Medicare home health services are available for individuals who are “confined to the home.” Medicare pays for these services through contractors known as “Medicare Administrative Contractors” (MACs). A group of individuals filed suit against the Secretary of Health and Human Services alleging the Secretary does not follow its own agency regulations governing appeals of Medicare home health services, which has resulted in improper denial of plaintiffs’ benefits. Although administrative law judges found the plaintiffs to be homebound, the contractors repeatedly denied subsequent claims for services, which plaintiffs contend is in violation of Medicare regulations. The Secretary filed this Motion to Dismiss, which was denied.
The district court held the plaintiffs, who are eligible for both Medicare and Medicaid, have standing to sue even though, as the Secretary asserted, Medicaid would likely pay their claims if they were to be denied Medicare coverage. Plaintiffs are seeking a right to Medicare coverage, and an improper denial of benefits could impose personal liability for uncovered services. Moreover, should Medicaid be forced to pay, one of the plaintiffs would be exposed to estate recovery. In addition, there are differences in the home health services provided between Medicare and Medicaid. Plaintiffs have shown a concrete injury sufficient to support standing. As for jurisdiction, although the court agreed with the Secretary that it does not have mandamus or federal question jurisdiction, the matter is properly before the court under the appeals provision of the Social Security Act found in §405(g). Lastly, the court disagreed with the Secretary’s contention that plaintiffs cannot file a claim for failure to follow interpretive rules related to MACs that do not bind the agency. The court said that it is long settled that rules promulgated by an agency that affect the rights of others are binding on the agency. The regulations governing MACs and Medicare appeals are couched in mandatory language, which, according to the court, shows the agency’s intent to be bound by these regulations.
Ryan v. Burwell, 2015 WL 4545806 (D. Vt. July 27, 2015)