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  • Barrows v. Burwell (formerly Bagnall v. Sebelius) (Observation Status) No. 3:11-cv-01703 (D. Conn., filed 11/3/2011). In November 2011, the Center for Medicare Advocacy and Justice in Aging filed a class action lawsuit on behalf of individuals who have been denied Medicare Part A coverage of hospital and nursing home stays because their care in the hospital was considered "outpatient observation" rather than an inpatient admission. When hospital patients are placed on observation status, they are labeled "outpatients," even though they are often on a regular hospital floor for many days, receiving the same care as inpatients.  Because patients must be hospitalized as inpatients for three consecutive days to receive Medicare Part A coverage of post-hospital nursing home care, people on observation status do not have nursing home coverage.  They must either privately pay the high cost of nursing care or forgo that skilled care.  The number of people placed on observation status has greatly increased in recent years.

As previously reported, on September 23, 2013, a federal judge in Connecticut granted the government’s motion to dismiss the lawsuit.  Plaintiffs appealed, but limited the appeal to the issue of the right to an effective notice and review procedure for beneficiaries placed on observation status. 

On January 22, 2015, a three-judge panel of the U.S. Court of Appeals for the Second Circuit decided that Medicare patients who are placed on “Observation Status” in hospitals may have an interest, protected by the Constitution, in challenging that classification.  The panel held that the district court erred when it dismissed the plaintiffs’ due process claims, and it sent the case back to that court for further proceedings.  Barrows v. Burwell, 777 F.3d 106 (2d Cir. 2015).

Update: The parties are now completing discovery on the question of whether plaintiffs have a “protected property interest” in Part A coverage of their hospital stays, such that they would have due process rights. Plaintiffs have received voluminous documentation from the government and conducted depositions of witnesses from the Department of Health and Human Services, Medicare contractors, and some of the hospitals that treated the named plaintiffs. The law firm of Wilson Sonsini Goodrich & Rosati, which has helped the Center in previous litigation, is providing pro bono assistance with the discovery process. Summary judgment briefing will commence soon, with the government’s opening brief due April 14, 2016.

On August 26, 2014, the Center filed a nationwide class action lawsuit in United States District Court in Connecticut: Lessler v. Burwell, No. 3:14-cv-1230 (D. Conn.). The named plaintiffs, from Connecticut, New York and Ohio, all waited longer than the statutory 90-day limit for a decision on their Medicare appeals. The complaint is available here:

On January 29, 2015, defendant’s motion to dismiss was denied.  On June 10, 2015, the court granted the plaintiffs’ motion for certification of nationwide class of Medicare beneficiaries who have been or will be waiting more than 90 days for a decision on their timely-filed request for an ALJ hearing.  The parties also conducted discovery.

Update: In March 2016 the court preliminarily approved a settlement.  The proposed settlement addresses delays that Medicare beneficiaries have been experiencing at the ALJ level of review. Among other things, the settlement calls for the Office of Medicare Hearings and Appeals (OMHA) to continue its policy of providing all beneficiary appellants with priority over other appellants in receiving ALJ decisions, to designate a Headquarters Division Director to oversee inquiries about appeals initiated by beneficiary appellants and to address any complaints or questions concerning the processing of those appeals. OMHA will also establish a toll-free help line for beneficiary appellants to be answered by the Division Director’s staff. OMHA will introduce a new, more user-friendly ALJ hearing request form that allows beneficiaries to self-identify, and will also publish data about the length of processing time for beneficiary appeals.  A fairness hearing will be held on May 31, 2016. A link to the class notice is below; we invite you to distribute information about the settlement and fairness hearing to beneficiaries and their advocates.

Update: On March 1, 2016, the Center and it co-counsel, Vermont Legal Aid, filed a Motion for Resolution of Non-Compliance with the Settlement Agreement.  The filing comes after three years of urging the Centers for Medicare & Medicaid Services (CMS) to fulfill its obligation to end continued application of an “Improvement Standard” by Medicare providers, contractors and adjudicators to deny Medicare coverage for skilled maintenance nursing and therapy.

If truly implemented and enforced, the settlement should improve access to skilled maintenance nursing and therapy for thousands of older adults and people with disabilities whose Medicare coverage for skilled care is denied or terminated because their conditions are “chronic,” “not improving,” “plateaued,” or “stable.” Unfortunately, providers and contractors continue to illegally deny Medicare coverage and care based on an “Improvement Standard,” resulting in beneficiaries nationwide failing to obtain needed skilled nursing and therapy coverage. This continued loss of skilled care based on an improvement requirement is occurring despite the assertion by CMS that it has completed the education campaign required by the Settlement. That campaign, however, has clearly failed to educate key components of the provider community and Medicare decision-making system.

  • For more information, see the Center’s website at:
  • Hull v. Sebelius, No. 3:14-cv-801 (D. Conn.) (Lower level Medicare appeals) On June 4, 2014, the Center filed a complaint in United States District Court in Connecticut against Kathleen Sebelius, Secretary of Health and Human Services (at that time), on behalf of plaintiffs who have been denied a meaningful review of their Medicare claims at the first two levels of appeal. The case was brought as a class action on behalf of Connecticut Medicare beneficiaries seeking home health care coverage, and the four named plaintiffs represent the thousands of beneficiaries who cannot get a meaningful review of their cases. Instead, Medicare beneficiaries receive almost automatic denials of coverage, which is essentially “rubber stamped” at both the Redetermination and Reconsideration levels. The problem persists throughout the country.

On December 8, 2014, the court granted the government’s motion to dismiss on the grounds that the named plaintiffs, who are dual-eligibles, lack standing because they received coverage of the services at issue from Medicaid.  Plaintiffs filed a motion for reconsideration. On July 6, 2015, the court reconsidered its order but adhered to its decision that the plaintiffs lack standing.  In its reconsideration, the court noted that the Supreme Court has granted certiorari in a case that may shed light on the standing issue at dispute. See Spokeo, Inc. v. Robins, 135 S. Ct. 1892 (2015) (granting cert on the following question presented: Whether Congress may confer Article III standing upon a plaintiff who suffers no concrete harm, and who therefore could not otherwise invoke the jurisdiction of a federal court, by authorizing a private right of action based on a bare violation of a federal statute.).

Plaintiffs appealed the case to the Second Circuit on September 17, 2015 (Case No. 15-2949), and at plaintiffs’ request the court agreed to hold the appeal in abeyance pending the outcome of Spokeo at the Supreme Court. Spokeo was argued on November 2, 2015.

  • For more information, see the Center’s press release “Lawsuit Challenges Unjust and Inefficient Medicare Appeals Process” (June 5, 2014), available at:
  • Sherman v. Burwell (formerly Olsen-Ecker v. Burwell), No. 3:15-cv-1468 (D. Conn.) (Lower level Medicare appeals) On October 9, 2015, the Center filed a complaint in United States District Court in Connecticut against Sylvia Mathews Burwell, Secretary of Health and Human Services, on behalf of plaintiffs who have been denied a meaningful review of their Medicare claims at the first two levels of appeal. The case was brought as a class action on behalf of Medicare beneficiaries seeking home health care coverage, and the named plaintiff, like the plaintiffs in Hull, represents beneficiaries who cannot get a meaningful review of their cases. However in this “rubber stamp” case, the plaintiff was not eligible for Medicaid and thus was personally financially liable for the Medicare services under appeal.  The plaintiff filed a motion for class certification on October 23, 2015, and the government filed a motion to dismiss on January 13, 2016.

Update: Written discovery was served on the government but the court stayed discovery while the motion to dismiss is still pending. Oral argument was held on the government’s motion to dismiss and the plaintiff’s motion for class certification on February 29, 2016. During the hearing the judge indicated that he was likely to reject the government’s motion to dismiss, however he also found plaintiff’s claim for “commonality” among class members problematic, which may spell difficulty for the class certification motion. The judge took the matters under advisement and stated that he will try to issue a written decision soon.

The Center is interested in hearing about similar problems that beneficiaries are encountering with respect to “rubber stamp” denials of home health or SNF coverage at the first two levels of appeal.  Advocates and beneficiaries are encouraged to contact Ali Bers at

  • Ryan v. Burwell, No. 5:14-cv-269 (D. Vt.) (Prior Favorable Homebound Determination) On December 19, 2014, the Center for Medicare Advocacy and Vermont Legal Aid filed a class action lawsuit against Sylvia Mathews Burwell, the Secretary of Health and Human Services, to stop Medicare’s practice of repeatedly denying coverage for home health services for beneficiaries on the basis that they are allegedly not homebound, when Medicare has previously determined them to be homebound. (Ryan v. Burwell). The lawsuit was filed in the United States District Court in Burlington, Vermont on behalf of two Vermont residents, Marcy Ryan and John Herbert, as a regional class action lawsuit covering New England and New York.

On March 25, 2015, the government filed a motion to dismiss on the grounds that plaintiffs lack standing, that the court lacks subject matter jurisdiction, and that plaintiffs have failed to state claim on which relief may be granted.  On July 27, 2015, the court denied the government’s motion to dismiss, finding four separate grounds on which the dually eligible plaintiffs have standing. (Compare Hull, above, in which the court rejected similar standing arguments.) The court also found that it had subject matter jurisdiction and that plaintiffs had stated a claim on which relief could be granted.

Oral argument on the plaintiffs’ motion for certification of a regional class took place in Rutland, Vermont on September 21, 2015.  Judge Crawford requested additional briefing on whether certain beneficiaries should be included in the class, and whether the class should be “closed,” meaning time-limited to the point where the agency removed a Manual provision which is at issue in the case.

Update: On December 2, 2015, the court granted plaintiffs’ motion for class certification and, at request of the plaintiffs, issued clarification on the class definition on February 23, 2016.  The regional class is defined as all beneficiaries of Medicare Part A or B in Connecticut, Maine, Massachusetts, New Hampshire, New York, Rhode Island, and Vermont (Medicare Administrative Contractor Jurisdiction K): (a) who have received a “favorable final appellate decision” that he or she was “confined to the home,” i.e. homebound, in the appeal of a home health nursing or therapy claim denial; (b) who have subsequently been denied, or will be denied, coverage for additional service on the basis of not being homebound, on or after January 1, 2010; (c) who had a non-lapsed, viable appeal of the subsequent denial for coverage of additional home health services as of March 5, 2015, or had a particularized individual basis for tolling of any applicable appeal deadline; and (d) for whom the claim for Medicare home health coverage was filed on or before August 2, 2015.

Written discovery has been served.

  • For more information, including a copy of the complaint, see:
  • Lodge v. Burwell, No. 3:15-cv-390 (D. Conn., filed 3/17/2015) (Medically necessary oral health care). This appeal filed in federal court, District of Connecticut, presents an opportunity for the court to review whether surgical treatment to a Medicare beneficiary’s teeth damaged by radiation therapy to the head and neck was 1) properly characterized by an Administrative Law Judge as a covered physician service medically reasonable and necessary as a part of an overall plan of care for cancer or 2) improperly characterized by the government contractor as excluded dental services.  These competing interpretations depend upon how the specific treatment is characterized. The plaintiff amended the complaint on June 30, 2015 to add a claim under the Administrative Procedure Act (APA), stating that in 1974 the agency removed the word “routine” from the description of excluded dental services without following proper notice-and-comment procedure. Plaintiff requests that the court therefore read the relevant regulation as if the word “routine” had never been removed, which would allow for coverage of his extraordinary, non-routine oral health care.

The government filed a partial motion to dismiss on October 22, 2015. The motion sought to dismiss the APA claim as barred by the statute of limitations.  Plaintiff’s opposition to the motion to dismiss was filed November 30, 2015. Plaintiff argued that the applicable statute of limitations is not the six-year period measured from final agency action (in this case, 1974), which would be applied to APA claims in the absence of another specified timeframe, but instead is found in 42 U.S.C. §405(g). Section 405(g) is the general review provision for individual Medicare claims which provides 60 days to appeal to federal court counting from a final decision by the Secretary of Health and Human Services (in this case, an adverse decision by the Medicare Appeals Council). The parties also conducted limited written discovery.

Update: The government requested and was allowed to withdraw its partial motion to dismiss on February 10, 2016.  The parties are scheduled to file cross motions for summary judgment on March 22, 2016.

  • Bremby v. Burwell, No. 3:15-cv-1397 (D. Conn.) (per se skilled services). This case was filed on September 22, 2015, in the U.S. District Court for the District of Connecticut.  It challenges the denial of Medicare home health coverage for a beneficiary who required monthly Vitamin B-12 intramuscular injections.  Intramuscular injections are, by regulation, a per se skilled service, and the beneficiary in this case has a condition (Total Gastrectomy) for which Medicare policy expressly recognizes B-12 injections to be a medically necessary treatment.  The Center is interested in hearing about similar problems that others are encountering with respect to denials of home health or SNF coverage for per se skilled services listed at 42 C.F.R. 409.33(b).  Advocates and beneficiaries are encouraged to contact Wey-Wey Kwok at

Other examples of health care services that are defined by Medicare as skilled in either a Skilled Nursing Facility or for Home Health care include:

(1) Intravenous or intramuscular injections and intravenous feeding.

(2) Enteral feeding that comprises at least 26 per cent of daily calorie requirements and provides at least 501 milliliters of fluid per day.

(3) Nasopharyngeal and tracheostomy aspiration;

(4) Insertion and sterile irrigation and replacement of suprapubic catheters;

(5) Application of dressings involving prescription medications and aseptic techniques;

(6) Treatment of extensive decubitus ulcers or other widespread skin disorder;

(7) Heat treatments which have been specifically ordered by a physician as part of active treatment and which require observation by nurses to adequately evaluate the patient's progress;

(8) Initial phases of a regimen involving administration of medical gases;

(9) Rehabilitation nursing procedures, including the related teaching and adaptive aspects of nursing, that are part of active treatment, e.g., the institution and supervision of bowel and bladder training programs.

On December 28, 2015, the government filed a motion to remand the case to the Medicare Appeals Council.

Update: Plaintiff filed a brief in opposition to remand to the Medicare Appeals Council on January 19, 2016. No reply brief was filed and the parties await a decision from the court. Written discovery has been served.


Medicare Outpatient Therapy Caps

Therapy Caps and Exceptions Process – Overview

The Balanced Budget Act (BBA) of 1997 imposed a payment cap on the annual amount of Medicare coverage available for beneficiaries receiving outpatient therapy services. Two distinct caps were placed on therapy services: for physical therapy (PT) and speech language pathology service (ST) combined, the cap is $1,960 in 2016.  For occupational therapy (OT) services, the cap is also $1,960. The therapy cap applies to all Part B outpatient therapy settings and providers, including private practices, skilled nursing facilities, home health agencies, outpatient rehabilitation facilities, comprehensive outpatient rehabilitation facilities, and hospital outpatient departments.

Although absolute Medicare payment caps were set to go into effect in 1999, since that time Congress has acted approximately ten times to prevent the implementation of the therapy caps either through a moratoria or by establishing an "Exceptions" process.   The Exceptions process, created through the Deficit Reduction Act (DRA) of 2005, allows individuals and providers to seek Medicare coverage of therapy services above the cap.  Automatic Exceptions are available when therapists attest that ongoing therapy services are reasonable and necessary and must be justified by supporting documentation in the beneficiary's medical record. However, starting in 2012, claims exceeding a threshold of $3,700 (either for PT and ST combined, or separately for OT) are subject to a mandatory manual medical review by Medicare contractors.

In April 2015, Congress passed and the President signed into law the Medicare and CHIP Reauthorization Act (MACRA) – which repeals and replaces the flawed Medicare physician reimbursement system known as the sustainable growth rate or SGR.  Rather than repealing the annual Medicare payment caps for outpatient therapy, MACRA keeps the caps in place. It merely extends the Medicare therapy cap “exceptions” process by another two years (through 2017) and makes revisions to the manual review process.  The therapy caps are one of the biggest barriers to medically necessary care faced by individuals with chronic conditions, and since many providers are reluctant to use the exceptions process, individuals who could benefit from ongoing therapy go without.

  • For more information about MACRA, see the Center’s Weekly Alert (April 16, 2015):

Current Policy is a Barrier to Care

According to many advocates and providers, the therapy caps serve as a significant barrier to accessing necessary therapy services for individuals with long-term, chronic conditions who require ongoing therapy services.  Set at arbitrary dollar amounts, these caps are aimed at federal cost-savings rather than ensuring Medicare coverage of clinically appropriate services.  The Exceptions process is the only means for an individual to obtain needed therapy services that exceed the annual cap.  Although the existence of the Exceptions process is better than an absolute cap with no means to seek additional coverage, the current manual review process, triggered when someone reaches the $3,700 cap, serves as a de facto absolute cap for many beneficiaries.  Since the process requires significant and burdensome involvement on the part of providers, it is the experience of beneficiary advocates that the manual review deters many providers from processing Exceptions, thus limiting beneficiary access to needed therapy services.  As a result, many beneficiaries who need ongoing therapy go without therapy services altogether.

Therapy Cap Replacement Proposal  

Some proponents of repealing the therapy caps have offered an alternative, “replacement” policy applicable to outpatient therapy services which the Congressional Budget Office (CBO) estimates would cost roughly half as much as fully repealing the caps. 

In place of the caps, the replacement proposal would extend the current $3,700 threshold for approximately one year until a new prior authorization process is established.  Prior authorization would apply to providers and services identified through “factors” established by the Secretary. These factors would include newly enrolled providers, providers with high claims denial rates or aberrant billing patterns, and services “furnished to treat a type of medical condition.”  Medicare contractors would make a prior authorization determination within 10 business days of receipt of the necessary medical documentation or be deemed to have found the services to meet the applicable requirements for Medicare coverage.  Contractors would end the application of prior authorization medical review if the provider has a low denial rate under prior authorization.

As attorneys for the national class in Jimmo v. Sebelius (discussed above), we are particularly concerned about the proposal to replace the therapy caps. We strongly support a repeal. But this proposal replaces the cap with a prior authorization – a gatekeeper system that could limit access for patients, particularly those in need of on-going therapy. 

  • For the most recent Therapy Cap replacement bill language, see Senator Cardin’s Senate Amendment 3361 to the bill S. 524, Congressional Record, March 1, 2016, 114th Congress, 2nd Session, Issue: Vol. 162, No. 33 — Daily Edition, pp. S1144-1146, available at:

      Comments Submitted to Senate Finance Committee Request re: High Drug Costs

In December 2015, the United States Senate Committee on Finance published a report entitled “The Price of Sovaldi and its Impact on the Health Care System.”  While the Senate Finance Committee’s report is focused on one pharmaceutical company, it underscores the need for Congress to adopt policy that lowers the cost of prescription drugs across the board.

On January 21, 2016, Senators Wyden and Grassley issued a letter to the health care and patient community seeking feedback on potential avenues for legislative reform. On March 4th, 2016, in response to this letter, the Center submitted comments to the Senate Finance Committee. Asking Congress to view the rising cost of prescription drugs from the perspectives of older adults and people with disabilities, the Center addressed two of the questions posed by the Senate Finance Committee: (1) What role does the concept of “value” play in this debate, and how should an innovative therapy’s value be represented in its price? And (2) What tools exists, or should exist, to address the impact of high cost drugs and corresponding access restrictions, particularly on low-income populations and state Medicaid programs?


Proposed Rule re: Prior Authorization in Home Health Benefit

On February 5, 2016, the Centers for Medicare & Medicaid Services (CMS) published a two-page Paperwork Reduction Act notice in the Federal Register announcing their effort to seek approval from the Office of Management and Budget (OMB) to “collect information” relating to a demonstration project.  Pursuant to the project, CMS would identify, investigate and prosecute fraud among Medicare home health agencies by performing prior authorization before processing claims for home health services in several states. On the same day, CMS published a Supporting Statement on their website, further describing the demonstration.

Targeting “high risk fraud states”, the three year demonstration would occur in two phases: Phase I in Florida, Texas and Illinois and Phase II in Michigan and Massachusetts.  CMS notes that it would establish a prior authorization procedure that is similar to the Prior Authorization of Power Mobility Device (PMD) Demonstration, which was implemented in 2012. The demonstration, according to CMS, would also follow and adopt prior authorization processes that currently exist in other health care programs such as TRICARE, certain state Medicaid programs, and in private insurance.

To initiate the prior approval process in the affected states, CMS explains that the home health agency “or the beneficiary submits a prior authorization request with all relevant documentation based on applicable Medicare rules and policy requirements, to a contractor.” After review, the contractor “will communicate a decision that provisionally affirms or non-affirms the request for prior approval.”  If the documentation is complete “but all relevant Medicare coverage requirements are not met” the contractor will advise that Medicare will not pay for the treatment, and any claim submitted will be denied (subject to appeal).  If a home health agency provides care without prior authorization, and the claim is determined to be payable, the agency will be penalized with a 25% payment reduction.

In an overreaching anti-fraud effort that appears anything but targeted, if implemented, this demonstration would undoubtedly negatively impact access to the home health benefit for many Medicare beneficiaries who live in the affected states.   Requiring prior approval for every prospective home health recipient in a state for the provision of critically important services that help keep people in their homes rather than institutions, often when they are at their most medically vulnerable, will effectively delay and deny home health coverage for countless Medicare beneficiaries. 

The Center intends to submit comments raising serious concerns about this proposal. We encourage those who can, to do the same.  Comments are due April 5, 2016.

     Comments on CMS’ Draft Call Letter

Every year, the Centers for Medicare and Medicaid Services (CMS) releases a draft of payment, performance and other rules that will apply to Medicare Advantage (MA) and Part D plans that choose to participate in the Medicare program in the following calendar year. Commonly referred to as the “Call Letter,” this document is first released in draft form, subject to public comment, and is finalized a few months later, usually in April. The 2017 Draft Call Letter was released on February 19, 2016 (see: 

The Center, in collaboration with several other advocacy organizations, submitted comments to the Call Letter. There are proposals that we support, and hope are finalized, and others about which we have concerns. Here is quick overview of some of these provisions:

  • We have significant reservations about the methodology that CMS is proposing for adjusting Star Ratings for Medicare Advantage and Part D plans based on socioeconomic and disability status. We are concerned that despite the stated objective of ensuring that the Star Ratings accurately reflect quality, the proposed methodology might mask true differences in quality for these populations.      
  • On the one hand, we strongly support CMS’ proposal to enhance oversight of MA plan provider directories, including proposed data elements to be reported by plans.  On the other hand, we urge CMS to do much more concerning the broader issue of MA enrollee access to providers, including how network adequacy is defined and monitored, particularly in light of a recent General Accounting Office (GAO) report that highlights regulatory shortcomings in this area.  GAO recommends, among other things, that CMS    “augment oversight of MA networks to address provider availability, verify provider information submitted by MAOs, conduct more periodic reviews of MAO network information, and set minimum information requirements for MAO enrollee notification letters.”  Further, we are very disappointed that CMS has taken no further action to strengthen consumer protections surrounding MA plan mid-year provider network terminations.
  • We applaud CMS for including strong, clear language reminding MA plans about their obligations to prevent illegal balance billing of Qualified Medicare Beneficiaries (QMBs) and dual eligible plan members. 
  • Among the Part D-related proposals, we urge caution in testing whether plan coverage determination timelines should be extended to improve clinical decision-making, particularly given that elsewhere in the draft Call Letter, CMS reports that the volume of cases auto-forwarded to the Independent Review Entity (IRE) by plan sponsors that have failed to process certain appeals in a timely manner “has been significant and sustained over the past several years.” In addition, we support CMS’ proposal to increase the specialty tier threshold for the first time since 2008.  

The Center’s full comments can be found at

Administration on Community Living Grant – For Medicare Beneficiaries Under age 65

Pursuant to a grant from the U.S. Department of Health and Human Services, Administration for Community Living, the Center for Medicare Advocacy is undertaking an innovative, model project to assist State Health Insurance Assistance Programs (SHIPs) and Senior Medicare Patrol Programs (SMPs) to reach and serve Medicare Beneficiaries under 65 years old.

While people under 65 with disabilities comprise only 8.4% of the general U.S. population, that percentage is nearly doubled among Medicare recipients. Regrettably, those with disabilities often have lower incomes, require more health care, and find it more difficult to pay for and obtain care compared to Medicare beneficiaries over 65 years of age. They are more likely to have cognitive impairments, report themselves in poor health, and are more likely to have limitations in one or more activities of daily living. To help SHIPs and SMPs learn about the particular needs of Medicare’s younger beneficiaries and to increase the resources available for SHIPs and SMPs to communicate with and support Medicare beneficiaries under 65, the Center will work with strong partner organizations including Justice in Aging, the American Association of People with Disabilities, the Gleason Initiative Foundation, and the Christopher and Dana Reeve Foundation, CHOICES (Connecticut’s SHIP/SMP), and the Social Security Administration. The 17-month project has national reach but will test different approaches in Connecticut, California, and Louisiana.

For more information, see:

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