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On August 8, a federal judge in Connecticut largely denied the government’s motion to dismiss and granted plaintiff’s motion for certification of a nationwide class. Sherman v. Burwell, No. 3:15-cv-1468 (JAM) (D. Conn.). The case challenges the fact that, for the last several years, decisions at the earliest two levels of appeal in the Medicare administrative process (Redetermination and Reconsideration) have overwhelmingly resulted in upholding denials of coverage for home health care services. Indeed, the judge referred to the decisions in the original named plaintiff’s case (who was replaced by his wife when he died) as “unnerving.” This is especially true since over 60% are granted if people are able to continue to the third level of appeal, the Administrative Law Judge hearing

The court concluded that it had jurisdiction, rejecting several of the Secretary’s arguments. First, the judge held that the standards for waiver of exhaustion of administrative remedies had been met. This means that the plaintiff did not have to complete all levels of Medicare appeals before asking the court for relief. Second, despite the fact that the claim for coverage had ultimately been approved, he determined that the case was not moot because of the “relation-back doctrine” applicable to class actions when an individual plaintiff’s claim is transitory. He also rejected the Secretary’s argument that plaintiff had failed to state a claim for relief under the Constitution’s Due Process Clause.  He found plaintiff’s claim of a “secret policy” leading to the denial rate sufficiently plausible to allow the case to continue. This will allow the plaintiff class to obtain discovery responses relevant to that issue. (The judge did grant the motion to dismiss on plaintiff’s contention that the Medicare statute itself provided a right to meaningful review, but since the two arguments are essentially the same, this is not significant.)

On plaintiff’s class motion, the court held that the plaintiff satisfied the four factors under Federal Rule of Civil Procedure 23(a) and also Rule 23(b)(2). He thus certified a nationwide class of Medicare beneficiaries of home health care services who had received adverse decisions at the first two levels of appeal on their Part A or B claims and who had received an adverse initial determination on or after January 1, 2012. The next step in the case will be the Secretary’s response to the pending written discovery questions.

“We hope,” said Judith Stein, Executive Director of the Center for Medicare Advocacy, “that this case will eventually result in Medicare beneficiaries’ receiving fair and accurate appeal decisions, without having to present their case at a hearing.”

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