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No. 06-1607 (D.D.C.), filed September 15, 2006, appeal filed May 21, 2009 (No. 09-5191, D.C.Cir.)

Last Update: October 22, 2010

Issue: Whether the Secretary's refusal to inform 230,000 Part D-enrolled beneficiaries, who mistakenly were sent money reflecting the amount of their monthly premiums, of their right to request waiver of recovery, while demanding repayment by September 30, 2006, violated the Medicare statute and the Due Process Clause.

Relief sought: Declaratory relief, and temporary and permanent injunctive relief requiring the Secretary to notify the affected beneficiaries of their right to seek waiver of recovery.

Status: After the complaint was filed along with a motion for a temporary restraining order and preliminary injunction, the Secretary agreed not to send any more demand letters to the beneficiaries and to remove postings about this issue from its website.  After expedited briefing and an oral argument, the district judge denied the Secretary's motion to dismiss and issued a preliminary injunction on September 29 requiring (1) the Secretary to send out a notice to all 230,000 beneficiaries of their right to request waiver and how to do it; (2) to stop accepting repayments of the mistaken payments until the right to waiver had been offered; and (3) to refund those amounts already paid back.  The Secretary appealed and sought a stay of the preliminary injunction order, which was granted by the Court of Appeals on October 4, 2006.

In the meantime, earlier on October 4, the district judge issued a decision explaining the basis for his order of the previous week.  456 F.Supp.2d 11 (D.D.C. 2006).

On April 17, 2007, the Court of Appeals, acting in response to supplemental briefing that it had ordered after the oral argument, held that plaintiffs had not met the so-called "presentment" requirement and that therefore the district court lacked jurisdiction to consider the beneficiaries' contentions.  It vacated the preliminary injunction order.  483 F.3d 852 (D.C.Cir. 2007).

The beneficiaries then took steps to satisfy presentment.  When the district court's stay order was lifted in late August 2007, they moved to file an amended and supplemental complaintThe Secretary opposed the motion on the ground that filing the amended complaint would be futile because it would ultimately be dismissed for failure to state a claim.  The district court, however, granted plaintiffs' motion on November 13, 2007, thus implicitly rejecting the Secretary's contention that the complaint would ultimately be dismissed.


The defendants moved to dismiss and the plaintiffs cross-moved for summary judgment, with briefing completed in January 2008.  On March 23, 2009, the district court granted the defendants' motion to dismiss and denied plaintiffs' motion.  Action Alliance v. Johnson, 607 F. Supp. 2d 33 (D.D.C. 2009).  The court reiterated its previous holding that the plaintiff organizations had standing and held that they had a right to proceed under 42 U.S.C. §405(g).  On the merits, though, it concluded that the Social Security waiver provision, 42 U.S.C. §404(b), did not apply in this situation because the erroneous payments were made pursuant to the Medicare statute rather than the Social Security statute.

The Court of Appeals affirmed on June 18, 2010. 607 F.3d 860 (D.C.Cir. 2010). The Court agreed with the district court that §404(b) only applied to Social Security benefits, thus implicitly accepting that the payments at issue were not Social Security benefits. The Court rejected any suggestion that the fact of the Social Security Administration's participation in making the overpayments implicated the waiver provision, and accepted the government's contention that it would be illogical to impose a waiver requirement in this circumstance but not in the circumstance where the beneficiary does not pay the premium via withholding by the Social Security Administration. Plaintiffs' request for rehearing or rehearing en banc was denied on August 13, 2010.





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