continuing jurisdiction under this Settlement Agreement, or from otherwise changing Defendant’s regulations in a manner consistent with the Administrative Procedure Act. If Plaintiffs’ Counsel believes that any such modifications to Defendant’s policies and procedures, such as the Medicare Benefits Policy Manual, are not authorized by any statutory or regulatory changes, and that any such modifications would constitute a breach of any of the provisions of this Settlement Agreement, they reserve the right to initiate the Dispute Resolution process in Section VIII.
XIII. RELEASE 1. In consideration for the promises of Defendant as set forth in this Settlement Agreement, the Named Plaintiffs and all Class Members, and their heirs, administrators, successors, or assigns (together, the “Releasors”), hereby release and forever discharge Defendant and the United States Department of Health and Human Services (HHS), along with Defendant's and HHS's administrators, successors, officers, employees, and agents (together, the “Releasees”) from any and all claims and causes of action that have been asserted or could have been asserted in this action by reason of, or
28

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 29 of 32
with respect to, Plaintiffs' allegations that Defendant has illegally applied, or has failed to properly prevent the application of, an Improvement Standard under which Medicare coverage of skilled services is denied on the basis that a Medicare beneficiary is not improving, without regard to an individualized assessment of the beneficiary’s medical condition and the reasonableness and necessity of the treatment, care or services in question.
2. The above release shall not affect the right of any Class Member to seek any and all individual relief that is otherwise available in satisfaction of an individual claim against Defendant for Medicare benefits that is not based upon the allegations set forth in Section XIII.1 above.
3. The above release also shall not affect Plaintiffs' or any Class Member's right, if any, to bring a separate lawsuit challenging any new policy or procedure that is adopted by Defendant after the end of the Court's jurisdiction over this Settlement Agreement, as described in Section VI. Plaintiffs and Class Members will have no right to claim that such a change in policies or procedures violates the Settlement Agreement, but do not waive any right to claim that the new policy or procedure violates the Social Security Act, Defendant's regulations, or any other provision of law.
XIV. NO ADMISSION OF LIABILITY Neither this Settlement Agreement nor any order approving this Settlement Agreement is or shall be construed as an admission by Defendant of the truth of any of the allegations set forth in the First Amended Complaint or the validity of the claims
29

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 30 of 32

asserted in the First Amended Complaint, or of Defendant's liability for any of those claims.

The undersigned representatives of the parties certify that they are fully authorized to consent to the Court’s entry of the terms and conditions of this Settlement Agreement.

Dated:

October 16, 2012

/s/ Judith Stein (by permission) JUDITH STEIN Executive Director Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 jstein@medicareadvocacy.org (860) 456-7790 Fax: (860) 456-2614

Dated:

October 16, 2012

/s/ Gill Deford (by permission) GILL DEFORD Director of Litigation Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226 gdeford@medicareadvocacy.org (860) 456-7790 Fax: (860) 456-2614

Dated:

October 16, 2012

/s/ Michael Benvenuto (by permission) MICHAEL BENVENUTO Director, Medicare Advocacy Project Vermont Legal Aid 264 North Winooski Avenue Burlington VT, 05402 mbenvenuto@vtlegalaid.org

30

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 31 of 32

(802) 863-5620

DAVID J. BERGER MATTHEW R. REED Wilson Sonsini Goodrich & Rosati 650 Page Mill Road Palo Alto, CA 94306 DBerger@wsgr.com MReed@wsgr.com (650) 493-9300 Fax: (650) 493-6811

Counsel for Plaintiffs

Dated:

October 16, 2012

STUART F. DELERY Acting Assistant Attorney General TRISTRAM J. COFFIN United States Attorney

SHEILA M. LIEBER Deputy Director, Federal Programs Branch

/s/ Steven Y. Bressler STEVEN Y. BRESSLER (D.C. Bar #482492) M. ANDREW ZEE (CA Bar #272510) Attorneys Federal Programs Branch U.S. Department of Justice, Civil Division P.O. Box 883 Washington, DC 20044 Telephone: (202) 305-0167 Fax: (202) 616-8470 Email: Steven.Bressler@usdoj.gov

Counsel for Defendant

WILLIAM B. SCHULTZ Acting General Counsel JANICE L. HOFFMAN Associate General Counsel WILLIAM ALVARADO RIVERA Acting Deputy Associate General Counsel SUSAN MAXSON LYONS KIRSTEN FRIEDEL RODDY

31

Case 5:11-cv-00017-cr Document 82-1 Filed 10/16/12 Page 32 of 32 Attorneys U.S. Department of
Health and Human Services Of Counsel for Defendant
32

 
 Case 5:11-cv-00017-cr Document 86 Filed 11/20/12 Page 1 of 3

U.S. DiS ';' OISTRfCT
FIt r:
UNITED STATES DISTRICT COURT

OUR T l1Oli'

FOR THE

2012 NOV 20 PN 4: 54

DISTRICT OF VERMONT

CLERK

BY

~~.

DEPUTY CLERK

GLENDA JIMMO, et aI.,

)

)

Plaintiffs,

)

)

vs.

)

Case No. 5:1l-cv-17

)

)

KATHLEEN SEBELIUS, Secretary of

) 


Health & Human Services,

)

)

Defendant.

)

ORDER PRELIMINARILY APPROVING SETTLEMENT AGREEMENT, 
 PRELIMINARILY CERTIFYING THE CLASS, APPROVING CLASS 
 NOTICE, AND SETTING FAIRNESS HEARING 
 The court having fully considered Plaintiffs' and Defendant's Joint Motion
for Preliminary Approval of the Settlement Agreement and Class Notice, IT IS HEREBY ORDERED that: 1. The proposed Settlement Agreement and the settlement it embodies are PRELIMINARILY APPROVED. Final approval is subject to a fairness hearing where any objections of members of the Class will be heard. 2. The proposed Class, as set forth in the Settlement Agreement, preliminarily meets the requirements for certification under Rule 23 of the Federal Rules of Civil Procedure:

Case 5:11-cv-00017-cr Document 86 Filed 11/20/12 Page 2 of 3
a. The numerosity requirement of Fed. R. Civ. P. 23(a)(1) is met as the number of class members is sufficiently large such that joinder of all members is impracticable;
b. The commonality requirement of Fed. R. Civ. P. 23(a)(2) is met because the class claims stem from the same alleged conduct and present common questions of law and fact;
c. The typicality requirement of Fed. R. Civ. P. 23(a)(3) is met because plaintiffs' claims are the same as the claims of the class members;
d. The adequacy of representation requirement of Fed. R. Civ. P. 23(a)(4) is met. Plaintiffs have adequately represented the interests of the proposed class and have retained experienced and competent counsel who have negotiated a non-collusive settlement;
e. The Fed. R. Civ. P. 23(b)(2) requirements are satisfied. The Settlement Agreement provides injunctive relief that is generally applicable to the class.
The proposed Class is therefore PRELIMINARILY CERTIFIED under Rule 23(b)(2) for settlement purposes. 3. Pending the determination of the fairness of the Settlement Agreement, all further litigation ofthis action is hereby STAYED. 4. The proposed Notice of Proposed Settlement of Class Action and of Fairness Hearing ("Class Notice") and proposed plan for distribution of Class Notice are APPROVED. Notice will be distributed within twenty
2 


Case 5:11-cv-00017-cr Document 86 Filed 11/20/12 Page 3 of 3
(20) days of this order or by December 10,2012. The Notice, however, must be amended to reflect the binding nature of any release and judgment. 5. Class members objecting to the terms of the settlement must provide their objections in writing to Class Counsel as outlined in the Class Notice, Section D. Written objections must be forwarded to Class Counsel no later than fourteen (14) days before the fairness hearing, or by January 10,2013. Class counsel must record the date of receipt of the objection and forward it, via electronic mail, to Defense counsel within five (5) business days of receipt. Class counsel must file the original objections with this court no later than January 18,2013. 6. A hearing to determine whether the settlement agreement is fair, reasonable and adequate will be held on January 24, 2013 at 10:00 a.m., at the United States District Court for the District of Vermont, 151 West Street, Rutland, Vermont 05701. SO ORDERED.
1'--­
Dated at Rutland, in the District of Vermont, this 2..0 day of November, 2012.
Chri~-=-
United States District Court
3

 
 Case 5:11-cv-00017-cr Document 92 Filed 01/24/13 Page 1 of 2

UNITED STATES DISTRICT COURT DISTRICT OF VERMONT

2m3 J~N 24 PH I: 05

GLENDA JlMMO, et al.
Plaintiffs, vs.
KATHLEEN SEBELIUS, Secretary of Health and Human Services,
Defendant.

CLERK

) )

BY-

~~,----
eC:PUTY CLEHK

) 


) 


) 


) 


) Case No. 5:11-cv-17

)

)

) 


) 


) 


) 


ORDER GRANTING FINAL APPROVAL OF SETTLEMENT AGREEMENT 
 AND DIRECTING ENTRY OF FINAL JUDGMENT 


The court has carefully considered the parties' proposed Settlement Agreement ("Agreement"), filed on October 16,2012 (Doc. 82-1), as well as the supporting papers. A fairness hearing was held on January 24, 2013.
The court finds that the Agreement is fair, adequate, and reasonable. It provides meaningful injunctive relief to the Class, including comprehensive clarifications of certain Medicare coverage standards. The Agreement follows a lengthy period of litigation and settlement negotiation. It is the result of arm's ­ length negotiations between the parties.
Notice has been given to the Class in the manner directed by the court. Class counsel received one written objection which the court has considered and found not to abrogate the fairness of the Agreement.

Case 5:11-cv-00017-cr Document 92 Filed 01/24/13 Page 2 of 2
The parties have stipulated to the certification of a class as set forth in Section XI of the Agreement. The court finds that the class meets the requirements for certification under Rule 23 of the Federal Rules of Civil Procedure for the reasons specified in the Order Preliminarily Approving the Settlement Agreement and Preliminarily Approving the Class (Doc. 86).
Therefore, IT IS HEREBY ORDERED that: 1. Final approval of the Settlement Agreement is granted. 2. The Class as set forth in Section XI of the Agreement is certified under
Rule 23(b)(2). 3. The court directs entry of Final Judgment, dismissing this action with
prejudice, pursuant to the terms of the Agreement and Federal Rule of Civil Procedure 41(a)(2). The Final Judgment shall incorporate and be subject to the terms of the Settlement Agreement, as set forth in Section V of the Agreement. 4. The court will retain jurisdiction over this matter for the limited purposes and time period set forth in Section VI of the Agreement. SO ORDERED.
Iv-.
Dated in Rutland, in the District of Vermont, this )...4 day of January, 2013.
2 


 
 Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 1 of 23
U.S. District Court District of Vermont (Rutland) CIVIL DOCKET FOR CASE #: 5:11−cv−00017−cr

CLOSED

Jimmo et al v. Health and Human Services Secretary Assigned to: Chief Judge Christina Reiss Cause: 42:1395 HHS: Adverse Reimbursement Review
Plaintiff

Date Filed: 01/18/2011 Date Terminated: 01/25/2013 Jury Demand: None Nature of Suit: 890 Other Statutory Actions Jurisdiction: U.S. Government Defendant

Glenda Jimmo on behalf of herself and all others similarly situated

represented by Alice Bers , Esq. Center for Medicare Advocacy, Inc. 11 Ledgebrook Drive Mansfield, CT 06250 (860) 456−7790 Fax: (860) 456−2614 Email: abers@medicareadvocacy.org PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. Wilson Sonsini Goodrich &Rosati, P.C. 650 Page Mill Road Palo Alto, CA 94306−1050 (650) 493−9300 Fax: (650) 493−6811 Email: DBerger@wsgr.com PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green Vermont Legal Aid, Inc. 7 Court Street P.O. Box 606 Montpelier, VT 05602−0606 (802) 223−6377 x330 Email: dgreen@vtlegalaid.org ATTORNEY TO BE NOTICED

Gill Deford , Esq. Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226−0350 (860) 456−7790 Fax: (860) 456−2614 Email: gdeford@medicareadvocacy.org ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226−0350 (860) 456−7790 Email: jstein@medicareadvocacy.org PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. Center for Medicare Advocacy, Inc. P.O. Box 350

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 2 of 23

Willimantic, CT 06226−0350 (860) 456−7790 Email: mmurphy@medicareadvocacy.org PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. Wilson Sonsini Goodrich &Rosati, P.C. 650 Page Mill Road Palo Alto, CA 94306−1050 (650) 493−9300 Fax: (650) 493−6811 Email: MReed@wsgr.com PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto Vermont Legal Aid, Inc. 264 North Winooski Avenue P.O. Box 1367 Burlington, VT 05402−1367 (802) 863−2871 Email: mbenvenuto@vtlegalaid.org ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226−0350 (860) 456−7790 TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. Center for Medicare Advocacy, Inc. 1025 Connecticut Ave., N.W., Suite 709 Washington, DC 20036 (202) 293−5760 PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. Center for Medicare Advocacy, Inc. P.O. Box 350 Willimantic, CT 06226−0350 (860) 456−7790 PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
KR on behalf of herself and all others similarly situated as Guardian for Kenneth Roberts

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 3 of 23

Plaintiff
Miriam Katz on behalf of herself and all others similarly situated

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED
Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED
Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED
Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Devon J. Green (See above for address) ATTORNEY TO BE NOTICED
Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED
Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 4 of 23

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
Edith Masterman on behalf of herself and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 5 of 23

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
Mary Patricia Boitano on behalf of herself and all others similarly situated TERMINATED: 06/22/2011

represented by Alice Bers , Esq. (See above for address) ATTORNEY TO BE NOTICED
Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 6 of 23

National Committee to Preserve Social Security and Medicare on behalf of themselves and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
National Multiple Sclerosis Society on behalf of themselves and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 7 of 23

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
Parkinson's Action Network on behalf of themselves and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 8 of 23

PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
Paralyzed Veterans of America on behalf of themselves and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 9 of 23

PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
American Academy of Physical Medicine and Rehabilitation on behalf of themselves and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 10 of 23

PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
Rosalie McGill on behalf of herself and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 11 of 23

PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
United Cerebral Palsy on behalf of themselves and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
Kenneth Roberts on behalf of himself and all others similarly situated

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq.

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 12 of 23

(See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
Alzheimer's Disease and Related Disorders Association, Inc. doing business as Alzheimer's Assocation

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 13 of 23

ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED

Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED

Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Plaintiff
George Boitano Trustee of Mary Patricia Boitano's Revocable Trust, on behalf of himself and all others similarly situated other Mary Patricia Boitano's Revocable Trust

represented by Alice Bers , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
David J. Berger , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Devon J. Green (See above for address) ATTORNEY TO BE NOTICED

Gill Deford , Esq. (See above for address) ATTORNEY TO BE NOTICED

Judith A. Stein , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Margaret Murphy , Esq. (See above for address) PRO HAC VICE

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 14 of 23
ATTORNEY TO BE NOTICED
Matthew R. Reed , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Michael Kelly Benvenuto (See above for address) ATTORNEY TO BE NOTICED
Nancy V. Gifford , Esq. (See above for address) TERMINATED: 09/13/2011 PRO HAC VICE ATTORNEY TO BE NOTICED
Toby S. Edelman , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED
Wey−Wey Kwok , Esq. (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

V.
Defendant
Health and Human Services Secretary Kathleen Sebelius

represented by Kevin J. Doyle , AUSA United States Attorney's Office District of Vermont P.O. Box 570 Burlington, VT 05402−0570 (802) 951−6725 Email: kevin.doyle@usdoj.gov TERMINATED: 05/23/2011 LEAD ATTORNEY ATTORNEY TO BE NOTICED
M. Andrew Zee , AUSA U.S. Department of Justice, Civil Division Federal Programs Branch Room 7314 20 Massachusetts Avenue, NW Washington, DC 20530 (202) 305−8648 Fax: (202) 616−8460 Email: m.andrew.zee@usdoj.gov ATTORNEY TO BE NOTICED
Steven Y. Bressler , Esq. U.S. Department of Justice Civil Division, Federal Programs Branch 20 Massachusetts Avenue, N.W. Washington, DC 20530 202−305−0167 Fax: 202−616−8470 Email: steven.bressler@usdoj.gov ATTORNEY TO BE NOTICED
Tamra Moore , SAUSA U.S. Department of Justice, Civil Division

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 15 of 23
Federal Programs Branch Room 7220 20 Massachusetts Avenue, NW Washington, DC 20530 (202) 514−8095 Fax: (202) 616−8460 Email: Tamra.Moore@usdoj.gov ATTORNEY TO BE NOTICED

Date Filed 01/18/2011
01/18/2011
01/18/2011 01/18/2011
01/18/2011
01/31/2011 02/02/2011 02/04/2011
02/08/2011

# Docket Text
1 CLASS ACTION COMPLAINT for Declaratory, Injunctive and Mandamus Relief against Health and Human Services Secretary, Kathleen Sebelius filed by Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Mary Patricia Boitano, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Parkinson's Action Network, Paralyzed Veterans of America, and American Academy of Physical Medicine and Rehabilitation. Summonses issued. (Attachments: # 1 Civil Cover Sheet)(pam) (Entered: 01/18/2011)
2 MOTION to Seal Reference List by American Academy of Physical Medicine and Rehabilitation, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network. (Attachments: # 1 Reference List)(Images are sealed) (pam) (Entered: 01/18/2011)
3 MOTION for One Plaintiff to Proceed Under a Pseudonym by KR.(pam) (Entered: 01/18/2011)
4 MOTION for Class Certification, MOTION for Appointment of Class Counsel by American Academy of Physical Medicine and Rehabilitation, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network. (Attachments: # 1 Memorandum in Support)(pam) Text clarified on 1/19/2011 (jlh). (Entered: 01/18/2011)
5 MOTION to File Oversized Brief in Support of 4 MOTION for Class Certification and MOTION for Appointment of Class Counsel by American Academy of Physical Medicine and Rehabilitation, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network.(pam) (Entered: 01/18/2011)
7 ORDER granting 5 Motion to Exceed Page Limit. Signed by Chief Judge Christina Reiss on 1/31/2011. (This is a text only Order.) (cle) (Entered: 01/31/2011)
8 STIPULATED MOTION for Extension of Time to File Response/Reply as to 4 MOTION to Certify Class MOTION to Appoint Counsel, 3 MOTION for One Plaintiff to Proceed Under a Pseudonym by Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Doyle, Kevin) (Entered: 02/02/2011)
9 MOTION for Appearance Pro Hac Vice by American Academy of Physical Medicine and Rehabilitation, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network. (Attachments: # 1 Affidavit of Judith Stein, # 2 Affidavit of Margaret Murphy, # 3 Affidavit of Nancy Gifford, # 4 Affidavit of Wey−Wey Kwok, # 5 Affidavit of Toby Edelman, # 6 Text of Proposed Order)(jlh) (Entered: 02/04/2011)
10 ORDER granting 8 Motion for Extension of Time to File Response to pending motions. Signed by Chief Judge Christina Reiss on 2/3/2011. (This is a text only Order.) (cle) (Entered: 02/08/2011)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 16 of 23

02/10/2011 02/17/2011 03/03/2011
03/03/2011 03/03/2011
03/04/2011 03/09/2011 03/10/2011 03/14/2011 03/18/2011 03/22/2011 03/23/2011

11 ORDER granting 9 Motion for Admission Pro Hac Vice re: Judith A. Stein, Esq., Margaret Murphy, Esq., Nancy V. Gifford, Esq., Wey−Wey Kwok, Esq., and Toby S. Edelman, Esq. Signed by Chief Judge Christina Reiss on 2/8/2011. (This is a text only Order.) (cle) (Entered: 02/10/2011)
12 MOTION for Admission of DOJ Trial Attorney Steven Bressler With Exemption From the Requirement That Applicant Be Admitted To Another Federal District Court by Health and Human Services Secretary. (Attachments: # 1 Declaration of Steven Bressler, # 2 Text of Proposed Order, # 3 Certificate of Service)(Doyle, Kevin) (Entered: 02/17/2011)
13 AMENDED COMPLAINT against Health and Human Services Secretary filed by Paralyzed Veterans of America, American Academy of Physical Medicine and Rehabilitation, Miriam Katz, Parkinson's Action Network, Glenda Jimmo, KR, Mary Patricia Boitano, Edith Masterman, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Rosalie McGill, Alzheimer's Disease and Related Disorders Association, Inc., United Cerebral Palsy, Kenneth Roberts.(law) (Entered: 03/03/2011)
14 MOTION to Certify Class, MOTION to Appoint Counsel by Alzheimer's Disease and Related Disorders Association, Inc., Rosalie McGill, United Cerebral Palsy. (Attachments: # 1 Memorandum in Support)(law) (Entered: 03/03/2011)
15 MOTION to Seal Reference List re: 13 Amended Complaint by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Reference List (image is sealed))(law) (Entered: 03/03/2011)
16 ORDER granting 15 Motion to Seal. Sealing relates to personal identifying information unrelated to the merits of the case. Signed by Chief Judge Christina Reiss on 3/4/2011. (This is a text only Order.) (cle) (Entered: 03/04/2011)
17 ORDER granting 12 Motion for Admission of DOJ Trial Attorney Steven Bressler. Signed by Chief Judge Christina Reiss on 3/8/2011. (This is a text only Order.) (cle) (Entered: 03/09/2011)
18 STIPULATED MOTION for Extension of Time to File Response/Reply as to 4 MOTION to Certify Class MOTION to Appoint Counsel, 14 MOTION to Certify Class MOTION to Appoint Counsel, 13 Amended Complaint, by Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Doyle, Kevin) (Entered: 03/10/2011)
19 ORDER granting 18 Motion for Extension of Time to File Response to 4 and 14 Motions to Certify Class and 13 Amended Complaint. Signed by Chief Judge Christina Reiss on 3/11/2011. (This is a text only Order.) (cle) (Entered: 03/14/2011)
20 RESPONSE to 2 MOTION to Seal, 3 MOTION for One Plaintiff to Proceed Under a Pseudonym filed by Health and Human Services Secretary. (Bressler, Steven) (Entered: 03/18/2011)
21 ORDER granting 3 Motion for One Plaintiff to Proceed Under a Pseudonym. Signed by Chief Judge Christina Reiss on 3/21/2011. (This is a text only Order.) (cle) (Entered: 03/22/2011)
22 AFFIDAVIT of Service for summons and complaint served on Kathleen Sebelius on 1/19/2011 filed by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Certificate of Service)(Benvenuto, Michael) Date served corrected on 3/24/2011 (jlh). (Entered: 03/23/2011)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 17 of 23

03/24/2011 04/08/2011 04/11/2011 04/11/2011 04/12/2011 04/20/2011 04/25/2011 05/13/2011 05/16/2011
05/16/2011 05/17/2011
05/18/2011 05/23/2011

23 NOTICE OF DOCKET ENTRY CORRECTION re: 22 Affidavit of Service. The document image has been broken apart and reattached to the docket. The corrected images are also attached to this entry. (Attachments: # 1 Return Receipts) (jlh) (Entered: 03/24/2011)
24 UNOPPOSED MOTION for Leave to Exceed Page Limit re: Motion to Dismiss Amended Complaint by Health and Human Services Secretary.(Bressler, Steven) Text clarified on 4/11/2011 (jlh). (Entered: 04/08/2011)
25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, MOTION for Failure to State a Claim Upon Which Relief May Be Granted by Health and Human Services Secretary. (Attachments: # 1 Memorandum in Support, # 2 Exhibit 1, # 3 Exhibit 2)(Bressler, Steven). Added MOTION relief on 6/8/2011 (jlh). (Entered: 04/11/2011)
26 RESPONSE in Opposition re 4 MOTION to Certify Class MOTION to Appoint Counsel, 14 MOTION to Certify Class MOTION to Appoint Counsel filed by Health and Human Services Secretary. (Bressler, Steven) (Entered: 04/11/2011)
27 ORDER granting 24 Motion to File Memorandum of Law in Excess of Page Limit. Signed by Chief Judge Christina Reiss on 4/12/2011. (This is a text only Order.) (cle) (Entered: 04/12/2011)
28 UNOPPOSED MOTION for Extension of Time to File Response/Reply re: 4 Motion for Class Certification and for Appointment of Class Counseland UNOPPOSED MOTION to Exceed Page Limit by Glenda Jimmo.(Deford, Gill). Added MOTION for Leave to Exceed Page Limit and link on 4/20/2011 (law). (Entered: 04/20/2011)
29 ORDER granting 28 Unopposed Motion for Extension of Time to File Reply and Motion to Exceed Page Limit re: 4 Motion for Class Certification and for Appointment of Class Counsel . Signed by Chief Judge Christina Reiss on 4/25/2011. (This is a text only Order.) (cle) Link added on 4/26/2011 (law). (Entered: 04/25/2011)
30 NOTICE of Hearing re: 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, for Failure to State a Claim Upon Which Relief May Be Granted. Motion Hearing set for 7/14/2011 at 10:00 AM in Rutland Courtroom before Chief Judge Christina Reiss. (pam) (Entered: 05/13/2011)
31 REPLY to Response to 4 MOTION to Certify Class MOTION to Appoint Counsel, 14 MOTION to Certify Class MOTION to Appoint Counsel Reply Memorandum in Support of Plaintiff's' Motion for Class Certification and Appointment of Class Counsel filed by Glenda Jimmo. (Attachments: # 1 Affidavit of Judith A. Stein, # 2 Affidavit of Maureen L. Howard, # 3 Affidavit of Wey−Wey Kwok)(Deford, Gill) (Entered: 05/16/2011)
32 RESPONSE in Opposition re 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, MOTION for Failure to State a Claim Upon Which Relief May Be Granted filed by Glenda Jimmo. (Attachments: # 1 Affidavit of Devon J. Green)(Deford, Gill) Text clarified on 6/8/2011 (jlh). (Entered: 05/16/2011)
33 UNOPPOSED MOTION for Leave to Exceed Page Limit re 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, for Failure to State a Claim Upon Which Relief May Be Granted Motion For Leave To File A Reply Memorandum of 20 Pages, UNOPPOSED MOTION for Extension of Time to File Defendant's Reply Memorandum by Health and Human Services Secretary.(Bressler, Steven) (Entered: 05/17/2011)
34 MOTION to Withdraw by Attorney Kevin J. Doyle, AUSA for Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Doyle, Kevin) Text clarified on 5/20/2011 (jlh). (Entered: 05/18/2011)
35 ORDER granting 34 Motion to Withdraw as Attorney re: Kevin J. Doyle, Esq. Signed by Chief Judge Christina Reiss on 5/23/2011. (This is a text only Order.) (cle) (Entered: 05/23/2011)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 18 of 23

05/26/2011 06/01/2011 06/02/2011 06/06/2011 06/07/2011 06/07/2011 06/08/2011
06/22/2011 06/29/2011 07/01/2011
07/14/2011
07/22/2011 07/28/2011

36 ORDER granting 33 Unopposed Motion to Exceed Page Limit and granting 33 Unopposed Motion for Extension of Time to File Reply Memorandum. Signed by Chief Judge Christina Reiss on 5/26/2011. (This is a text only Order.) (cle) (Entered: 05/26/2011)
37 SUGGESTION OF DEATH Upon the Record as to Plaintiffs' Statement Noting Death of Plaintiff Mary Patricia Boitano by Glenda Jimmo. (Deford, Gill) (Entered: 06/01/2011)
38 MOTION to Substitute Party as to Plaintiff Mary Patricia Boitano filed by Glenda Jimmo(Deford, Gill) Text clarified on 6/3/2011 (law). (Entered: 06/02/2011)
39 STATUS REPORT Re: Opposition to 25 Motion to Dismiss by Glenda Jimmo. (Attachments: # 1 Exhibit A and B)(Deford, Gill) Text clarified, link added on 6/7/2011 (jlh). (Attachment 1 replaced on 6/7/2011) (jlh). (Additional attachment(s) added on 6/7/2011: # 2 Exhibit B) (jlh). (Entered: 06/06/2011)
40 CONSENTED−TO MOTION for Extension of Time to File Response/Reply as to 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, MOTION for Failure to State a Claim Upon Which Relief May Be Granted filed by Health and Human Services Secretary(Bressler, Steven) Text clarified on 6/8/2011 (jlh). (Entered: 06/07/2011)
41 NOTICE OF DOCKET ENTRY CORRECTION re: 39 Status Report filed by Glenda Jimmo. The attachments were docketed as one image; the image has been broken apart and reattached to the docket as separate images. The exhibits are now attached to 39 as well as this entry. (Attachments: # 1 Exhibit B) (jlh) (Entered: 06/07/2011)
42 ORDER granting 40 Unopposed Motion for Extension of Time to File Reply as to 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, MOTION for Failure to State a Claim Upon Which Relief May be Granted. Signed by Chief Judge Christina Reiss on 6/7/2011. (This is a text only Order.) (cle) Link added on 6/8/2011 (jlh). (Entered: 06/08/2011)
43 ORDER granting 38 Motion to Substitute Party as to Plaintiff Mary Patricia Boitano. Signed by Chief Judge Christina Reiss on 6/22/2011. (This is a text only Order.) (cle) (Entered: 06/22/2011)
44 SECOND STATUS REPORT Re: Opposition to 25 Motion to Dismiss by Glenda Jimmo. (Attachments: # 1 Exhibit A, # 2 Exhibit B)(Deford, Gill) Link added on 6/30/2011 (jlh). (Entered: 06/29/2011)
45 REPLY to Response to 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, for Failure to State a Claim Upon Which Relief May Be Granted MOTION for Failure to State a Claim Upon Which Relief May be Granted filed by Health and Human Services Secretary. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Certificate of Service)(Bressler, Steven) (Entered: 07/01/2011)
46 MINUTE ENTRY for proceedings held before Chief Judge Christina Reiss: Motion Hearing re: 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, for Failure to State a Claim Upon Which Relief May Be Granted held on 7/14/2011. G. Deford, Esq., D. Green, Esq., and M. Benvenuto, Esq. present for Pltfs., T. Moore, SAUSA present for dft. Counsel make statements and Court makes inquires. ORDERED: 25 MOTION to Dismiss the Amended Complaint taken under advisement. (Court Reporter: Anne Henry) (pam) Text clarified on 7/17/2011 (law). (Entered: 07/14/2011)
47 MOTION for Leave to File Sur−Reply on 25 Motion to Dismiss filed by Glenda Jimmo (Attachments: # 1 Proposed Sur−Reply)(Deford, Gill) Text clarified on 7/25/2011 (law). (Entered: 07/22/2011)
48 ORDER granting 47 Motion for Leave to File Sur−Reply to 25 Motion to Dismiss the Amended Complaint. Signed by Chief Judge Christina Reiss on 7/28/2011. (This is a text only Order.) (cle) (Entered: 07/28/2011)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 19 of 23

08/02/2011 08/04/2011
08/05/2011 08/09/2011 08/09/2011 09/12/2011 09/13/2011 10/25/2011 11/04/2011
11/08/2011 11/16/2011 11/28/2011 12/08/2011

49 SURREPLY re 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, MOTION for Failure to State a Claim Upon Which Relief May be Granted filed by Glenda Jimmo. (Deford, Gill) Text clarified on 8/3/2011 (jlh). (Entered: 08/02/2011)
50 UNOPPOSED MOTION for Leave to File a Response to Plaintiffs' Surreply re: 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, MOTION for Failure to State a Claim Upon Which Relief May Be Granted filed by Health and Human Services Secretary (Attachments: # 1 Proposed Response)(Bressler, Steven) Link added &description of attachment clarified on 8/5/2011 (law). (Entered: 08/04/2011)
51 NOTICE of Recent Authority by Health and Human Services Secretary re 4 MOTION to Certify Class MOTION to Appoint Counsel, 14 MOTION to Certify Class MOTION to Appoint Counsel (Attachments: # 1 Wal−Mart Stores, Inc. v. Dukes, No. 10−277, 564 U.S. −−−− (June 20, 2011))(Bressler, Steven) (Entered: 08/05/2011)
52 ORDER granting 50 Unopposed Motion for Leave to File a Response to Plaintiff's Surreply re: 25 Motion to Dismiss. Signed by Chief Judge Christina Reiss on 8/9/2011. (This is a text only Order.) (pjl) (Entered: 08/09/2011)
53 RESPONSE to Suprreply re 25 MOTION to Dismiss the Amended Complaint for Lack of Subject Matter Jurisdiction or, in the Alternative, MOTION for Failure to State a Claim Upon Which Relief May be Granted by Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Moore, Tamra) Text clarified &link corrected on 8/9/2011 (law) (Entered: 08/09/2011)
54 MOTION to have Nancy V. Gifford, Esq. withdrawn as counsel for Plaintiffs filed by Glenda Jimmo.(Deford, Gill) Modified on 9/13/2011 (jlh). (Entered: 09/12/2011)
55 ORDER granting 54 Motion to Withdraw as Attorney re: Nancy V. Gifford. Signed by Chief Judge Christina Reiss on 9/13/2011. (This is a text only Order.) (cle) (Entered: 09/13/2011)
56 OPINION AND ORDER denying in part and granting in part 25 Motion to Dismiss for Lack of Subject Matter Jurisdiction; and denying 25 Motion to Dismiss for Failure to State a Claim Upon Which Relief May be Granted. Signed by Chief Judge Christina Reiss on 10/25/2011. (pam) (Entered: 10/25/2011)
57 MOTION for Partial Reconsideration re 56 Opinion and Order granting Motion to Dismiss the claims of Plaintiff Edith Masterman filed by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, George Boitano, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Memorandum in Support)(Deford, Gill) Text clarafied on 11/6/2011 (law). (Entered: 11/04/2011)
58 ANSWER to 13 Amended Complaint, by Health and Human Services Secretary.(Bressler, Steven) (Entered: 11/08/2011)
59 RESPONSE in Opposition re 57 MOTION for Partial Reconsideration re 56 Opinion and Order granting Motion to Dismiss the Claims of Plaintiff Edith Masterman filed by Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Bressler, Steven) Text clarified on 11/22/2011 (jlh). (Entered: 11/16/2011)
60 REPLY MEMORANDUM to Response to 57 Motion for Partial Reconsideration re 56 Opinion and Order granting Motion to Dismiss the Claims of Plaintiff Edith Masterman by Glenda Jimmo. (Deford, Gill) Text clarified on 11/29/2011 (jlh). (Entered: 11/28/2011)
61 NOTICE of Medicare Appeals Council Decision Denying Reopening for Plaintiff K.R. by KR. (Attachments: # 1 Supplement MAC Decision, # 2 Certificate of Service)(Green, Devon) (Entered: 12/08/2011)

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12/21/2011
12/23/2011 12/23/2011 12/23/2011
01/09/2012 01/09/2012 01/10/2012 02/08/2012 02/09/2012 03/09/2012 03/14/2012 05/07/2012

62 MOTION for Appearance Pro Hac Vice of Alice Bers, David J. Berger and Matthew R. Reed filed by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, George Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Affidavit of Alice Bers, # 2 Certificate of Good Standing of Alice Bers, # 3 Affidavit of David J. Berger, # 4 Certificate of Good Standing of David J. Berger, # 5 Affidavit of Matthew R. Reed, # 6 Certificate of Good Standing of Matthew R. Reed, # 7 Text of Proposed Order)(law) (Entered: 12/21/2011)
63 ORDER granting 62 Motion for Admission Pro Hac Vice re: Alice Bers, Esq., David J. Berger, Esq., and Matthew R. Reed, Esq. Signed by Chief Judge Christina Reiss on 12/22/2011. (This is a text only Order.) (cle) (Entered: 12/23/2011)
64 ORDER: denying 57 MOTION for Partial Reconsideration re 56 Opinion and Order granting Motion to Dismiss the Claims of Plaintiff Edith Masterman. Signed by Chief Judge Christina Reiss on 12/23/2011. (wjf) (Entered: 12/23/2011)
65 PROPOSED Stipulated Discovery Schedule/Order by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, George Boitano, Mary Patricia Boitano, Health and Human Services Secretary, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy.(Deford, Gill) (Entered: 12/23/2011)
66 STIPULATED DISCOVERY SCHEDULE/ORDER Discovery due by 7/9/2012. Motions due by 1/15/2013. Case to be trial ready no later than four months after the Court has ruled on Motions for Summary Judgment. Signed by Chief Judge Christina Reiss on 1/3/2012. (pam) (Entered: 01/09/2012)
67 STIPULATED MOTION to Stay Proceedings for 30 Days filed by Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Bressler, Steven) (Entered: 01/09/2012)
68 ORDER granting 67 Stipulated Motion to Stay Case for 30 Days. Signed by Chief Judge Christina Reiss on 1/10/2012. (This is a text only Order.) (cle) (Entered: 01/10/2012)
69 STIPULATED MOTION to Extend Stay of Proceedings By 30 Additional Days filed by Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Bressler, Steven) Event modified on 2/8/2012 (law). (Entered: 02/08/2012)
70 ORDER granting 69 Stipulated Motion to Extend Stay by 30 Additional Days. Signed by Chief Judge Christina Reiss on 2/9/2012. (This is a text only Order.) (cle) (Entered: 02/09/2012)
71 STIPULATED MOTION to Extend Stay of Proceedings by 60 Additional Days filed by Health and Human Services Secretary.(Zee, M.) (Entered: 03/09/2012)
72 ORDER granting 71 Stipulated Motion to Extend Stay of Proceedings by 60 Additional Days. Stay is extended for an additional 60 days as are all deadlines in the existing discovery schedule. A further stay is unlikely absent compelling circumstances. Signed by Chief Judge Christina Reiss on 3/14/2012. (This is a text only Order.) (cle) (Entered: 03/14/2012)
73 JOINT MOTION to Extend Stay of Proceedings to Permit the Parties to Continue Settlement Discussions and Request, in the Alternative, REQUEST for a Status Conference filed by Alzheimer's Disease and Related Disorders Association, Inc., George Boitano, Mary Patricia Boitano, Health and Human Services Secretary, Glenda Jimmo, KR, Miriam Katz, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Certificate of Service)(Bressler, Steven) Added

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 21 of 23

05/10/2012
05/22/2012 06/20/2012
07/20/2012
10/01/2012 10/02/2012 10/10/2012 10/15/2012 10/16/2012 11/13/2012

Motion on 5/7/2012 (law). (Entered: 05/07/2012)
74 ORDER granting in part 73 Motion to Stay; and granting 73 Motion for Hearing. The court will continue the stay until such time as a status conference may be held at which the parties may appear in person, by video conference or by telephone as they so request. At the status conference, the court will inquire as to whether it is likely that there will be further requests for a stay and if so of what anticipated duration. The court is mindful that this case implicates individuals beyond the parties before the court but is concerned that delay pre−resolution be minimized in anticipation that a request for additional time to implement any resolution will also be requested. Signed by Chief Judge Christina Reiss on 5/9/2012. (This is a text only Order.) (cle) (Entered: 05/10/2012)
75 NOTICE of Hearing: Status Conference set for 6/20/2012, 11:30 AM in Rutland Courtroom before Chief Judge Christina Reiss. (pjl) (Entered: 05/22/2012)
76 MINUTE ENTRY for proceedings held before Chief Judge Christina Reiss: Status Conference held on 6/20/2012. G. Deford, Esq. &M. Benvenuto, Esq. present for pltfs. AUSA M.A. Zee &S. Bressler, Esq. present by videoconference for dft. Court makes inquiries and counsel make statements regarding case status. Counsel states that they are working towards settlement and have set proposed deadlines for the settlement process. ORDERED: Parties are to inform the court by 7/20/2012 if there is a settlement in principle. The parties are to submit a written settlement document to the court by 10/1/2012. (Court Reporter: Linda O'Brien, O'Brien Court Reporting) (pjl) (Entered: 06/20/2012)
77 JOINT STATUS REPORT by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, George Boitano, Mary Patricia Boitano, Health and Human Services Secretary, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Deford, Gill) (Entered: 07/20/2012)
78 STIPULATED MOTION for Extension of Time to File Settlement Agreement filed by Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Bressler, Steven) (Entered: 10/01/2012)
79 ORDER granting 78 Stipulated Motion to Extend Deadline to Submit Written Settlement Agreement. Signed by Chief Judge Christina Reiss on 10/2/2012. (This is a text only Order.) (cle) (Entered: 10/02/2012)
80 SECOND STIPULATED MOTION for Extension of Time to File Settlement Agreement filed by Health and Human Services Secretary. (Attachments: # 1 Certificate of Service)(Zee, M.) (Entered: 10/10/2012)
81 ORDER granting 80 Second Stipulated Motion to Extend Deadline to Submit Written Settlement Document. Signed by Chief Judge Christina Reiss on 10/15/2012. (This is a text only Order.) (cle) (Entered: 10/15/2012)
82 JOINT NOTICE Regarding Settlement Agreement by Glenda Jimmo et al, Health and Human Services Secretary (Attachments: # 1 Proposed Settlement Agreement, # 2 Certificate of Service)(Bressler, Steven) Text clarified on 10/16/2012 (law). (Entered: 10/16/2012)
83 JOINT MOTION Preliminary Approval of Class Settlement and Notice Plan re 82 Notice of Settlement filed by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, George Boitano, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Memorandum in Support, # 2 Exhibit A , # 3 Text of Proposed Order)(Bers, Alice) Attachment name clarified on 11/14/2012 (jlh). (Entered: 11/13/2012)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 22 of 23

11/14/2012
11/19/2012 11/20/2012 11/29/2012 12/12/2012 01/18/2013 01/22/2013

84 ENTRY ORDER: The Joint Motion for Preliminary Approval of Class Settlement and Notice Plan (Doc. 83) and the proposed Order do not address the requirements for class certification under Fed. R. Civ. P. 23. See Ortiz v. Fibreboard Corp., 527 U.S. 817, 858−59 (1999) ("A fairness hearing [cannot] swallow the... protective requirements of Rule 23"); In re General Motors Corp. Pick−up Truck Fuel Tank Products Liability Litig., 55 F.3d 768, 792−93, 797 (3d Cir. 1995) (court may certify a class for settlement purposes only if it makes appropriate Rule 23 findings); 2 J. McLaughlin on Class Actions (3d ed. 2006) at 6.6 at 6−35 (in seeking preliminary approval, the "settling parties must demonstrate to the Court that (i) the proposed class meets all the requirements of [the] Rule other than the 'manageability' factor of Rule 23(b)(3)(D), and (ii) the settlement is within the range of reasonableness, so that it is worthwhile to notify class members of the proposed terms and conditions of the settlement, and schedule a formal fairness hearing."). The proposed notice to the class must contain the information required by Fed. R. Civ. P. 23(c)(2) or the parties must explain to the court why certain information may be omitted. Signed by Chief Judge Christina Reiss on 11/14/2012. (This is a text only Order.)(cle) (Entered: 11/14/2012)
85 SUPPLEMENTAL MEMORANDUM by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, George Boitano, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy in support of 83 JOINT MOTION Preliminary Approval of Class Settlement and Notice Plan re 82 Notice of Settlement. (Attachments: # 1 Text of Proposed Order)(Bers, Alice) Text clarified on 11/19/2012 (law). (Entered: 11/19/2012)
86 ORDER re 83 Preliminarily Approving Settlement Agreement, Preliminarily Certifying the Class, Approving Class Notice, and Setting Fairness Hearing. Notice to be distributed within twenty (20) days of this order or by December 10, 2012. The Notice, however, must be amended to reflect the binding nature of any release and judgment. Fairness Hearing to be held on January 24, 2013 at 10:00 a.m., at the United States District Court for the District of Vermont, 151 West Street, Rutland, Vermont 05701. Signed by Chief Judge Christina Reiss on 11/20/2012. (pac) (Entered: 11/20/2012)
87 NOTICE of Hearing: Fairness Hearing set for 1/24/2013, 10:00 AM in Rutland Courtroom before Chief Judge Christina Reiss. (pjl) (Entered: 11/29/2012)
88 RESPONSE to Order Approving Plan of Distribution by Alzheimer's Disease and Related Disorders Association, Inc., American Academy of Physical Medicine and Rehabilitation, George Boitano, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Edith Masterman, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2)(Bers, Alice) Attachment 1 description clarified 12/12/2012 (law). (Entered: 12/12/2012)
89 STATEMENT Concerning Receipt of Objection to Settlement Agreement re: 83 Preliminary Approving Settlement Agreement by Alzheimer's Disease and Related Disorders Association, Inc., George Boitano, Mary Patricia Boitano, Glenda Jimmo, KR, Miriam Katz, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Exhibit 1)(Bers, Alice) Text clarified on 2/20/2013 (jlh). (Entered: 01/18/2013)
90 PROPOSED Order by Alzheimer's Disease and Related Disorders Association, Inc., George Boitano, Glenda Jimmo, KR, Miriam Katz, Rosalie McGill, National Committee to Preserve Social Security and Medicare, National Multiple Sclerosis Society, Paralyzed Veterans of America, Parkinson's Action Network, Kenneth Roberts, United Cerebral Palsy. (Attachments: # 1 Text of Proposed Order)(Bers, Alice) (Entered: 01/22/2013)

Case: 5:11-cv-17 As of: 03/06/2013 11:07 AM EST 23 of 23

01/24/2013
01/24/2013 01/25/2013

91 MINUTE ENTRY for proceedings held before Chief Judge Christina Reiss: Final Fairness Hearing held on 1/24/2013. G. Deford, Esq., M. Benvenuto, Esq., &A. Bers, Esq. present for pltfs; S. Bressler, Esq. present for dft. Counsel make statements and court makes inquiries re: fairness, class representation, notification of settlement to class members, reasonableness of attorney fees, retention of jurisdiction over settlement. ORDERED: 4 , 14 MOTIONS to Certify Class and to Appoint Counsel superseded by request for 90 Final Approval of Settlement. Requirements as to Class satisfied; Settlement is fair, reasonable and adequate; Notice to Class is accepted. Final approval of Settlement is GRANTED, case to be dismissed with prejudice, court to retain jurisdiction to enforce settlement agreement and rule on attorney fees. Court to issue a written Order. (Court Reporter: A. Henry) (pac) (Entered: 01/24/2013)
92 ORDER Granting Final Approval of Settlement Agreement and Directing Entry of Final Judgment. Signed by Chief Judge Christina Reiss on 1/24/2013. (pac) (Entered: 01/24/2013)
93 JUDGMENT Case dismissed with prejudice pursuant to terms of the Settlement Agreement and Federal Rules of Civil Procedure 41(a)(2). Signed by Deputy Clerk on 1/25/2013. (pac) (Entered: 01/25/2013)