For Immediate Release
Contact: Matthew Shepard, Communications Director
MShepard@MedicareAdvocacy.org, (860) 456-7790
August 9, 2016 – Although required by law to issue decisions within 90 days of receiving a request for Administrative Law Judge (ALJ) review, Medicare’s Office of Hearings and Appeals (OMHA) was consistently taking a year or more to complete the task. Last week, however, a federal judge in Connecticut approved a settlement in a nationwide class action lawsuit that will ensure that Medicare beneficiaries receive speedy hearings and decisions from ALJs on their appeals of coverage denials. Exley v. Burwell, No. 14-cv-01230 (D.Conn., Aug. 1, 2016). A week after approving the Exley settlement, the same judge, Judge Jeffrey Meyer, in a related case challenging the 98% denial rate at the two levels of appeal below the ALJ level, denied the government’s motion to dismiss and granted the plaintiff’s motion for certification of a nationwide class. Sherman v. Burwell, No. 15-cv-1468 (D.Conn., Aug. 8, 2016).
Together, the two actions go a long way to resolving the ongoing problem in the Medicare system of administrative review, in which beneficiaries have routinely been denied at the paper-review stages and then been forced to wait indefinitely for a live ALJ hearing – where the chance of success jumps to the 60-70% range. Judith Stein, executive director of the Center for Medicare Advocacy, whose attorneys spearheaded both cases, saw the result in Exley and the possibilities for Sherman as critical to Medicare beneficiaries: “The great majority of beneficiaries lack representation, and the combination of rubber-stamp review at the lower levels and the extraordinary ALJ delay is so daunting that they give up. We hope and expect that these decisions will reverse that trend and make appeals of Medicare coverage denials timely and meaningful again.”
The main feature of the Exley settlement is that Medicare beneficiaries, whose appeals to the ALJ level represent only about 1-2% of all Medicare appeals, will be will be placed at the head of the line, greatly reducing the wait time for their decisions. Although OMHA has been informally following that policy, it will now be required to under the settlement. The vast majority of appellants are medical providers such as hospitals and suppliers – beneficiaries comprise only 1 to 2% of those requesting ALJ hearings. Prioritizing beneficiary appeals has negligible effect on the system as a whole while ensuring timely decisions for those who need them most. Other aspects of the settlement are also intended to make the process more beneficiary-friendly. And, significantly, the settlement will be enforceable until August 1, 2019. Robert Lessler, the son of the original lead plaintiff, Stephen Lessler (who waited over nine months after appealing for coverage of nursing facility care and died the day before OMHA issued a favorable ALJ decision), was gratified that at least his father’s ordeal would benefit others: “Justice for my father was delayed just a bit too long. I am very pleased, though, to know that through this litigation, no more Medicare beneficiaries will endure a similar delay.”
In the Sherman challenge to the denial rate at the first two levels of appeal, the government had sought to have the case dismissed on two jurisdictional grounds. The judge rejected both arguments, however, holding that the plaintiff was not required to exhaust administrative remedies in order to bring the claim to court and that the case had not been mooted out when coverage of the plaintiff’s individual claim was approved after the filing of the court case. The court also declined to dismiss the case by concluding that the plaintiff had stated a plausible claim for relief under the Due Process Clause in the contention that a “secret policy” was the cause of the dramatic rise in the denial rate.
In addition, Judge Meyer certified a nationwide class of Medicare beneficiaries of home health care services who received an adverse initial decision dated on or after January 1, 2012 and who received or will receive adverse decisions at the Redetermination and Reconsideration levels of appeal. The immediate effect of the decision is that the government must respond to the written discovery requests that plaintiff had submitted prior to the motion to dismiss. Gill Deford, one of plaintiff’s attorneys at the Center for Medicare Advocacy, saw the class certification as a significant development: “With a nationwide class certified, this case will not be going away, and the government will not be able to limit the breadth of discovery to the individual plaintiff’s situation. The extraordinary increase in the denial rate didn’t just happen by chance. Now, we should be able to find out how and why it happened.”
About The Center for Medicare Advocacy
Established in 1986, The Center for Medicare Advocacy, Inc. is a national nonprofit, nonpartisan law organization that provides education, advocacy and legal assistance to help older people and people with disabilities obtain access to Medicare and quality health care. CMA focuses on the needs of Medicare beneficiaries, people with chronic conditions, and those in need of long-term care. The organization is involved in writing, education, and advocacy activities of importance to Medicare beneficiaries nationwide.