No. 09-cv-134-TUC-DCB (D.Ariz.), filed March 10, 2009. Appeal filed June 30, 2011 (No. 11-16606, 9th Cir.).
Issue: Whether the Secretary's aggressive methods for attempting to collect payments under his Medicare Secondary Payer (MSP) program, directed at beneficiaries and their attorneys, violates the Medicare statute and the Due Process Clause.
Relief sought: Declaratory and injunctive relief prohibiting defendant's MSP recovery practices, including termination of Social Security benefits before there has been resolution of an administrative appeal of the MSP claim or waiver of recovery request, and requiring attorneys to withhold liability proceeds from their clients.
Updated: October 13, 2016
Status: The court denied defendant's motion to dismiss, holding that the plaintiffs had standing and that exhaustion should be waived. 2009 WL 4497456 (D.Ariz., Nov. 30, 2009). Defendant then agreed to plaintiffs' amending the complaint again to add an additional plaintiff.
On April 12, 2010, the court granted plaintiffs' motion to compel discovery and denied the Secretary's motion to limit judicial review to the administrative record. 2010 WL 1452932. Both parties then engaged in discovery. Plaintiffs' motion for certification of a nationwide class has been fully briefed. Briefing on the cross-motions for summary judgment was completed in December 2010.
On May 9, 2011, the district court certified the nationwide class of Medicare beneficiaries and granted summary judgment to plaintiffs while denying the Secretary's motion for summary judgment. 789 F. Supp. 2d 1179. The court held that the Secretary’s implementation of the MSP program violated the Medicare statute, but did not reach the due process claims. The Secretary changed some of the offending language in response to the order, but, on June 30, 2011, the Secretary filed her notice of appeal. The appeal was fully briefed during the fall of 2011, and the appeal was argued on December 5, 2013. Because the government raised the jurisdictional issue of "presentment" for the first time in its reply brief, the court ordered supplemental briefing, which was completed on February 20, 2013.
On September 4, 2013, the Court of Appeals reversed. 729 F.3d 993. Although it held that the beneficiaries had standing and that their claims were not moot, it determined that they had "not adequately presented" their claims to the Secretary in the administrative process and therefore the district court lacked jurisdiction under 42 U.S.C. §405(g). Two of the beneficiaries had not specified in the administrative process that they were challenging the Secretary’s policy under the MSP. While the third had stated her objection to the policy and why it was illegal, she had not followed through with that contention and therefore she too was determined not to have adequately presented. The court did hold that the district court had jurisdiction over the claims of the attorney-plaintiff, but it held that the Secretary's policy towards attorneys was a reasonable interpretation of the statute and reversed that part of the decision on the merits. The court vacated both injunctions.
Plaintiffs filed a petition for rehearing or rehearing en banc directed primarily at the court’s presentment analysis. On January 2, 2014, after the Secretary filed her response, the court issued an order and amended opinion changing some aspects of the decision, but with the same result. 747 F.3d 1099.
After remand to the district court, the parties entered into settlement discussions. On November 18, 2015, the court signed on to the settlement reached by the parties, which provided for a number of improvements in the MSP program, especially in the transparency of its communications with beneficiaries. In accordance with the settlement, the complaint was dismissed, but the settlement bound only the named plaintiffs, not the class members. Plaintiffs’ counsel continue to monitor the MSP program to insure that the terms of the settlement are carried out.