Ryan et al v. Burwell

Filing 65

OPINION AND ORDER granting 13 Motion to Certify a Regional Class. Plaintiffs' counsel are appointed class counsel under Fed. R. Civ. P. 23(g). Signed by Judge Geoffrey W. Crawford on 1/13/2016. (esb)

U.S. DISTRICT COURT

UNITED STATES DISTRICT COURT

FOR THE

DISTRICT OF VERMONT

MARCELLA RYAN and
JOHN HERBERT,
on behalf of themselves and
all others similarly situated,
Plaintiffs,
v.
SYLVIA MATHEWS BURWELL,
Secretary of Health and Human Services,
Defendant.

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[HSTR!CT OF VERMONT
FiLrrED

1016 JAN 13 AM 9: 37

CLERK
BY-::;~~.~:;.'i " I~ i:-!") v
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Case No. 5:14-cv-00269

OPINION AND ORDER RE:

PLAINTIFFS' MOTION TO CERTIFY A REGIONAL CLASS

(Doc. 13)
Plaintiffs Marcella Ryan and John Herbert are Medicare beneficiaries who receive home
health care services. They allege that the Secretary of Health and Human Services has
systematically failed to follow her own regulations and guidance governing appeals of Medicare
coverage for home health care services. (Doc. 1 at 1, ,-r 1.) They allege that Medicare policy
requires Medicare contractors and appellate reviewers to give "great weight" to a prior favorable
final appellate decision finding a beneficiary to be "confmed to the home" (or "homebound")
when deciding whether a beneficiary is homebound in a subsequent appeal. (Id.)l Plaintiffs
allege that the Secretary has failed to apply that policy, and "routinely denies Medicare coverage
for home health services on the basis that Plaintiffs were 'not homebound,' despite the fact that
administrative law judges have issued favorable final decisions finding Plaintiffs homebound."

(Id. at 1-2, ,-r 2.) Plaintiffs seek declaratory and injunctive relief, and in particular seek an order
that the Medicare review process be corrected and that Plaintiffs' denied claims for coverage be
"re-review[ed]." (Id. at 24,,-r 4(e).)

Plaintiffs refer to this policy as the "Prior Favorable Homebound Decision policy" (e.g.,
id. at 4, ,-r 14) or simply the "Prior Favorable Homebound policy" (e.g., id. at 15, ,-r 67).
1

Plaintiffs have moved to certify a regional class under Rule 23 of the Federal Rules of
Civil Procedure. (Doc. 13.) They seek to define the class as:
All beneficiaries of Medicare Parts A or B, in Connecticut, Maine, Massachusetts,
New Hampshire, New York, Rhode Island, and Vermont (Medicare
Administrative Contractor Jurisdiction K) who (a) have received Medicare
coverage for home health nursing or therapy services on the basis of a "favorable
final appellate decision" and (b) who have subsequently been denied, or will be
denied, coverage for additional services on the basis of not being homebound, on
or after January 1,2010.
(Doc. 1 at 3-4, ~ 12; Doc. 34 at 9.) The Secretary opposes the Motion (Doc. 24), and Plaintiffs
have filed a Reply (Doc. 34). The court heard argument on September 21,2015. Final briefing
on the matter was completed on December 7, 2015. For the reasons stated below, Plaintiffs'
Motion to CertifY a Regional Class (Doc. 13) is GRANTED.
Background
Previously in this case, the court outlined some of the background of the Medicare and
Medicaid programs, as well as the statutory and regulatory requirements for eligibility for home
health benefits under Medicare. (Doc. 44 at 1-3.) Eligibility for home health benefits under
Medicare is determined by statute, 42 U.S.C. § 1395f(a)(2)(C), and further defined by regulation,
42 C.F .R. § 409.42. One of the requirements for eligibility is that the beneficiary be confined to
his or her home (or "homebound"). Under § 1395f(a), an individual is confined to his or her
home
if the individual has a condition, due to an illness or injury, that restricts the
ability of the individual to leave his or her home except with the assistance of
another individual or the aid of a supportive device (such as crutches, a cane, a
wheelchair, or a walker), or if the individual has a condition such that leaving his
or her home is medically contraindicated. While an individual does not have to
be bedridden to be considered "confined to his home", the condition of the
individual should be such that there exists a normal inability to leave home and
that leaving home requires a considerable and taxing effort by the individual.
Determining whether a beneficiary is homebound is a fact-intensive inquiry.
The court also previously outlined the administrative claims review process. (See Doc.
44 at 3-4.) There is a multiple-level administrative process for Medicare determinations and
review that applies when a claim is premised on a beneficiary being homebound. See generally
42 U.S.C. § 1395ff; 42 C.F.R. § 405.904. An "initial determination" is made by a Medicare
Administrative Contractor (MAC). See 42 C.F.R. § 405.904(a)(2). A beneficiary may then
2

request a "redetermination." Id. Following the redetermination, the beneficiary may pursue
administrative appeals, beginning with a request for "reconsideration," which is performed by a
"Qualified Independent Contractor (QIC)." Id. After reconsideration, a beneficiary may request
a hearing before an administrative law judge (ALJ). Id. Finally, a beneficiary may request
"review" by the Medicare Appeals Council. Id. 2
Manuals issued by the Department of Health and Human Services' Centers for Medicare
and Medicaid Services (CMS) provide guidance to the decisionmakers in the administrative
process. Two ofthose manuals are relevant in this case. The Medicare Program Integrity
Manual (MPIM) sets policies regarding how to conduct the "medical review" necessary to
determine whether to pay a claim. Ctrs. for Medicare & Medicaid Servs., https:llwww.cms.gov/
regulations-and -guidancelguidance/manuals/internet -only-manuals-ioms- itemslcmsO 1903 3 .html.
The Medicare Claims Processing Manual (MCPM) sets policies regarding adjudicating
administrative appeals of Medicare claim denials. Ctrs. for Medicare & Medicaid Servs., https:11
www.cms.gov/regulations-and-guidance/guidance/manuals/internet-only-manuals-ioms­

itemslcmsO 18912.html.
In 2004, language was added to both the MPIM and the MCPM creating the Prior
Favorable Homebound policy at issue in this case. The 2004 language instructed Regional
Home Health Intermediaries (RHHIs) to:
Afford the favorable final appellate decision that a beneficiary is "confined to
home" great weight in evaluating whether the beneficiary is confined to the home
when reviewing services rendered after the service date of the claim addressed in
the favorable final appellate decision unless there has been a change in facts (such
as medical improvement or an advance in medical technology) that has improved
the beneficiary's ability to leave the home.
CMS Manual System, Pub. 100-08 MPIM, Transmittal R71PI2, at 54 (Apr. 9,2004),

https:llwww.cms.govlRegulations-and-Guidance/Guidance/Transmittals/Downloads/R71PI2.pdf;

CMS Manual System, Pub. 100-04 MCPM, Transmittal 381, § 50.7.11(D), https:11

www.cms. gov/Regulations-and -Guidance/Guidance/TransmittalslDownloadslR3 81 CP .pdf

(Nov. 26, 2004).

Judicial review ofthe Secretary's final decision is also available. See 42 U.S.C.
§ 1395ff(b)(1)(A) (incorporating 42 U.S.C. § 405(g); 42 U.S.C. § 405.904(a)(2).
2

3

RHHIs, together with "carriers," are now known as MACs. (See Doc. 44 at 3 ("MACs
were fonnerly known as 'fiscal intennediaries' for Part A and 'carriers' for Part B.").) Since
MACs are involved only at the detennination and redetennination stages of the administrative
process, the Prior Favorable Homebound policy language did not directly apply to the
"reconsideration," "hearing," or "review" stages. 3 Nevertheless, QICs, ALJs, and the Medicare
Appeals Council are required to give "substantial deference" to CMS program guidance
(including program manual instructions) if applicable to a particular case, and are required to
explain their reasons for declining to follow those policies. See 42 C.F.R. §§ 405.968(b)(2), (3)
(QICs); 405.1062(a), (b) (ADs and the Medicare Appeals Council).
In 2008, CMS deleted the Prior Favorable Homebound policy language from the MCPM.
CMS Manual System, Pub. 100-04 MCPM, Transmittal 1485, https:llwww.cms.gov/
Regulations-and-Guidance/Guidance/Transmittals/Downloads/Rl485CP.pdf (Mar. 28, 2008).
The Secretary asserts that, through an oversight, the language in the MPIM was not deleted at the
same time. (Doc. 51 at 2.) According to the Secretary, this litigation brought that oversight to
CMS's attention. (Id.) The language remained in the MPIM until it was deleted effective
August 3, 2015. CMS Manual System, Pub. 100-08 MPIM, Transmittal 601,
https:llwww.cms.gov/Regulations-and-Guidance/Guidance/Transmittals/Downloads/R601PLpdf
(July 2,2015).

Analysis
I.

Composition of the Proposed Class
A.

Individuals with Lapsed Claims

In its October 19, 2015 Entry Order, the court observed that 42 U.S.C. § 405(g) contains
a 60-day limitations period. (Doc. 56 at 2.) Noting that there might be some members of the
purported class whose claims might have lapsed under that limitations period, the court requested
that the parties brief the issue of whether individuals with lapsed claims must be excluded from
the class. (ld.) Plaintiffs assert that individuals with lapsed claims should not be excluded from
the class for two reasons: (1) the Secretary failed to raise the 60-day rule as a defense, thereby
waiving that statute of limitations; and (2) the 60-day rule should be tolled because beneficiaries
3 Although 42 U.S.C. § 1395ffplaces redetenninations within the category of "initial
detenninations" rather than the "appeals" category, the MCPM (which concerns appeals)
describes redetennination as the "first level of appeal." That may explain why the Prior
Favorable Homebound policy language was added to the MCPM as well as the MPIM.

4

could not have known that the Secretary was not following her own policy. (Doc. 59 at 3-10.)
The Secretary maintains that the statute-of-limitations defense was not waived and that there is
no basis for tolling. (Doc. 63 at 1--4.)
The court begins with the waiver issue. It is true that the Secretary may waive § 405(g)' s
60-day requirement. See City ofNew York v. Heckler, 742 F.2d 729, 736 (2d Cir. 1984), aff'd
sub nom. Bowen v. City ofNew York, 476 U.S. 467 (1986). It is also true that the Secretary did

not raise that requirement as a defense in her Motion to Dismiss (Doc. 19) or in her Answer
(Doc. 48), and did not otherwise discuss the issue until the court raised it sua sponte in the
October 19, 2015 Entry Order.
Where litigation has proceeded past the point at which a limitations defense is normally
required to be raised, courts ordinarily should not raise such defenses sua sponte. Pino v. Ryan,
49 F.3d 51,53 (2d Cir. 1995). Here, however, the litigation has not yet proceeded past the class­
certification stage, and it makes sense to examine whether some class members might have
lapsed claims. This court's decision in Mason v. Bowen is instructive-the issue of lapsed
claims under § 405(g) was not raised until after the plaintiffs had moved for class certification.
Nos. 83-224, 83-231, 83-390, 83-391, 83-406, 1986 WL 83399 at *1-2 (D. Vt. May 21, 1986).
Here, once the court suggested that the 60-day limitation might have an impact on the
composition of the class, the Secretary promptly responded and argued that the class definition
should be limited. The court concludes that there was no waiver.
The second issue is whether the 60-day limitations period should be equitably tolled. The
Second Circuit in Heckler held that "[w ]here the Government's secretive conduct prevents
plaintiffs from knowing of a violation of rights, statutes of limitations have been tolled until such
time as plaintiffs had a reasonable opportunity to learn the facts concerning the cause of action."
Heckler, 742 F.2d at 738. Equitable tolling was warranted in that case because the Social

Security Administration had disregarded the law requiring an individual assessment of the
residual functional capacity of each claimant by informally, and without public disclosure,
adopting a practice under which many disability claimants with mental impairments were
presumed to retain a residual functional capacity to perform at least unskilled work. Claimants
would learn of the denial or loss of benefits, but "did not and could not know that those adverse
decisions had been made on the basis of a systematic procedural irregularity." Id.

5

Plaintiffs assert that the same is true in this case, since the Secretary opted not to follow
the Prior Favorable Homebound policy without any publication or announcement to that effect.

(See Doc. 59 at 9.) The Secretary maintains that claimants could have discovered the Secretary's
practice by simply inspecting the text of a decision denying benefits. According to the Secretary,
"if the decision's text did not refer to the beneficiary'S prior favorable final appellate homebound
decision, that beneficiary would be on notice that the prior decision was not considered and
therefore not given 'great weight. '" (Doc. 63 at 4.)
As noted above, QICs, ALJs, and the Medicare Appeals Council are required to give
"substantial deference" to CMS program guidance (including program manual instructions) if
applicable to a particular case, and are required to explain their reasons for declining to follow
those policies. By the time a claimant with a prior favorable final appellate decision on ability to
leave the home exhausts her administrative appeals, she could determine whether the Prior
Favorable Homebound policy was applied in her case. Multiple levels of review provided
repeated opportunities for claimants to recognize that the Secretary had not followed the Prior
Favorable Homebound policy. There is no basis for equitable tolling in this case. Accordingly,
any class shall generally be limited to claimants who satisfied § 405(g)'s 60-day filing
requirement as of March 5, 2015, the date Plaintiffs filed for class certification. See Mason,
1986 WL 83399, at *2. 4

B.

Whether the Class Must be Closed

The "great weight" language was deleted from the MPIM effective August 3,2015. On
that date, the Prior Favorable Homebound policy was no longer in effect for any level of
Medicare review. Plaintiffs assert that their due process claim "is independent of the claim
brought under the Prior Favorable Homebound policy, and this claim alleges ongoing harm to
the class as a result of the due process violation." (Doc. 59 at 10.) According to Plaintiffs, the
Secretary's removal of the policy should not result in a closed class "due to the ongoing harm to
the class as a result ofthe Secretary's violation of due process." (Id. at 11.) The Secretary
contends that Plaintiffs' due process claim is, like Plaintiffs' other claims, based on the existence
of the now-repealed Prior Favorable Homebound policy. (Doc. 63 at 5.) The Secretary also
The Secretary concedes that tolling may be appropriate where an individual putative
class member has a mental condition that prevented him or her from filing a timely appeal.
(Doc. 63 at 4.) The court will not exclude from the class any claimant who can prove a
particularized, individual basis for tolling § 405(g)'s 60-day filing requirement.
4

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maintains that, even if that were not so, Plaintiffs have failed to state an independent due process
claim because the multi-level Medicare administrative appeal process supplies sufficient process.
(!d.)

The court concludes that Plaintiffs can state no due process violation for Medicare
benefits claims commenced on or after August 3,2015. "Governmental action may be
challenged as a violation of due process only when it may be shown that it deprives a litigant of a
property or a liberty interest." Concerned Home Care Providers, Inc. v. Cuomo, 783 F.3d 77,91
(2d Cir. 2015) (quoting Gen. Elec. Co. v. NY State Dep't a/Labor, 936 F.2d 1448, 1453
(2d Cir. 1991)). Removal ofthe Prior Favorable Homebound policy does not implicate any
property or liberty interest for claims filed on or after August 3, 2015. 5 Plaintiffs cite no statute
or regulation mandating the Prior Favorable Homebound policy. If Plaintiffs prevailed on their
due process claim, then the Secretary might be deterred from updating the MPIM and MCPM in
any way, for fear that-even ifthe original guidance proved completely unworkable-it could
never be taken away once it was given. The court accordingly concludes that the class must be
closed so as not to include individuals who filed new claims for Medicare benefits on or after
August 3,2015.
II.

Requirements for Class Certification
Under Rule 23, "[0 ]ne or more members of a class may sue ... as representative parties

on behalf of all members" only ifthe following four prerequisites are satisfied:
(1)
(2)
(3)
(4)

the class is so numerous that joinder of all members is impracticable;
there are questions of law or fact common to the class;
the claims or defenses of the representative parties are typical of the claims or
defenses of the class; and
the representative parties will fairly and adequately protect the interests of the
class.

Fed. R. Civ. P. 23(a). The party seeking class certification bears the burden of showing that the
proposed class satisfies those four requirements (dubbed "numerosity," "commonality,"
"typicality," and "adequacy of representation," respectively). See Glatt v. Fox Searchlight

Pictures, Inc., 791 F.3d 376, 385 (2d Cir. 2015). "A class may be certified only if, 'after a

Nor do Plaintiffs identify any procedural infirmity with the removal ofthe Prior
Favorable Homebound policy. There is no dispute that the Secretary may make changes to the
MPIM and MCPM, and the "transmittals" that CMS uses to communicate those changes provide
sufficient notice.
5

7

rigorous analysis,' the district court is satisfied that the prerequisites of Rule 23(a)" are
established. Roach v. TL. Cannon Corp., 778 F.3d 401,405 (2d Cir. 2015) (quoting Com cast

Corp. v. Behrend, 133 S. Ct. 1426, 1432 (2013)).
In addition to the prerequisites of Rule 23(a), a plaintiff "must also satisfy through
evidentiary proof at least one of the provisions of Rule 23(b)." Comcast, 133 S. Ct. at 1432. In
this case, Plaintiffs rely on Rule 23(b )(2), asserting that the Secretary "has acted or refused to act
on grounds that apply generally to the class, so that final injunctive relief or corresponding
declaratory relief is appropriate respecting the class as a whole." Fed. R. Civ. P. 23(b)(2).

A.

Numerosity

"Numerosity is presumed for classes larger than forty members." Pa. Pub. Sch. Emps.

Ret. Sys. v. Morgan Stanley & Co., 772 F.3d 111, 120 (2d Cir. 2014). Plaintiffs rely on the
February 9, 2015 affidavit of Steve Schlipf, a software developer who has access to the computer
database of cases at Vermont Legal Aid. Schlipf says that he "searched for Medicare
beneficiaries that had a previous favorable Administrative Law Judge decision made on or after
July 1,2001 and a subsequent denial of a claim at Redetermination on or after January 1,2010."
(Doc. 13-2,-r 3.) According to Schlipf, he determined from his search that, in Vermont alone,
there are at least 107 unique beneficiaries who had a redetermination denial on or after
January 1, 2010, and who also had a favorable ALJ decision for one or more episodes in a
previous case. (See id. ,-r 4.)
The Secretary asserts that the court should give no weight to Schlipf's affidavit, since his
computer search was not limited to claims for home health services, but rather searched for all
claims by Medicare beneficiaries that had a previous favorable ALJ decision on some
unspecified issue. (Doc. 60 at 4.) Plaintiffs reply that the "overwhelming majority of the cases
identified in the sample were home health cases" because "[ d]uring the relevant time period, the
Medicare Advocacy Project of Vermont Legal Aid was focused on only doing home health
cases." (Doc. 64 at 3.) In light of that clarification, it appears that Schlipf's affidavit supports
the conclusion that there are at least 40 members in the proposed class. It may be that some of
the 107 individuals' claims were not for home health services. But the exclusion of those claims
is more than offset by the fact that Vermont's total Medicare population is only about 2% of the

8

Medicare population within the region covered by the class (New England plus New York). (See
Doc. 13-1 at 20i
Of course, as the Second Circuit has observed:
[T]he numerosity inquiry is not strictly mathematical but must take into account
the context of the particular case, in particular whether a class is superior to
joinder based on other relevant factors including: (i) judicial economy,
(ii) geographic dispersion, (iii) the financial resources of class members, (iv) their
ability to sue separately, and (v) requests for injunctive relief that would involve
future class members.
Pa. Pub. Sch. Emps. Ret. Sys., 772 F.3d at 120 (citing Robidoux v. Celani, 987 F.2d 931,936

(2d Cir. 1993)). These factors support the conclusion that joinder of all members is
impracticable. Judicial economy would be favored by a single action focusing on the Prior
Favorable Homebound policy. Potential plaintiffs are distributed throughout New England and
New York, and are by definition elderly and disabled. Many potential plaintiffs may lack
substantial financial resources, and would be unlikely to be able to sue separately.7 Finally, the
court notes that the Secretary does not explicitly challenge the element of numerosity. For all
these reasons, the court concludes that Plaintiffs have met their burden of establishing
numerosity.
B.

Commonality and Typicality

"The commonality requirement is met if there is a common question of law or fact shared
by the class." Brown v. Kelly, 609 F.3d 467,475 (2d Cir. 2010). Reciting common "questions"
is not sufficient to establish commonality; instead the plaintiff must "demonstrate that the class
members 'have suffered the same injury.'" Wal-Mart Stores, Inc. v. Dukes, 131 S. Ct. 2541,

The Secretary offers her own analysis of the number of potential claimants, ultimately
concluding that there are at least 131 and as many as 458 with live appeals involving claims that
accrued between January 1, 2010 and July 2,2015. (See Doc. 60 at 2--4.) The Secretary notes
that some of those claimants are providers and Medicaid state agencies rather than individuals.
(Id. at 4.) Since the proposed class is limited to "beneficiaries," the number of class members is
smaller. However, the Secretary does not describe what portion of the potential claims it
identified belong to providers and state agencies, so the court cannot conclude that the Secretary
has shown that the number of potential claimants is less than 40.
6

7 As the above discussion regarding the closing of the class suggests, the pool of
prospective plaintiffs is not fluctuating or growing to involve future class members.
Nevertheless, joinder is impracticable in light of the presumption based on the size of the class
and for the other reasons discussed above.
9

2551 (2011) (quoting Gen. Tel. Co. ofSw. v. Falcon, 457 U.S. 147, 157 (1982)). The plaintiffs'
"claims must depend upon a common contention" that is "of such a nature that it is capable of
classwide resolution-which means that determination of its truth or falsity will resolve an issue
that is central to the validity of each one ofthe claims in one stroke." Id. Put another way:
"What matters to class certification ... is not the raising of common 'questions'-even in
droves-but, rather the capacity of a classwide proceeding to generate common answers apt to
drive the resolution ofthe litigation." Id. (omission in original) (quoting Richard A. Nagareda,
Class Certification in the Age ofAggregate Proof, 84 N.Y.U. L. Rev. 97,132 (2009)).
"Typicality requires that the claims or defenses of the class representatives be typical of
the claims or defenses ofthe class members." Brown, 609 F.3d at 475. "This requirement 'is
satisfied when each class member's claim arises from the same course of events, and each class
member makes similar legal arguments to prove the defendant's liability. '" Id. (quoting Marisol
A. v. Giuliani, 126 F.3d 372,376 (2d Cir. 1997)). "When it is alleged that the same unlawful
conduct was directed at or affected both the named plaintiff and the class sought to be
represented, the typicality requirement is usually met irrespective of minor variations in the fact
patterns underlying individual claims." Robidoux, 987 F.2d at 936-37. "The commonality and
typicality requirements often 'tend to merge into one another, so that similar considerations
animate analysis' of both." Brown, 609 F.3d at 475 (quoting Marisol A., 126 F.3d at 376).
The parties' core dispute regarding class certification is whether Plaintiffs have met the
commonality and typicality requirements. The Secretary maintains that Plaintiffs cannot meet
those requirements because each determination of whether a beneficiary is confined to the home
is a "fact-bound, beneficiary-specific determination." (Doc. 24 at 11.) The Secretary contends
that the only common question oflaw or fact is the alleged failure to apply the "great weight"
language of the MPIM, and that is a beneficiary-specific question because the "great weight"
standard is not dispositive. (Doc. 24 at 12, 14.) According to the Secretary, ordering application
ofthe "great weight" standard to every appeal covered by the class definition would not generate
any common answers apt to drive the resolution of the litigation. Instead, the Secretary asserts
that "[r]egardless of whether the ... standard is applied, each class member's claim that he or
she is entitled to Medicare coverage for home health-care services will turn on a host of case­
specific facts, requiring individualized determinations, and so will not present common or typical
issues for purposes of Rule 23(a)." (Id. at 14.)
10

Plaintiffs assert they do not challenge the outcome of any particular case, but instead
challenge the process used to review home health claims following a prior favorable Medicare
appellate decision. (Doc. 34 at 3; id. at 4 ("[T]he central, common issue presented by this
litigation is the process the Secretary utilizes to review and adjudicate Medicare claims.").)
Plaintiffs insist that the class members have the "same injury" in that "they all share a review
process for Medicare coverage of home health services which fails to follow the procedure and
criteria required for review of claims for beneficiaries who received a prior determination by
Medicare that he or she was confined to home." (Doc. 34 at 3--4.) Plaintiffs further contend that
their claim is capable of a classwide resolution, in that they request "that the Secretary be
ordered to stop ignoring the procedure and criteria that must be followed when Medicare reviews
home health coverage claims for beneficiaries previously found homebound." (Id. at 5.)
The court concludes that the class members have suffered the same injury, and that the
claims of the class representatives are typical of the class members' claims. The injury that the
class members have each suffered is that they were deprived of the benefit of the Prior Favorable
Homebound policy in the course of the administrative claims review process. It is true that the
"great weight" standard is not necessarily dispositive of any particular Medicare claim. But each
class member was entitled to the benefit of the "great weight" standard-either directly at the
determination stage or in the administrative appeals process insofar as QICs, ALJs, and the
Medicare Appeals Council were required to give "substantial deference" to that standard and
were required to explain their reasons for declining to follow it.
Application of that standard may make no difference to the outcome in some claims, but
failure to apply that standard is nonetheless a sufficient injury and was suffered by all class
members. See De La Rosa v. Holder, 598 F.3d 103, 108 (2d Cir. 2010) (improper standard of
review is the type of error that requires remand). 8 As this court previously stated, the Prior
Favorable Homebound policy "is not merely procedural-it directly affects plaintiffs' rights to
receive insurance benefits for home health care services." (Doc. 44 at 17.) Resolution ofthis
Use ofthe improper standard does not require remand "if it would be pointless or futile,
such as where there is an alternative and sufficient basis for the result, the error is tangential to
non-erroneous reasoning, or the overwhelming evidence makes the same decision inevitable."
Id. Here, it is impossible to perform that futility analysis at the present level of abstraction. The
court nevertheless concludes that the commonality and typicality elements are met because all
class members share the same basic injury arising from the same failure to apply the Prior
Favorable Homebound policy.
8

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litigation will not resolve each individual class member's claim for Medicare home health care,
but it will resolve all class members' challenges to the process employed for resolving those
individual claims.
C.

Adequacy of Representation

"The adequacy requirement is that 'the representative parties will fairly and adequately
protect the interests ofthe class.'" Brown, 609 F.3d at 475 (quoting Fed. R. Civ. P. 23(a)(4)).
"Adequacy 'entails inquiry as to whether: 1) plaintiff's interests are antagonistic to the interest of
other members of the class and 2) plaintiffs attorneys are qualified, experienced and able to
conduct the litigation.'" In re Flag Telecom Holdings, Ltd. Sec. Litig., 574 F.3d 29,35 (2d Cir.
2009) (quotingBtiffa v. Donaldson, Lufkin & Jenrette Sec. Corp., 222 F.3d 52,60 (2d Cir.

2000)). "In order to defeat a motion for certification, however, the conflict 'must be
fundamental. '" Id. (quoting In re Visa Check/MasterMoney Antitrust Litig., 280 F.3d 124, 145
(2d Cir. 2001)).
Here there is no dispute as to the qualifications, experience, and ability of Plaintiffs'
attorneys. The Secretary contends, however, that Plaintiffs Ryan and Herbert cannot fairly and
adequately protect the interests ofthe class because they are "dual eligible" beneficiaries, while
some other class members might not be. (Doc. 24 at 17.) As the court previously noted, where
Medicare rejects a claim brought by a "dual eligible" recipient like Ryan or Herbert, Medicaid
reimburses them so that they are not personally liable for the cost of the home health care. (See
Doc. 44 at 3.) Individuals who are not "dual eligible" may be personally financially liable if
Medicare rejects their claims. The Secretary therefore contends that "at least one class
representative should have a claim typical of that group of class members who have a direct
interest in the outcome ofthe proceedings." (Doc. 24 at 17.)
The court concludes that Ryan and Herbert's interests are not fundamentally antagonistic
to the interests of other members of the class. On the issue this litigation presents, the court sees
no conflict between the interests of those claimants who are "dual eligible" and those who are
not. This case is different than Amchem Prods., Inc. v. Windsor, 521 U.S. 591 (1997), where the
representative parties had an interest in immediate payments while other class members had a
competing interest in payments over time. Plaintiffs here do not seek damages at all. Thus, In re
Literary Works in Electronic Databases Copyright Litigation is also distinguishable; there was a

fundamental conflict in that case because the named plaintiffs had no incentive to maximize the
12

recovery for another category of plaintiffs. 654 F.3d 242, 254 (2d Cir. 2011). Neither is this
case like Brown v. Kelly, where the class representatives had little incentive to oppose or defend
against injunctive relief because they were already subject to court orders on the matter at issue.
609 F.3d at 480.
Even if Ryan and Herbert may not have precisely the same financial interest as class
members who are not "dual eligible," this is not a case where their incentives are so weak that
there is a fundamental conflict. As the court previously concluded in discussing their
constitutional standing, Ryan and Herbert have robust interests in pursuing this litigation. They
are seeking to protect a right which is theirs under the Medicare statute. They may face personal
liability for future uncovered services. Ryan faces the possibility that Medicaid will seek to
recover benefits from her estate after death. And both Herbert and Ryan have identified other
areas where Medicare and Medicaid do not provide identical benefits. (See Doc. 44 at 7-8.)

D.

Type of Class Action-Rule 23(b)(2)

Under Rule 23(b)(2), "[a] class action may be maintained if Rule 23(a) is satisfied and
if ... the party opposing the class has acted or refused to act on grounds that apply generally to
the class, so that final injunctive relief or corresponding declaratory relief is appropriate
respecting the class as a whole." "[C]ertification of a class for injunctive relief is only
appropriate where 'a single injunction ... would provide reliefto each member ofthe class. '"

Sykes v. Mel S. Harris & Assocs. LLC, 780 F.3d 70,80 (2d Cir. 2015) (omission in original)
(quoting Dukes, 131 S. Ct. at 2557). Plaintiffs assert that they meet Rule 23(b)(2)'s standard
because they seek injunctive relief to remedy the Secretary's failure to follow her own
regulations and guidance governing appeals of Medicare coverage for beneficiaries with a prior
favorable homebound determination. (See Doc. 13-1 at 28.) The Secretary maintains that
certification under Rule 23(b)(2) is inappropriate, but offers no reasons other than those
advanced in opposition to the commonality and typicality elements. (See Doc. 24 at 16.) The
court rejects those arguments for the reasons described above, and concludes that class
certification under Rule 23(b)(2) is appropriate.

Conclusion
For the reasons stated above, Plaintiffs' Motion to CertifY a Regional Class (Doc. 13) is
GRANTED. The action is certified as a class action under Fed. R. Civ. P. 23(a) and 23(b)(2) on
behalf of all beneficiaries of Medicare Parts A or B, in Connecticut, Maine, Massachusetts, New
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Hampshire, New York, Rhode Island, and Vermont (Medicare Administrative Contractor
Jurisdiction K) who (a) have received Medicare coverage for home health nursing or therapy
services on the basis of a "favorable final appellate decision" and (b) who have subsequently
been denied, or will be denied, coverage for additional services on the basis of not being
homebound, on or after January 1, 2010. Absent a particularized individual basis for tolling, the
class is limited to claimants who satisfied 42 U.S.C. § 405(g)'s 60-day filing requirement as of
March 5, 2015. The class is closed such that it does not include individuals who filed new
claims for Medicare benefits on or after August 3, 2015.
Plaintiffs' counsel are appointed class counsel under Fed. R. Civ. P. 23(g).
Dated at Rutland, in the District of Vermont, this

\,7 day of January, 2016.

Geoffrey W. Crawford, Judge
United States District Court

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