Warren Albert, D.C. et al v. Sebelius et al

Filing 34

MEMORANDUM & ORDER: The Defendant's motion 18 for judgment on the pleadings is DENIED and Plaintiff's motion 20 for judgment on the pleadings is GRANTED. The Court reverses the decision of the Council and remands for further proceedings consistent with this opinion pursuant to the fourthsentence of 42 U.S.C. § 405(g). On remand, the Council shall reconsider whether Dr. Alberts services were reimbursable in light of a correct interpretation of the relevant documentation guideli nes. For guidance on remand, the Council shall not deny Dr. Alberts claims solely for failure to submit an eight-element medical history, but rather shall considerwhether the medical history he did submit, when taken in totality with his other treatm ent notes, demonstrates that the patient ha[s] a significant health problem in the form of a neuro-musculoskeletal condition necessitating treatment and that the manipulative services rendered... have a direct therapeutic relationship to the patients condition and provide reasonable expectation of recovery or improvement of function. Ordered by Judge Frederic Block on 7/28/2015. (Innelli, Michael)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
--------------------------------------------------x
WARREN ALBERT, D.C., and
NY CHIROPRACTIC CARE, P.C.,
Plaintiffs,
-against-

MEMORANDUM AND ORDER
13-CV-4542 (FB) (RML)

SYLVIA BURWELL, in her official
capacity as Secretary of the United States
Department of Health and Human Services,
and the UNITED STATES
DEPARTMENT OF HEALTH AND
HUMAN SERVICES,
Defendants.
--------------------------------------------------x

Appearances:
For the Plaintiffs:
JASON HSI
ROY W. BREITENBACH
Garfunkel Wild P.C.
111 Great Neck Road, Suite 503
Great Neck, NY 11021

For the Defendants:
KATHLEEN ANNE MAHONEY
United States Attorneys Office
Eastern District of New York
271 Cadman Plaza East
Brooklyn, NY 11201

BLOCK, Senior District Judge:
Plaintiff Warren Albert, D.C. (“Dr. Albert”), a chiropractor, seeks judicial review
of a final decision by the Secretary of the United States Department of Health and
Human Services (“Secretary”), which determined that he owes Medicare
approximately $575,000 because he provided inadequate documentation of his

chiropractic treatment.1 Both parties move for judgment on the pleadings pursuant to
Federal Rule of Civil Procedure 12(c). For the reasons that follow, the Court grants Dr.
Albert’s motion and remands for further proceedings. The Secretary’s motion is
denied.
I.
A.

The Statutory and Regulatory Framework
Medicare is the federal health insurance program for the elderly and disabled.

See 42 U.S.C. § 1395 et seq. This case concerns chiropractic services provided under
Medicare Part B, a voluntary supplemental insurance program covering certain
outpatient treatment. See 42 U.S.C. § 1395j et seq. Part B is administered by the
Centers for Medicare & Medicaid Services (“CMS”), a federal agency within the
Department of Health and Human Services, in conjunction with private contractors
known as Medicare Administrative Contractors (“MACs”). See 42 U.S.C. § 1395kk-1.
As a general rule, physicians who provide services under Part B – “providers”
in Medicare terminology – may only be reimbursed for treatment that is “reasonable
and necessary.” 42 U.S.C. § 1395y(a)(1)(A). Part B coverage of chiropractic service
is further limited to include only treatment of the spine by means of manual

1

Dr. Albert also sues on behalf of NY Chiropractic Care, P.C., a professional
corporation registered and operated by Dr. Albert. For simplicity’s sake, the Court
will refer to the plaintiffs collectively as “Dr. Albert.”
2

manipulation – that is, by use of the hands – to correct subluxations, which are
“structural misalignments of the joints, other than fractures or complete dislocations,
that require treatment only by nonsurgical methods.”

42 C.F.R. §§ 411.15,

410.21(b)(1). In addition, the treatment “must have a direct therapeutic relationship to
the patient’s condition and provide reasonable expectation of recovery or improvement
of function.” Medicare Benefit Policy Manual, CMS Pub. No. 100–02, Ch. 15, §
240.1.3.
To obtain reimbursement under Part B, a provider must “furnish[] such
information as may be necessary in order to determine the amounts due . . . .” 42
U.S.C. § 1395l(e). Congress did not specify what documentation a provider must
submit but rather delegated the authority to make that determination to the Secretary,
who may proceed via “formal regulations and (informal) instructional manuals and
letters,” Yale-New Haven Hosp. v. Leavitt, 470 F.3d 71, 74 (2d Cir. 2006), or by
delegating to MACs, who issue local coverage determinations, or LCDs,2 specifying
which services are reimbursable and what documentation is required to obtain
reimbursement, see 42 U.S.C. § 1395ff(f)(2)(B).
As a chiropractor, Dr. Albert was required to follow two documentation

2

A local coverage determination is “a determination by a fiscal intermediary
or a carrier . . . respecting whether or not a particular item or service is covered on
an intermediary- or carrier-wide basis . . . .” 42 U.S.C. § 1395ff(f)(2)(B).
3

guidelines. First, the Medicare Benefit Policy Manual (the “Policy Manual”), an
interpretive manual issued by CMS, sets forth requirements for both initial and
subsequent patient visits. See Policy Manual, CMS Pub. No. 100–02, Ch. 15, §
240.1.2. Second, since Dr. Albert submitted claims to National Government Services
(“NGS”), a MAC, he was subject to a Local Coverage Determination for Chiropractor
Services (the “Chiropractic LCD”), which was issued by NGS in 2008. See NAT’L
GOV’T SERVS., LCD FOR CHIROPRACTIC SERVICES (L27350) (2008). The Chiropractic
LCD largely reiterates the Policy Manual’s requirements but also “provides
clarification to educate providers.” Id.
Three specific requirements contained in both the Policy Manual and
Chiropractic LCD are relevant to this case:
1.

Documentation of initial visits must include (1) the patient’s medical
history, (2) a description of the present illness, (3) a physical examination
of the musculoskeletal system, (4) a diagnosis, (5) a treatment plan, and
(6) the date of initial treatment. See Policy Manual, CMS Pub. No. 10002, Ch. 15, § 240.1.2.2.A.

2.

Documentation of subsequent visits must include (1) the patient’s medical
history, (2) a physical examination, (3) documentation of treatment, and
(4) progress or lack thereof. See id., Ch. 15, § 240.1.2.2.B.

3.

A patient’s medical history – required for both initial and subsequent
visits – should include (1) symptoms causing the patient to seek treatment,
(2) family history if relevant, (3) past health history, (4) mechanism of
trauma, (5) quality and character of symptoms, (6) onset, duration,
intensity, frequency, location and radiation of symptoms, (7) aggravating
or relieving factors, and (8) prior interventions, treatments, medications,
and secondary complaints. See id., Ch. 15, § 240.1.2.
4

B.

The Medicare Payment System and Appeals Process
The Part B reimbursement system is administered by MACs, who “typically

authorize payment of claims immediately upon receipt of the claims, so long as the
claims do not contain glaring irregularities.” Gulfcoast Med. Supply, Inc. v. Sec’y,
Dep’t of Health & Human Servs., 468 F.3d 1347, 1349 (11th Cir. 2006). Later, postpayment audits may be conducted either by MACs or by independent auditors. See
Medicare Program Integrity Manual, CMS Pub. No. 100–08, Ch. 3, § 3.2.2. If billing
irregularities are discovered, the MAC may then recoup the overpayment from the
provider. See 42 C.F.R. §§ 405.370, 405.371(a)(2).
When a MAC determines that a provider has been overpaid, the provider is
entitled to five levels of administrative review: (1) redetermination by a MAC
employee not involved in the initial overpayment determination, see id. §§ 405.940,
405.948; (2) reconsideration by a Qualified Independent Contractor (“QIC”), see id.
§ 405.960; (3) a hearing before an Administrative Law Judge (“ALJ”), see id. §§
405.1000, 405.1002(a); (4) de novo review by the Medicare Appeals Council (the
“Council”), either at the request of the provider, by referral from a MAC, or upon the
Council’s own motion, see id. §§ 405.1100, 405.1102(a), 405.1110; and (5) judicial
review in federal court, see 42 U.S.C. § 405(g).

5

C.

Factual Background
Dr. Albert is licensed in New York and New Jersey. For all times relevant to this

case, he rendered chiropractic treatment to elderly patients in nursing homes around the
New York metropolitan area.
1.

Initial overpayment determination

In January 2010, SafeGuard Services (“SGS”), an independent Medicare auditor,
requested Dr. Albert’s records for 57 patients treated from April 6, 2007 to August 8,
2009, which comprised 1,233 claims. During this period, Dr. Albert initially used a
“fill-in-the-blanks” form for both initial and subsequent visits, which provided a limited
selection of options that Dr. Albert could circle to assess a patient’s history, condition,
and treatment plan. Dr. Albert abandoned this form in mid-2007, and thereafter wrote
narrative paragraphs for both initial and subsequent visits. For 21 of the patients
reviewed by SGS (the “Fill-in-the-Blank Patients”), Dr. Albert used the fill-in-theblanks form for all initial visits, and used a mix of fill-in-the-blanks forms and narrative
paragraphs for subsequent visits. For the remaining 36 patients (the “Narrative
Paragraph Patients”), Dr. Albert utilized narrative paragraphs for both initial and
subsequent visits.
In May 2011, SGS informed him by letter that 100% of the claims that they
reviewed were denied. SGS further stated that it had utilized a statistical sampling
method and concluded that Dr. Albert was overpaid by $578,107.91. Dr. Albert
6

requested a redetermination by SGS and reconsideration by a QIC, both of which
affirmed SGS’s overpayment determination.
2.

Appeal to the ALJ

Dr. Albert appealed and had a hearing before an ALJ on September 24, 2012.
At the hearing, Dr. Albert testified that he treats patients only on referral from the
attending physician, who must approve his proposed treatment plan before he
commences chiropractic treatment. Dr. Albert further testified that, because the
patient’s medical records are voluminous and kept by the nursing home, he cannot
include all the patient’s medical history in his own documentation notes. Finally, he
argued that the Chiropractic LCD’s requirements are confusing and that he had
requested assistance from CMS but “there’s no real guidance” about how to comply.
Administrative Record (“AR”) 1871.
On January 13, 2013, the ALJ issued a written decision finding that Dr. Albert
should be reimbursed for all but a small fraction of the 1,233 claims. In the decision,
the ALJ concluded that the fill-in-the-blanks form did not satisfy the Chiropractic LCD
requirements for initial visits because “there is no medical history listed . . . [and] the
descriptions of the physical examination and treatment plan for those beneficiaries
consists of only a few circled words.”

AR 34.

The ALJ accordingly denied

reimbursement for Dr. Albert’s 21 initial visits with the Fill-in-the-Blanks Patients.
However, the ALJ concluded that the fill-in-the-blanks form “demonstrat[ed]
7

substantial compliance” with the LCD’s requirements for subsequent visits, and that
“[t]o require stringent adherence to the [Chiropractic LCD’s] documentation
requirements when there is no evidence of educational intervention on the part of the
carrier . . . would be against good consciousness [sic] and equity and have devastating
financial consequences for [Dr. Albert].” Id. Finally, the ALJ found that the Narrative
Paragraph Patients’ files satisfied the documentation requirements for both initial and
subsequent visits because those patients’ notes “include detailed re-evaluation
examinations listing a history of past treatments, assessments of treatment
effectiveness, subluxation locations, and treatment plans.” Id.
3.

CMS’s referral to Council

On January 25, 2013, CMS referred the ALJ’s decision to the Council. In its
referral, CMS argued that the ALJ erred by applying a “substantial compliance”
standard because the Chiropractic LCD’s requirements “are very specific and written
such that [Dr. Albert] knew or should have known the requirements.” AR 77. In
particular, CMS argued that “[the Chiropractic LCD] lists eight specific items of
information that constitute a patient’s history . . . [but] [t]he ALJ failed to address
whether the documentation in each beneficiary’s case file . . . satisfied these eight
elements.” AR 76. CMS also argued that the ALJ erred by taking equitable
considerations into account because “[w]hether [Dr. Albert] furnished [adequate]
documentation . . . is a question of law and fact, not one of good conscience or equity.”
8

AR 77.
4.

The Council’s decision

On June 6, 2013, the Council issued a written decision concluding that Dr. Albert
should be denied reimbursement for all 1,233 claims. In its decision, the Council first
emphasized that “the [Chiropractic LCD’s] documentation criteria are explicit and
consistent with the limited availability of Medicare coverage for chiropractic services.”
AR 16. The Council concluded that “there is no basis for the ALJ’s determination that
[Dr. Albert] should be afforded a broad-based benefit of the doubt based on lack of
assistance from its Medicare contractor or a perceived lack of clarity of those
requirements.” AR 17.
The Council next examined a sample of the Narrative Paragraph Patients’ files
and concluded that each file failed to satisfy the requirements for both initial and
subsequent visits. In so holding, the Council noted that a patient’s medical history
“requires documentation of a comprehensive, eight-element medical history,” AR 18,
and concluded that each file lacked one or more of those elements, see, e.g., AR 19
(“There is no description of the beneficiary’s prior medical history, interventions,
aggravating or mitigating factors.”); id. (“There is no discussion of the symptoms’
onset, frequency, or duration, aggravating or relieving factors or baseline measurements
of functional level.”). The Council further noted that several of the Narrative Paragraph
Patients’ files exhibited other documentary shortcomings, for example failing to
9

identify the precise level of subluxation or the expectation of objective clinical
improvement. See AR 18-20.
Finally, the Council examined a sample of the Fill-in-the-Blanks Patients’ files
and concluded that the fill-in-the-blanks forms failed to satisfy the Chiropractic LCD
requirements because the forms “provide no discernible or measurable evidence of a
beneficiary’s medical history, physical examination, response to prior treatments and
progress towards goals.” AR 22.
Dr. Albert timely sought judicial review of the Council’s decision.3
II.
Dr. Albert concedes that the fill-in-the-blanks form does not satisfy the
documentation requirements for initial visits and that the Fill-in-the Blanks Patients’
21 initial visits are therefore not reimbursable. However, he argues that the Council
erred in denying the remainder of the claims for two reasons: first, by impermissibly
applying the Chiropractic LCD retroactively; and second, by erroneously interpreting
the Chiropractic LCD’s requirements. The Court will address these arguments in turn.
3

Separately, in November 2010, CMS determined that Dr. Albert had failed
to comply with the Chiropractic LCD’s documentation requirements for other
claims covering approximately the same period. Dr. Albert appealed that
determination and had another hearing before an ALJ on January 3, 2012. On
February 24, 2012, the ALJ issued a written decision finding that Dr. Albert
“complied with the Medicare documentation requirement for initial and subsequent
visits and provided detailed medical history, examination, specific location of
subluxation, diagnosis, treatment plan and goals.” AR 261. The ALJ therefore
concluded that “all the claims at issue in this appeal are payable by Medicare.” Id.
No appeal was taken from the ALJ’s decision to the Council.
10

A.

The Council’s Application of the Chiropractic LCD
Dr. Albert argues that since the Chiropractic LCD only went into effect in

November 2008, the Council erred by retroactively applying it to his claims, which
related to services rendered between April 2007 and August 2009.
The Court disagrees. While the ALJ and Council referred exclusively to the
Chiropractic LCD throughout the administrative appeal process, the Chiropractic LCD
simply restates requirements that have been in effect since 2003, when the Health Care
Financing Administration (the precursor to CMS) amended the Medicare Carriers
Manual (the precursor to the Policy Manual) to specify requirements for initial and
subsequent patient visits. See U.S. DEP’T OF HEALTH & HUMAN SERVS., HCFA Pub.
No. 14-3, TRANSMITTAL 1805, CHANGE REQUEST 2717 (June 2003).

Those

requirements, which became effective on June 27, 2003, and which were relocated to
the Policy Manual in November 2003, are identical to the requirements at issue in this
case. Compare id. at 2-3 (providing that initial visits must include a patient’s medical
history, description of present illness, evaluation of musculoskeletal system, diagnosis,
treatment plan, and date of initial treatment), with Policy Manual, CMS Pub. No. 10002, Ch. 15, § 240.1.2.2.A (same), and NAT’L GOV’T SERVS., LCD FOR CHIROPRACTIC
SERVICES (L27350) (2008) (same).
The Chiropractic LCD concededly contains additional commentary and
explication not found in the Policy Manual. However, this additional material
11

supplements, rather than supplants, the Policy Manual’s requirements.4 See U.S. ex rel.
Ryan v. Lederman, No. 04-CV-2483, 2014 WL 1910096, at *4 (E.D.N.Y. May 13,
2014) (Gleeson, J.) (“LCDs are gapfillers: where there is no national rule, a local
contractor may make its own rules.”). Accordingly, the Council did not err by applying
the Chiropractic LCD.
B.

The Council’s Interpretation of the Chiropractic LCD
Dr. Albert next contends that the Council committed legal error by interpreting

the Chiropractic LCD’s documentation requirements too strictly. As a preliminary
matter, it is somewhat unclear what standard of review the Court should apply to the
Council’s legal interpretation of the LCD. The Supreme Court has, of course, “long
recognized that considerable weight should be accorded to an executive department’s
construction of a statutory scheme it is entrusted to administer.” Chevron, U.S.A., Inc.
v. Natural Res. Def. Council, Inc., 467 U.S. 837, 844 (1984). At the same time,
whether a court defers to an agency’s interpretation in a particular case “depends in
significant part upon the interpretive method used and the nature of the question at
4

At oral argument, Dr. Albert contended that the Chiropractic LCD
introduced one new substantive requirement, namely that subsequent visits must
include “[p]rogress or lack thereof, related to treatment goals and plan of case.”
NAT’L GOV’T SERVS., LCD FOR CHIROPRACTIC SERVICES (L27350) at 16 (2008).
However, this ‘new’ requirement simply duplicates the pre-existing requirement
that subsequent visits include “[an] assessment of [the] change in patient condition
since last visit.” See U.S. DEP’T OF HEALTH & HUMAN SERVS., HCFA Pub. No.
14-3, TRANSMITTAL 1805, CHANGE REQUEST 2717 at 3 (June 2003); Policy
Manual, CMS Pub. No. 100-02, Ch. 15, § 240.1.2.2.B. Accordingly, this addition
does not affect the Court’s analysis.
12

issue.” Barnhart v. Walton, 535 U.S. 212, 222 (2002).
Accordingly, the Supreme Court has delineated various levels of administrative
deference, the application of which depends on who is doing the interpreting, what is
being interpreted, and what form the interpretation takes. As the Second Circuit has
explained:
When Congress has entrusted rulemaking authority under a statute to an
administrative agency, we evaluate the agency’s implementing
regulations under Chevron, U.S.A., Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837, 104 S. Ct. 2778, 81 L. Ed. 2d 694 (1984).
. . . A similar deference applies when an agency interprets its own
regulations. That interpretation, regardless of the formality of the
procedures used to formulate it, is “controlling unless plainly erroneous
or inconsistent with the regulation[s].” Auer v. Robbins, 519 U.S. 452,
461, 117 S. Ct. 905, 137 L. Ed. 2d 79 (1997) (internal quotation marks
omitted) . . . . Even if neither Chevron nor Auer applies, an agency
interpretation is still entitled to “‘respect according to its
persuasiveness’” under Skidmore v. Swift & Co., 323 U.S. 134, 65 S. Ct.
161, 89 L. Ed. 124 (1944).
Encarnacion ex rel. George v. Astrue, 568 F.3d 72, 78 (2d Cir. 2009).
The distinction between these various levels is never crystal clear. See United
States v. W.R. Grace & Co., 429 F.3d 1224, 1235 (9th Cir. 2005) (“[T]he continuum
of agency deference has been fraught with ambiguity.”). The waters are muddier still
in the Medicare context, since “[i]n cases such as this, where a highly expert agency
administers a large and complex regulatory scheme in cooperation with many other
institutional actors, the various possible standards for deference begin to converge.”
Cmty. Health Ctr. v. Wilson-Coker, 311 F.3d 132, 138 (2d Cir. 2002).
13

To resolve this question, the Court ordered supplementary briefing and oral
argument on (1) what standard of review applies to the Council’s legal interpretations,
and (2) whether the Court should defer to the Council’s interpretation. See Mem. &
Order, Docket Entry No. 25 (Jan. 30, 2015). Having carefully considered the
supplementary briefing, the Court concludes that its resolution of this question is
controlled by Estate of Landers v. Leavitt, 545 F.3d 98 (2d Cir. 2008), as revised (Jan.
15, 2009). In that case, Medicare beneficiaries challenged the Policy Manual’s
interpretation of the word “inpatient,” a term referenced by the Medicare statute and
regulations but defined only by the Policy Manual. Id. at 104. Considering whether
the Policy Manual was eligible for deference under Chevron, the Second Circuit
acknowledged that “[m]ost agency interpretations that have qualified for Chevron
deference are rules that have been promulgated in regulations issued through notice and
comment or adjudication, or in another format authorized by Congress for use in
issuing legislative rules.” Id. at 106 (internal quotation marks omitted) (quoting Cmty.
Health Ctr., 311 F.3d at 138). The court further noted that “[a]lthough nonlegislative
rules are not per se ineligible for Chevron deference as a general matter, we are aware
of few, if any, instances in which an agency manual . . . has been accorded Chevron
deference.” Id.
The Second Circuit concluded that the Policy Manual, while not entitled to
deference under Chevron, is nonetheless entitled to deference under Skidmore. Id. at
14

107. This case is admittedly somewhat different from Estate of Landers, since the
Council is here interpreting the Policy Manual, and thus, in effect, interpreting an
interpretation. However, given the Council’s institutional expertise in interpreting the
Part B statute and regulations, the reasoning of Estate of Landers is just as applicable
in this case. Accordingly, the Court concludes that the Council’s interpretation of the
Chiropractic LCD should be accorded Skidmore deference.
Under Skidmore, the Council’s interpretation is entitled to “respect according to
its persuasiveness, as evidenced by the thoroughness evident in the agency’s
consideration, the validity of its reasoning, its consistency with earlier and later
pronouncements, and all those factors which give it power to persuade.” Sai Kwan
Wong v. Doar, 571 F.3d 247, 260 (2d Cir. 2009) (internal quotation marks and citations
omitted) (quoting Skidmore, 323 U.S. at 140). Even under that deferential standard of
review, however, the Court finds the Council’s interpretation of the Chiropractic LCD
– and in particular, of the LCD’s medical history requirements – to be unpersuasive.
The LCD states that physicians “must” comply with certain requirements and “should”
comply with others. Compare Policy Manual, CMS Pub. No. 100–02, Ch. 15, §
240.1.2 (“The precise level of subluxation must be specified by the chiropractor . . . .”),
with id., Ch. 15, § 240.1.2.2.A (“The treatment plan should include the following . . .
.”). Of relevance here, both initial and subsequent visits must include a patient’s
medical history, which in turn “should include” a list of eight factors, including “family
15

history if relevant,” “onset, duration, intensity, frequency, location and radiation of
symptoms,” and “prior interventions, treatments, medications, and secondary
complaints.” See id., Ch. 15, § 240.1.2.
The Council, however, ignores the distinction between ‘must’ and ‘should’ and
concludes that a patient’s medical history “requires documentation of a comprehensive,
eight-element medical history.” AR 18 (emphasis added). Accordingly, in reviewing
Dr. Albert’s claims, the Council consistently faults Dr. Albert for failing to include
various elements of this eight-element history. See, e.g., AR 19 (“There is no
description of the beneficiary’s prior medical history, interventions, aggravating or
mitigating factors.”); id. (“There is no discussion of the symptoms’ onset, frequency,
or duration, aggravating or relieving factors or baseline measurements of functional
level.”); AR 20 (“There is no description of the beneficiary’s prior medical history,
interventions, aggravating or mitigating factors.”).
This was error. The word ‘must,’ of course, possesses an “unmistakably
mandatory character.” Hewitt v. Helms, 459 U.S. 460, 471 (1983). In contrast, the
word ‘should’ “merely suggest[s] an approach, rather than mandat[es] a step-by-step
analysis.” United States v. Harris, 13 F.3d 555, 559 (2d Cir. 1994); see also United
States v. Maria, 186 F.3d 65, 70 (2d Cir. 1999) (noting that “the common meaning of
‘should’ suggests or recommends a course of action”). Indeed, the Policy Manual itself
appears to contemplate that the eight-factor medical history prescribes an ideal rather
16

than establishes a baseline, providing, for example, that a physician should include
“family history, if relevant.” Policy Manual, CMS Pub. No. 100–02, Ch. 15, § 240.1.2
(emphasis added).
Having carefully reviewed the extensive administrative record, the Court
concludes that Dr. Albert’s files consistently incorporate several of the eight-factor
history requirements. The following examples are representative. In his notes for
patient M.A., Dr. Albert details the symptoms causing M.A. to seek treatment, the
quality and character of the symptoms, and the symptoms’ frequency and location. See,
e.g., AR 794 (noting that “[c]ervical, thoracic, and lumbar malpositioning was
identified” and that M.A. continues to experience “stiffness and tightness of the upper
back, mid back, and neck radiating to the left shoulder”). Dr. Albert’s notes for patient
V.B. describe the same three elements. See, e.g., AR 822 (noting that “[t]he patient has
a primary complaint of stiffness, tightness and fatigue of the neck, upper back and
lower back” and exhibits “moderate to severe decreased function of the cervical and
lumbar spine”). The Council was therefore wrong to reject Dr. Albert’s claims simply
for failure to include all eight elements, without considering whether the elements he
did submit, when read in conjunction with the remainder of his treatment notes, “fully
support[ed] the medical necessity for [chiropractic services].” NAT’L GOV’T SERVS.,
LCD FOR CHIROPRACTIC SERVICES at 13 (L27350) (2008).
The question, then, is whether the Court can overlook the Council’s error or
17

whether remand is warranted. As the Second Circuit has noted, “[w]here an error of
law has been made that might have affected the disposition of the case, this court
cannot fulfill its statutory and constitutional duty to review the decision of the
administrative agency by simply deferring to the factual findings of the [agency].”
Townley v. Heckler, 748 F.2d 109, 112 (2d Cir. 1984). At the same time, “[w]here
application of the correct legal principles to the record could lead only to the same
conclusion, there is no need to require agency reconsideration.” Zabala v. Astrue, 595
F.3d 402, 409 (2d Cir. 2010) (internal punctuation marks omitted) (quoting Johnson v.
Bowen, 817 F.2d 983, 986 (2d Cir. 1987)).
It is concededly true that the Council noted other errors in several of Dr. Albert’s
files, and that these errors pertained to mandatory requirements in the Chiropractic
LCD. See, e.g., AR 18 (noting lack of precise level of subluxation); AR 20 (noting lack
of measurable indications of progress). At oral argument, the government contended
that, even if the Council erred in interpreting the medical history requirements, the
other insufficiencies noted by the Council constitute independent grounds warranting
affirmance under substantial evidence review. The Court disagrees. The Council
placed heavy emphasis on the medical history requirements throughout its decision, and
referenced the medical history requirements in all but one of the representative
beneficiary files it reviewed. See AR 18-20 (noting failure to comply with medical
history requirements for patients M.A., E.D., L.H., and L.M.). Furthermore, Dr.
18

Albert’s failure to comply with the medical history requirements was a primary reason
for denying reimbursement for three of the five sample patient files reviewed by the
Council. See AR 18 (denying reimbursement for patient M.A. in large part due to
failure to include complete history); AR 19 (same analysis with respect to patient E.D.);
id. (same analysis with respect to patient L.H.).
Accordingly, the Court concludes that the Council’s error likely affected the
disposition of Dr. Albert’s case and that remand is warranted. See Pollard v. Halter,
377 F.3d 183, 192 (2d Cir. 2004) (concluding, in a Social Security case, that remand
was warranted where Social Security Administration Appeal Council applied incorrect
rules and where court could not determine that error was harmless).
III.
For the foregoing reasons, the Court reverses the decision of the Council and
remands for further proceedings consistent with this opinion pursuant to the fourth
sentence of 42 U.S.C. § 405(g) (“The court shall have power to enter, upon the
pleadings and transcript of the record, a judgment affirming, modifying, or reversing
the decision of the Commissioner of Social Security, with or without remanding the
cause for a rehearing.”).
On remand, the Council shall reconsider whether Dr. Albert’s services were
reimbursable in light of a correct interpretation of the relevant documentation
guidelines. For guidance on remand, the Council shall not deny Dr. Albert’s claims
19

solely for failure to submit an eight-element medical history, but rather shall consider
whether the medical history he did submit, when taken in totality with his other
treatment notes, demonstrates that the patient “ha[s] a significant health problem in the
form of a neuro-musculoskeletal condition necessitating treatment” and that “the
manipulative services rendered . . . have a direct therapeutic relationship to the patient’s
condition and provide reasonable expectation of recovery or improvement of function.”
NAT’L GOV’T SERVS., LCD FOR CHIROPRACTIC SERVICES (L27350) at 4 (2008).
SO ORDERED.
/S/ Frederic Block______________
FREDERIC BLOCK
Senior United States District Judge
Brooklyn, New York
July 28, 2015

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