CMA In the News - Center Victory Written Up In "Inside CMS"

CENTER VICTORY WRITTEN UP IN INSIDE CMS

From Inside CMS, Vol. 7, No. 5, pg. 12, February, 2004

COURT RULING LEAVES HHS FOOTING THE BILL FOR 2001 M+C LEGAL WRANGLE

Nearly two years after a federal court scolded CMS for altering a mandated Medicare+Choice (M+C) deadline and beneficiary education mailer, the agency is still continuing to pay for its actions.

The same court this week found that HHS acted in "bad faith" in 2001 when CMS postponed from July to mid-September the filing deadline for M+C plans to submit annual coverage information and announced it would not post comparative plan information to beneficiaries, as usual. As a result, the court ruled, HHS should foot the bill at market rates - for attorney's fees stemming from a successful lawsuit bought by advocacy groups against the 2001 policy change.

Describing defendant HHS Secretary Tommy Thompson's actions as "wanton conduct," U.S. District Court for the District of Columbia Judge Henry Kennedy granted the advocacy groups' motion for attorney fees, ordering the department to pay $173,922.

"The Secretary's actions in direct contradiction to congressional directives coupled with his failure to consult with or notify beneficiaries were 'extraordinary circumstances' warranting an award of bad faith attorney's fees," Kennedy said in his Feb. 23 decision (available on InsideHealthPolicy.com; see page 5 for details).

A ruling of bad faith entitles payment of attorney's fees at market rates. HHS disagreed that it acted in bad faith.

However, Kennedy said the secretary's "failure to abide by congressional mandates" necessitated the 2001 legal action bought by the Gray Panthers, Center for Medicare Advocacy and others. The secretary's actions required the groups to "undertake otherwise unnecessary litigation to vindicate plain legal rights," the judge stated.

The advocacy groups filed suit against CMS in 2001 when the agency pushed back the filing deadline for M+C plans to submit coverage information for the following year and stated that it would not post data comparing plans to Medicare beneficiaries in the agency's annual fall mailout. They won a preliminary injunction and the court ordered CMS to send out the health plan data in a supplemental mailing.

A year later, Kennedy granted the groups' motion for summary judgment and admonished CMS for ignoring the law (Inside CMS, Sept. 12, 2002, p1). Also in 2002, Congress legislatively pushed back the M+C filing deadline.