Young v. Secretary of Health and Human Services
Memorandum Opinion. Signed by S. Allan Alexander on 2/3/12. (bnd)
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF MISSISSIPPI
MATTIE YOUNG AS ADMINISTRATRIX OF
THE ESTATE OF MATTIE SUE DELANEY
CIVIL ACTION NO. 4:11CV002-B-A
SECRETARY OF HEALTH AND HUMAN SERVICES
This case involves an application under 42 U.S.C. § 405(g) for judicial review of a final
decision of the Secretary of the Department of Health and Human Services. Because both
parties have consented to have a magistrate judge conduct all the proceedings in this case as
provided in 28 U.S.C. § 636(c), the undersigned has the authority to issue this opinion and the
accompanying final judgment.
I. FACTUAL AND PROCEDURAL HISTORY
As conservator of her mother’s estate, plaintiff filed a nursing home negligence suit
against Greenwood Health and Rehabilitation Center (“Nursing Home”) on August 30, 2004,
while her mother was still a resident of Nursing Home. Delaney v. Greenwood Health and
Rehabilitation Center, 4:04cv340, Docket 1, Ex. 2 (N.D. Miss.). The suit alleged that Nursing
Home’s negligent care resulted in a decubitus ulcer and the amputation of plaintiff’s mother’s
leg on August 24, 2002. On December 21, 2007, plaintiff settled the suit for $100,000.00 on the
third day of trial. Docket 6, p. 72-78.
Before she settled the case, plaintiff requested Medicare’s conditional payment in a letter
dated October 19, 2007. Id. at 60. Fourteen months later, after receiving no response from
Medicare, plaintiff again requested Medicare’s conditional payment amount on December 3,
2008. Id. at 59. Three months later, plaintiff received Medicare’s demand, which indicated
Medicare had paid $74,095.28 on behalf of plaintiff’s mother and had agreed to reduce the lien
amount to $26,004.67. Id. at 79-84. Plaintiff requested a redetermination of Medicare’s initial
lien figures on March 26, 2009, and advised Medicare that the nursing home litigation was not a
wrongful death case, but instead was only related to an amputation that occurred on August 24,
2002. Docket 6, p. 186-87. The request for redetermination indicated that the only related
services that should be the subject of Medicare’s lien were those of Dr. Payne, Dr. Bradshaw,
and Greenwood Leflore Hospital. Id. In support of her claim that the claimed lien amount
included charges for unrelated medical expenses, plaintiff forwarded to Medicare a document
summarizing the related payments that Medicare had made. Id. at 188. On May 26, 2009,
Medicare issued a Redetermination Decision acknowledging that unrelated charges had been
included in the initial lien amount; it agreed to reduce its lien, after the procurement costs were
calculated, to $11,128.16, plus $421.96 in interest. Docket 6, p. 165-66. On November 11,
2009, plaintiff again appealed Medicare’s decision and attached a 24-page summary of all
related and unrelated charges in support of her contention that the related charges totaled only
$12,142.61, for a final lien amount of $4,249.92 after procurement costs were calculated and
deducted. Id. at 159.
On January 4, 2010, Medicare faxed correspondence to plaintiff’s counsel requesting
support for her claim that charges unrelated to the settlement were included in the lien amount;
the request allowed plaintiff five business days to provide the requested records. Docket 6, p.
55. Eight business days later, on January 14, 2010, Medicare issued an unfavorable Appeal
Decision based upon the fact that “the documentation submitted was insufficient to substantiate
that there were any unrelated charges on the Medicare lien.” Id. at 162. Again, plaintiff
appealed the agency’s decision on February 4, 2010, and an Administrative Law Judge held a
hearing on the appeal on April 12, 2010. Id. at 47-48, 190-211. The ALJ issued an unfavorable
decision on May 6, 2010, and the Medicare Appeals Council similarly issued an unfavorable
decision on November 8, 2010, finding that plaintiff failed to establish by a preponderance of the
evidence that any unrelated charges had been included in the lien. Id. at 20-25, 3-8. The
plaintiff timely filed the instant appeal from the Secretary’s most recent decision, and it is now
ripe for review. On appeal to this court plaintiff continues to challenge the charges that were
included in the lien, as well as the attorney’s fees that were considered in calculating the
II. STANDARD OF REVIEW
Because Medicare benefits review cases and disability benefits review cases derive from
the same source, § 405(g), both are governed by the same legal standards. Estate of Morris v.
Shalala, 207 F.3d 744, 745 (5th Cir. 2000). This court’s review of the Secretary’s decision is
limited to an inquiry into whether there is substantial evidence to support the findings of the
Secretary, Richardson v. Perales, 402 U.S. 389, 401 (1971), and whether the correct legal
standards were applied. 42 U.S.C. § 405(g); Falco v. Shalala, 27 F.3d 160, 163 (5th Cir. 1994);
Villa v. Sullivan, 895 F.2d 1019, 1021 (5th Cir.1990). Substantial evidence has been defined as
“more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept
as adequate to support a conclusion.” Perales, 402 U.S. at 401 (quoting Consolidated Edison v.
NLRB, 305 U.S. 197, 229 (1938)). This court may not overturn the Secretary’s decision if it is
supported by substantial evidence, that is, “more than a mere scintilla,” and correctly applied the
law. Morris, 207 F.3d at 745; Anthony, 954 F.2d at 292.
Conflicts in the evidence are for the Secretary to decide, and if substantial evidence is
found to support the decision, the decision must be affirmed even if there is evidence on the
other side. Selders v. Sullivan, 914 F.2d 614, 617 (5th Cir. 1990). The court may not re-weigh
evidence, try the case de novo, or substitute its own judgment for that of the Secretary, even if it
finds that the evidence preponderates against the Secretary’s decision. Hollis v. Bowen, 837 F.2d
1378, 1383 (5th Cir. 1988); Bowling v. Shalala, 36 F.3d 431, 434 (5th Cir. 1994); Harrell, 862
F.2d at 475. If the Secretary’s decision is supported by the evidence, then it is conclusive and
must be upheld. Paul v. Shalala, 29 F.3d 208, 210 (5th Cir. 1994).
Substantial evidence is evidence that a reasonable mind would accept as adequate to
support the decision. Austin v. Shalala, 994 F.2d 1170, 1174 (5th Cir. 1993), citing Richardson v.
Perales, 402 U.S. 389, 401, 91 S.ct. 1420, 1427, 28 L.Ed.2d 842 (1971). Where substantial
evidence supports the administrative finding, the court may then only review whether the ALJ
applied the proper legal standards and conducted the proceedings in conformity with the
applicable statutes and regulations. Hernandez v. Heckler, 704 F.2d 857, 859 (5th Cir. 1983). Of
course, this standard of review is not a rubber stamp for the Secretary’s decision. It involves
more than a basic search for evidence supporting the findings of the Secretary. The court must
scrutinize the record and take into account whatever fairly detracts from the substantiality of
evidence supporting said findings. Austin v. Shalala, 994 F.2d at 1174, citing Tome v.Schweiker,
724 F.2d 711, 713 (8th Cir. 1984).
A. Whether the ALJ’s opinion was supported by substantial evidence.
After a hearing on this matter, it is clear that the parties are before the court because at
every step of this case, the Secretary failed to examine the real issues before it. Plaintiff’s
primary argument is that a number of charges for which Medicare seeks reimbursement are
wholly unrelated to the events during plaintiff’s mother’s stay at the Nursing Home that resulted
in amputation of her leg, and these charges therefore cannot be collected from the settlement
proceeds of a lawsuit that was for damages sustained as a result of that incident only. The
damages sustained were contained and discrete. Medical charges for later medical care for other
conditions were simply not the subject of the lawsuit which gave rise to the settlement proceeds.
In an attempt to demonstrate this point, plaintiff’s attorney prepared a list entitled
“Summary of Related and Unrelated Charges,” designating which medical charges on the
Medicare billing statement were related to the stay in Greenwood. Docket #6, p. 203. Plaintiff’s
counsel repeatedly advised Medicare that its lien included charges unrelated to the amputation of
the leg, such as treatment for cerebral vascular disease, hypertension, etc. – conditions from
which plaintiff’s mother suffered before she was ever admitted to the nursing home and were
clearly not due to any neglect that occurred at the nursing home. However, at no point during
the appeals process did the Secretary, the ALJ or the Appeals Council take the time to review the
Complaint or any documentation relating to the underlying civil case to discover that the civil
litigation was not a wrongful death case, but was a negligence claim concerning care that
resulted in plaintiff’s mother’s leg amputation. Instead, both the ALJ and the Medicare Appeals
Council took the position that the plaintiff bears the burden of providing evidence that
Medicare’s demand included unrelated expenses. In his opinion, the ALJ stated that because the
plaintiff failed to provide documentation to support her argument that unrelated expenses were
included in the demand, “the [plaintiff] has failed to carry [her] burden of proof by a
preponderance of the evidence.” Docket 6, p. 18.
Both the ALJ and Medicare Appeals Council have misstated the law. “Medicare bear[s]
the ultimate burden of justifying the amounts it seeks in reimbursement.” Urso v. Thompson,
309 F. Supp. 2d 253, 260 (D. Conn. 2004). The court explained that
recipients of Medicare benefits . . . are perhaps in a better position as an initial
matter to evaluate the reimbursement claim and to assess whether a payment
made by Medicare was truly for an item or service that was ultimately paid by the
primary plan. But even if a Medicare recipient had the initial burden of making a
prima facie case that Medicare’s reimbursement request were overinclusive, it is
the Secretary who should bear the ultimate burden of persuasion on this issue,
since it is the Secretary who is seeking reimbursement. A Medicare subscriber . .
. should not bear the burden of proving a negative.” Urso, 309 F. Supp. 2d at 260.
The Secretary erred at all levels of this matter. First, the Medicare Secondary Recovery
Contractor (MSRC) who believed that plaintiff’s mother’s medical records were necessary to
determine whether the included expenses were related1 could have obtained plaintiff’s records on
Had the MSRC simply reviewed plaintiff’s complaint, it would have discovered that suit
was filed years before plaintiff’s mother passed away and was not a wrongful death claim.
Further, the MSRC should have been able to tell that the claimed injuries related to the
amputation of the mother’s leg without additional records. The MSRC easily could have
eliminated the expenses for hypertension, cerebral vascular disease, etc if it had simply reviewed
its own, but chose not to do so. Instead, it relied upon plaintiff to provide them, and when she
either did not provide the records or was unable to do so, Medicare made no attempt to fulfill its
burden despite insistence that its claim was excessive. This was error. The MSRC should have
requested the medical records from the medical providers if it felt they were necessary to make a
proper determination as to the related expenses.2
Further down the line, both the ALJ and the Medicare Appeals Council could have
requested plaintiff’s mother’s medical records on their own if they believed the records were
critical to a correct determination. 42 C.F.R. § 405.1122(d), (e) and (f). And if the Medicare
Appeals Council did not wish to obtain the records on its own, it should have remanded the case
to the ALJ to obtain the additional evidence and issue a new decision. 42 C.F.R. § 405.1122(a)
and (b); 42 C.F.R. § 1126(a) and (b).
It is abundantly clear that the Secretary did not discharge her burden in this case.
Plaintiff provided the evidence she had and gave a good faith estimate from her documentation
that only one-fourth of Medicare’s claimed reimbursement related to expenses that had to do
with the claims pursued in the Complaint and recovered for in the civil case settlement. There
can be no doubt that expenses incurred for treatment of hypertension were not related to the
decubitus ulcer that plaintiff’s mother developed while in the Nursing Home and which led to
the amputation. Plaintiff’s mother had hypertension before she was admitted to the Nursing
Home and in the years following the amputation.
the Complaint. However, Medicare and the Secretary have failed at every level to examine the
case properly instead of just accepting the opinion of the former examiner.
This is an issue aside from the question of whether giving plaintiff only five business
days to provide copies of her medical records can in any sense be deemed reasonable.
When plaintiff advised Medicare that unrelated expenses were included in the conditional
payment demand and provided the documentation that she had to support her claim, the
Secretary was required to provide a justification for each payment that the Secretary believed
was related to the decubitus ulcer and resulting amputation. It is undisputed that the Secretary
never made such a showing, and the ALJ never required the Secretary to do so. The ALJ
followed the lead of the Secretary and every examiner of plaintiff’s claim at every level up to
that point and hung his hat on the fact that plaintiff had not provided medical records relating to
every medical expense the Secretary claimed was related.
The ALJ erred as a matter of law in placing the burden of proof on plaintiff. The ALJ’s
determination of the amount of reimbursement is not supported by substantial evidence in the
record. Either the ALJ or the Medicare Appeals Council should have examined the file more
closely to determine that many of the claimed expenses are obviously unrelated. If in fact the
medical records are necessary to make a determination as to the remaining claimed expenses, the
ALJ and the Medicare Appeals Council have the statutory authority to request them. The
undersigned holds that the decision of the Commissioner should be remanded for further
consideration of whether the claimed expenses are related. If the Secretary needs additional
evidence, it has the statutory authority to obtain such evidence via subpoena from the medical
providers; failing that, the lack of substantial evidence will continue to be a fatal flaw in this
After a review of the evidence presented in the briefs and during the hearing, this court is
of the opinion that the ALJ’s opinion was not supported by substantial evidence and must be
remanded. The Secretary failed to meet its burden of proof. A separate judgment in accordance
with this Memorandum Opinion will issue this date.
SO ORDERED, this, the 3rd day of February, 2012.
/s/ S. Allan Alexander
UNITED STATES MAGISTRATE JUDGE
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