Whitcomb v. United Healthcare of Wisconsin/Secure Horizons
Filing
66
ORDER signed by Magistrate Judge William E Duffin. IT IS THEREFORE ORDERED that plaintiff's motion for attorneys' fees under the Equal Access to Justice Act is denied. (cc: all counsel) (asc)
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF WISCONSIN
JILL A. WHITCOMB,
Plaintiff,
v.
Case No. 13-CV-990
SYLVIA MATHEWS BURWELL,
Defendant.
ORDER
On May 26, 2015, this court concluded that the final decision of the Secretary of
Health and Human Services, defendant Sylvia Mathews Burwell, denying coverage for
a continuous glucose monitor for plaintiff Jill A. Whitcomb was based upon an error of
law. Whitcomb v. Burwell, 2015 U.S. Dist. LEXIS 67802 (E.D. Wis. May 26, 2015).
Specifically, the court concluded that the Secretary, through the Medicare Appeals
Council, erred when it concluded that Article A47238 was incorporated into Local
Coverage Determination (LCD) L27231. Id. at 8. The court remanded the matter
pursuant to Sentence Four of 42 U.S.C. § 405(g) for review of Whitcomb’s claim under
the proper legal standard.
The matter is now back before the court on Whitcomb’s motion for fees under the
Equal Access to Justice Act (EAJA). Any party, as defined under 28 U.S.C.
§ 2412(d)(2)(B), who prevails in an action against the United States is entitled to recover
the attorneys’ fees she incurred as a result of the action “unless the court finds that the
position of the United States was substantially justified or that special circumstances
make an award unjust.” 28 U.S.C. § 2412(d)(1)(A). The purpose of the EAJA is threefold:
(1) to encourage private litigants to pursue their administrative and civil
actions against the government and not be deterred by the prospect of
having to absorb the cost of their own attorneys’ fees; (2) to compensate
parties for the cost of defending against unreasonable government action;
and (3) to deter the federal government from prosecuting or defending
cases in which its position is not substantially justified.
Berman v. Schweiker, 713 F.2d 1290, 1297 (7th Cir. 1983).
“The ‘EAJA is not an automatic fee-shifting statute in favor of litigants who
prevail against the government.’” Potdar v. Holder, 585 F.3d 317, 319 (7th Cir. 2009)
(quoting Zapon v. United States Dep't of Justice, 53 F.3d 283, 284 (9th Cir. 1995)). “The
outcome of a case is not conclusive evidence of the justification for the government’s
position.” Id. (quoting United States v. Hallmark Const. Co., 200 F.3d 1076, 1079 (7th Cir.
2000)). Thus, the court does not award fees under the EAJA merely because the
government lost the case. See Pierce v. Underwood, 487 U.S. 552, 566 n.2 (1988).
The Secretary opposes Whitcomb’s request for attorneys’ fees on the basis that
the Secretary’s position was “substantially justified.” “While the EAJA does not define
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‘substantially justified,’ the Court has held that the phrase means a position that is
‘justified in substance or in the main.’” Krecioch v. United States, 316 F.3d 684, 688-89 (7th
Cir. 2003) (quoting Pierce v. Underwood, 487 U.S. 552, 565 (1988)). The Court of Appeals
for the Seventh Circuit explained further, stating:
A position is substantially justified if it has a reasonable basis in law and
fact. The government has the burden of establishing that its position was
substantially justified, and to do so must show: (1) a reasonable basis in
truth for the facts alleged; (2) a reasonable basis in law for the theory
propounded; and (3) a reasonable connection between the facts alleged
and the theory propounded.
Conrad v. Barnhart, 434 F.3d 987, 990 (7th Cir. 2006).
“[U]ncertainty in the law arising from conflicting authority or the novelty of the
question weighs in the government’s favor when analyzing the reasonableness of the
government’s litigation position.” Potdar, 585 F.3d at 320 (quoting Marcus v. Shalala, 17
F.3d 1033, 1037 (7th Cir. 1994)). But the government’s position is not inherently
substantially justified merely because the underlying issue is novel. Keasler v. United
States, 766 F.2d 1227, 1234 (8th Cir. 1985). The absence of precedent squarely addressing
an issue could itself be evidence of the lack of justification for the government’s
position; it might suggest that the question was so clear that it had been unnecessary to
previously litigate.
The issue before the court on Whitcomb’s appeal was whether the Secretary
complied with the law when it concluded that a continuous glucose monitor (CGM) is
not covered by Medicare. On that issue, National Coverage Determination (NCD) 40.2
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and Local Coverage Determination L47238 both address glucose monitors covered by
Medicare. As the court pointed out in its Decision and Order, neither refer to CGMs and
both pretty plainly are directed at glucose monitors that test blood samples produced
on reagent strips—which is not how CGMs work. (ECF No. 51 at 7.) But the fact that
NCD 40.2 and LCD L47238 make no mention of CGMs does not necessarily mean that
CGMs are not covered by Medicare.
To support the conclusion that CGMs are not covered by Medicare, the Medicare
Appeals Council, whose final decision was that of the Secretary, pointed to Local
Coverage Article A47238, which states clearly that CGMs are not covered. Finding that
Article A47238 was incorporated into LCD L47238, the Secretary concluded that CGMs
are not covered by Medicare. It was this conclusion which the court in its Decision and
Order found was in error, with the court finding that Articles are not to be read for
coverage determinations.
The court finds that the Secretary’s position, although ultimately unsuccessful,
was substantially justified. Articles and LCDs share a common history as Local Medical
Review Policies (LMRPs), Whitcomb, 2015 U.S. Dist. LEXIS 67802, 3. When an NCD and
an LCD state a specific type of equipment is covered but are silent as to a different type
of equipment used for a similar purpose, it was not unreasonable to argue that clear
language in a related Article ought to be used to fill in the gap and assist in the coverage
determination. It was only by comparing the availability of review for an LCD with the
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absence of any such review of an Article that the court concluded that looking to
Articles for coverage determinations would undermine Section 522 of BIPA. Id. at 8-9.
Nor does the court find persuasive Whitcomb’s argument that “the ALJ’s
decision put the government on notice that its reliance on an Article rather than NCDs
and LCDs was unreasonable.” (ECF No. 53 at 6.) The ALJ’s rationale was quite distinct
from the court’s and was, in certain respects, incorrect. At no point in his decision did
the ALJ state that Articles cannot be used to determine whether particular equipment is
covered by Medicare. Rather, after quoting the relevant portion of Article A47238, the
ALJ moved onto a discussion of the law governing LCDs, noting that LCDs are entitled
to substantial deference, although they can be disregarded if the ALJ provides specific
reasons for not following them. He then continued, “The undersigned ALJ declines to
follow Local Coverage Article A47238.” (ECF No. 18 at 52.) Read together, it appears
that the ALJ incorrectly accepted that coverage language may be properly included in
an Article and that an ALJ may decline to follow coverage language in an Article in the
same way he can disregard an LCD. (ECF No. 18 at 52-53.)
Similarly, the court does not find that other non-precedential decisions of two
other ALJs (see ECF No. 53 at 6-7) or other administrative actions (ECF No. 53 at 7)
suggest that the Secretary’s position in this litigation was not substantially justified.
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Therefore, because the Secretary’s position in this matter was substantially
justified, the court must conclude that Whitcomb is not entitled to attorneys’ fees under
the EAJA.
IT IS THEREFORE ORDERED that plaintiff’s motion for attorneys’ fees under
the Equal Access to Justice Act is denied.
Dated at Milwaukee, Wisconsin this 9th day of September, 2015.
_________________________
WILLIAM E. DUFFIN
U.S. Magistrate Judge
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