The USDC for the Southern District of Ohio has confirmed, yet again, that an action against Medicare cannot be commenced until all administrative remedies have been exhausted.  The underlying action resulted from an MVA where the plaintiff was a Medicare beneficiary.  After settlement of the action Medicare sought recovery of its conditional payments for plaintiff’s medical treatment, which were approximately $50,000.

Displeased with the reimbursement requested by Medicare, plaintiff moved the state court “to declare the amount of Medicare’s right to reimbursement, pursuant to 42 C.F.R. 411.37,” arguing that the state court had jurisdiction to determine the amount of reimbursement.  The Secretary of the Department of Health and Human Services submitted its opposition identifying the total expenses Medicare paid and the adjusted amount claimed after reduction for unrelated charges, legal fees and costs, pursuant to the applicable regulation) and the case was removed to Federal Court.  The plaintiff renewed her motion to have the court determine Medicare’s reimbursement and the Secretary moved to dismiss the action.

The court confirmed that it did not have jurisdiction over the dispute as the plaintiff had not exhausted her administrative remedies in opposition to the requested reimbursement.  In its decision the court identified the plethora of prior cases that make it unequivocal that such exhaustion is required before a court will have jurisdiction to review Medicare’s request for reimbursement.  The plaintiff cited to Bradley v. Sebelius, 621 F.3d 1330, 1340 (11th Cir. 2010), arguing that in this case the court identified the reimbursement to Medicare.  What was passed over was the fact that Bradley reached federal court only after the estate paid Medicare (under protest), perfected an administrative appeal and exhausted its administrative remedies.

It has even been held by the Supreme Court that all claims arising under Medicare must be channeled through the administrative appeals process, even if the claim is framed as a Constitutional challenge to Medicare’s statutes and regulations.  Shalala v. Ill. Council on Long Term Care, 529 U.S. 1, 120 S. Ct. 1084, 146 L. Ed. 2d 1 (2000).

42 U.S.C. §1395y(b)(2)(B)(v) grants Medicare broad discretion to adjust or even waive its request for reimbursement.  Accordingly, when a beneficiary is dissatisfied with the amount being demanded by Medicare, that beneficiary must pursue ALL administrative remedies and if the beneficiary is still dissatisfied with the final decision, only then they may seek judicial review.

At Franco Signor we are often asked by a client or defense counsel if filing suit in local or federal court is a better alternative than working through Medicare.  As identified by this case, valuable time and resources will be wasted if you go down this path.  Navigating the administrative process designated by Medicare does not have to be difficult.  We can help get you through that process in an efficient and effective manner.

 

Jeffrey P. Santoro, Esq.

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