Teneyck v. State Farm Mutual Automobile Insurance Company et al

MOTION to Dismiss for Lack of Subject Matter Jurisdiction

N.D.N.Y.July 29, 2016

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK RONALD R. TENEYCK, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, BLUE SHIELD OF NORTHEASTERN NEW YORK and THE UNITED STATES OF AMERICA CENTER FOR MEDICARE AND MEDICAID SERVICES Defendants. Civil Action No. 16-CV-57373(LEK/ATB) NOTICE OF MOTION MOTION BY: United States of America DATE, TIME AND PLACE: *ON SUBMIT* September 2, 2016 at 9:30a.m. Honorable Lawrence E. Kahn; James T. Foley U.S. Courthouse Albany, New York SUPPORTING PAPERS: Memorandum of Law In Support of Motion to Dismiss; Declaration of Victoria Abril with Ex. "A" RELIEF SOUGHT: Dismissal of Complaint Pursuant to Fed. R. Civ. P. 12(b)(l) PAPERS IN OPPOSITION: To be served pursuant to L.R. 7.1 Dated: July 29,2016 RICHARDS. HARTUNIAN United States Attorney ?~ By: s/Charles E. Roberts CHARLES E. ROBERTS Assistant United States Attorney Bar Roll No. 102454 Case 6:16-cv-00573-LEK-ATB Document 23 Filed 07/29/16 Page 1 of 1 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK RONALD R. TENEYCK, Plaintiff~ V. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, BLUE SHIELD OF NORTHEASTERN NEW YORK and THE UNITED STATES OF AMERICA CENTER FOR MEDICARE AND MEDICAID SERVICES Defendants. Civil Action No. 16-CV-573 (LEK/ATB) MEMORANDUM OF LAW IN SUPPORT OF MOTION TO DISMISS BY DEFENDANT THE UNITED STATES OF AMERICA CENTER FOR MEDICARE AND MEDICAID SERVICES Dated: July 29, 2016 By.: Charles E. Roberts Assistant United States Attorney Bar Roll No. 102454 RICHARD S. HARTUNIAN United States Attorney Northern District ofNew York 100 South Clinton Street Syracuse, New York 13261 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 1 of 17 TABLE OF CONTENTS INTRODUCTION ..................................................................................................................... 1 BACKGROUND to relevant Medicare act provisions .............................................................. 2 A. The Medicare Secondary Payer ("MSP") Statute .................................................... 2 B. The MSP Administrative Review Process ............................................................... 5 FACTUAL BACKGROUND .................................................................................................... 6 ARGUMENT ............................................................................................................................. ? I. THE COURT MUST DISMISS THE COMPLAINT BECAUSE IT IS NOT RIPE FOR REVIEW .................................................................................................................................... 7 II. THE COURT MUST DISMISS THE COMPLAINT BECAUSE THE GOVERNMENT HAS NOT WAIVED ITS SOVEREIGN IMMUNITY WHERE PLAINTIFF HAS NOT PRESENTED HIS CLAIM TO CMS OR EXHAUSTED ADMINISTRATIVE REMEDIES ............................................................................................................................. IO CONCLUSION ....................................................................................................................... 14 11 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 2 of 17 INTRODUCTION Plaintiff has filed a Complaint that alleges he was injured in an auto accident and has a settlement pending for his damages. Plaintiff receives Medicare. 1 Medicare paid approximately $8,599.92 ofhis medical bills related to the accident. Medicare then sent plaintiff a "Conditional Payment Letter" which stated that Medicare had a right to be reimbursed these payments, from any personal injury settlement that he might obtain. The conditional letter stated that "as of this time" and "based upon the available information," Medicare had identified $8,599.92 in "conditional" payments that it "believed" were associated with plaintiffs personal injury case. The letter stated that Medicare is "still investigating this case file to obtain any other outstanding Medicare conditional payments; therefore, the enclosed listing of current conditional payments is not final." (emphasis added). 2 The preliminary nature of the estimate was ref1ected in both the heading and body of the letter: the heading stated, in bold capital letters, "THIS IS NOT A BILL. DO NOT SEND PAYMENT AT THIS TIME." (emphasis in original). The letter's body specifically asked plaintiff and his attorney to "refrain from sending any monies to Medicare" until after he settled his personal injury case, to "eliminate underpayments [or] overpayments." Notwithstanding the foregoing, plaintiff has tiled a Complaint which alleges that Medicare "has and continues to assert" a lien against his expected personal injury recovery. In fact Medicare has only sent him a preliminary and conditional letter, subject to a final calculation of payments, which explicitly is "not final" and which in no sense is a lien. Plaintiff has jumped 1 The plaintitTis Ronald Teneyck. He has named ''The United States of America Center for Medicare and Medicaid Services" as a defendant. Medicare is a federal health care program administered by the Center for Medicare and Medicaid Services (CMS); and CMS in tum is part of the U.S. Department of Health and Human Services (HHS). CMS "is the real party of interest in any litigation involving the administration of the [Medicare] program" and intermediaries, as here. 42 C.F.R. § 421.5(b). 2 Plaintiff was invited to send additional documentation and an explanation if he disagreed with the preliminary estimate of$8,599.92. Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 3 of 17 the gun. This case is not yet ripe for adjudication, and just as fundamentally, plaintiff has not completed or even started to exhaust his administrative remedies, because there is not yet any final calculation of payments. In light ofthe foregoing, CMS moves to dismiss the Complaint pursuant to Fed.R.Civ.P. 12(b)(l) because the court lacks subject matter jurisdiction: there is no final payment or demand, this action is not yet ripe for adjudication, the plaintiff has failed to exhaust or even begin his administrative remedies, and the United States has not waived sovereign immunity in these circumstances. BACKGROUND TO RELEVANT MEDICARE ACT PROVISIONS Because Plaintiffs claims arise in the context of Medicare payments, certain relevant provisions of the Medicare Act provide an important lens through which to view the Complaint. A. The Medicare Secondary Payer ("MSP") Statute Medicare, the federal medical insurance program tor the aged and disabled, is governed by Title XVIII of the Social Security Act, 42 U .S.C. §§ 1395-1395ggg (the "Medicare Act"). Part A of the Medicare program is a hospital insurance program covering certain inpatient care at facilities such as hospitals and skilled nursing facilities, as well as hospice care and some home health care. See 42 U.S.C. §§ 1395c-1395i-5. Part B of the Medicare program is a voluntary supplemental insurance program covering certain outpatient services such as physician services. See 42 U.S.C. §§ 1395j-1395w-4. CMS is responsible for the administration of the Medicare program. (See Declaration of Victoria Abril ("Abril Dec.") at ~ 2). CMS contracts with private entities to assist it in administering the Medicare program, including making "[ d]eterminations as to whether payment[ s] should not be, or should not have been, made under" the MSP statute and the recovery of such payments. See 42 U.S.C. § 1395ddd(b)(3). CMS has contracted with the 2 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 4 of 17 Benefits Coordination & Recovery Center ("BCRC") to administer the determination and recovery of Part A and Part B MSP overpayments. (See Abril Dec. at~ 3). Under the MSP statute, Medicare is considered to be the secondary payer to a primary plan, which includes a group health plan, a workmen's compensation law or plan, "an automobile or liability insurance policy or plan (including a self-insured plan)," or no fault insurance. 42 U.S.C. § 1395y(b)(2)(A) and (B). If a primary plan "has not made or cannot reasonably be expected to make payment with respect to [an] item or service promptly" as determined by the regulations, Medicare may make payment for the item or service, conditioned upon reimbursement to Medicare in accordance with the provisions of the MSP statute. 42 U.S.C. § 1395y(b )(2)(B)(i). "[A] primary plan, and an entity that receives payment from a pnmary plan, shall reimburse [Medicare] ... if it is demonstrated that such primary plan has or had a responsibility to make payment" for an item or service. 42 U.S.C. § 1395y(b)(2)(B)(ii). "A primary plan's responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient's compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan's insured, or by other means." !d.; see also 42 C.F.R. § 411.22(b) (same). Thus, an alleged tortfeasor's payment, including those pursuant to a settlement or release, demonstrates the tortfeasor's responsibility to pay (a "Triggering Event"), and triggers Medicare's right of recovery under the MSP statute. See Hadden v. United States, 661 F.3d 298, 301 (6th Cir. 2011) (noting as uncontested that a tortfeasor's settlement payment "gives rise to an obligation ... to reimburse Medicare"); see also Fanning v. United States, 346 F.3d 386, 391 (3d Cir. 2003) (noting that "when another insurer makes a payment for medical services Medicare 3 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 5 of 17 has already paid for, a duplicate payment results," and that "the MSP [statute] allows the Secretary to obtain reimbursement of the overpayment"). Prior to a Triggering Event, CMS will send a "Conditional Payment Letter," which notifies a beneficiary that Medicare made a payment for items or services that, under the MSP statute, is conditioned upon reimbursement if there is a Triggering Event. See Conditional Payment Information, Centers for Medicare & Medicaid Services (2015), http://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Attomey- Services/Conditional-Payment-Information/Conditional-Payment-Information.html. The payment amount identified in the Conditional Payment Letter is interim, as Medicare may make additional conditional payments. See id.; (see also Abril Dec. Ex. A). When a Triggering Event occurs, the BCRC calculates Medicare's Part A and/or Part B MSP recovery claim and issues an initial determination identifying the MSP recovery claim against a provider, supplier, or beneficiary for services or items for which Medicare already paid. See 42 C.F.R. § 405.924(b)(14); Penoyer v. United States, No. 03-CV-115, 2004 WL 437461, at *3 (N.D.N. Y. Feb. 3, 2004) (noting CMS's determination that there is an overpayment claim under the MSP statute is an "initial determination" and "Congress has also carved out a statutory right to a reconsideration, hearing and judicial review regarding any initial determination with which a beneficiary is dissatisfied"). B. The MSP Administrative Review Process The Medicare Act authorizes the Secretary to make determinations regarding a Medicare beneficiary's entitlement to benefits under the Act, as well as a beneficiary's obligation to reimburse the Medicare program under the MSP statute. See 42 U.S.C. § 1395ff(a) ("The Secretary shall promulgate regulations and make initial determinations with respect to benefits under part A or part B [ofthe Medicare program] in accordance with those regulations."). Initial 4 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 6 of 17 determinations with respect to Part A or Part B claims include determinations that "a particular claim is not payable by Medicare" under the MSP statute and that, under the MSP statute, "Medicare has a recovery claim against a provider, supplier, or beneficiary for services or items that were already paid by the Medicare program .... " 42 C.F.R. §§ 405.924(b)(13) and (14). 3 Following a Triggering Event, the BCRC issues an initial determination identifying Medicare's MSP recovery claim. See 42 C.F.R. § 405.924(b)(14). A beneficiary dissatisfied with the initial determination regarding an overpayment may request a redetermination. See 42 C.F.R. §§ 405.940-958. A beneficiary dissatisfied with the redetermination may seek reconsideration by an independent entity contracted by CMS known as a Qualified Independent Contractor ("QIC"). See 42 C.F.R. §§ 405.960-978. A dissatisfied beneficiary may then request a hearing before an Administrative Law Judge ("ALJ"), and review of an unfavorable ALJ decision before the Medicare Appeals Council, subject to the amount in controversy and timeliness requirements. See 42 C.F.R. §§ 405.1000-1054, 405.1100-1140. To seek an appeal or waiver of an initial determination as to the MSP recovery claim, an individual must submit a letter to BCRC setting forth his basis for the appeal or waiver. (Abril Dec. at~ 9). A beneficiary may seek judicial review ofthe Secretary's "final decision," as provided in 42 U.S.C. § 405(g), by filing an action in federal district court. 42 U.S.C. § 1395ff(b)(1 )(A); see also 42 C.F.R. § 405.1136. Obtaining a "final decision" from the Secretary is the sole avenue for judicial review of claims relating to Medicare overpayment determinations. See 42 U.S.C. §§ 1395fi(b)(l) and 1395ii (incorporating 42 U.S.C. §§ 405(g) and (h) into the Medicare Act); 3 The Medicare Act authorizes the Secretary to waive adjustment or recovery of a Medicare overpayment "in any case where the incorrect payment has been made ... with respect to an individual who is without fault ... if such [recovery] would defeat the purposes of[ the Medicare Act] or would be against equity and good conscience." 42 U.S.C. § 1395gg(c). A determination as to whether a waiver is appropriate is an appealable initial determination. See 42 C.F.R. §§ 405.355, 405.924(b)(12)(ii). 5 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 7 of 17 Heckler v. Ringer, 466 U.S. 602, 605 (1984) ("Judicial review of claims arising under the .. Medicare Act is available only after the Secretary renders a 'final decision' on the claim .... "). FACTUAL BACKGROUND Plaintiff alleges that on or about July 21, 2013, he was involved in an automobile accident and sustained injuries as a result. (See Dkt. No. 1 at 3). Plaintiffs Complaint asserts that Defendant State Farm should pay for the medical treatment that Plaintiff incurred. (!d. at 6). Specifically, Plaintiff argues "CMS is entitled to a lien against the plaintiffs personal injury recovery ... but any such bills are the responsibility and obligation of the defendant State Farm as the no-fault insurance carrier." (!d.). Plaintiff claims that this Court has federal question jurisdiction pursuant to 28 U.S.C. § 1331. (!d. at 2). By letter dated April 21, 2016, CMS sent Plaintiff a Conditional Payment Letter ("CPL") identifying Medicare conditional payments in the amount of $8,599.92 associated with the incident of July 21, 2013; Plaintiff's attorney was also copied on this correspondence. (See Abril Dec.at ~ 5, Ex. A). The letter attached a "Payment Summary Form" identifying claims for services that Medicare paid for related to the injuries associated with the July 21, 2013 incident. (See Abril Dec. Ex. A). The Conditional Payment Letter also identified the amount of reimbursement that Medicare actually paid for the services. (See Abril Dec. Ex. A). The April 21, 2016, letter notes that CMS is still reviewing claims related to Plaintiffs case and that the conditional payment amount is not a final amount. (See Abril Dec. Ex. A). The Conditional Payment Letter does not demand payment, and it informs the beneficiary and his representative to refrain from making payments until there is a settlement, judgment, award, or other payment-a Triggering Event. (See Abril Dec. at~ 6, Ex. A). CMS has not issued an initial determination related to Medicare's potential recovery claim under the MSP statute for services or items already paid for by the Medicare program with 6 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 8 of 17 respect to the July 21, 2013, incident. (See Abril Dec. at ~ 8). CMS will not issue an initial determination unless and until it receives notice of a Triggering Event-that is, a settlement, judgment, award, or other payment made to Plaintiff with respect to the July 21, 2013, incident. (See Abril Dec. at~ 8). To dispute any initial determination, Plaintiff was required to simply submit a letter to BCRC that set forth the basis for his dispute. (See Abril Dec. at ~ 9). However, Plaintiff did not submit any such letter, and instead chose to initiate this action. (See Abril Dec. at~ 11). ARGUMENT This Court lacks subject matter jurisdiction over Plaintiff's unripe, unexhausted claim. Where a district court "lacks statutory or constitutional power to adjudicate" a claim, the claim must be dismissed pursuant to Rule 12(b)(l). Makarova v. United States, 201 F.3d 110, 113 (2d Cir. 2000). The burden lies on the plaintiff to "prov[e] by a preponderance of the evidence'' that subject matter jurisdiction exists. !d. On such a determination, the Court may refer to evidence outside of the pleadings. !d. (citing Kamen v. Am. Tel. & Tel. Co., 791 F.2d 1006, 1011 (2d Cir. 1986)). Here, the Court lacks subject matter jurisdiction because Plaintiff's claim is unripe for judicial review and the Secretary has not waived sovereign immunity where Plaintiff did not present any claim or exhaust the administrative remedies. I. THE COURT MUST DISMISS THE COMPLAINT BECAUSE IT IS NOT RIPE FOR REVIEW Article III, § 2, of the Constitution limits federal jurisdiction to "Cases" and "Controversies." Genesis HealthCare Corp. v. Symczyk, 133 S. Ct. 1523, 1528 (2013); see also DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 341 (2006) ("[N]o principle is more fundamental to the judiciary's proper role in our system of government than the constitutional limitation of 7 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 9 of 17 federal-court jurisdiction to actual cases or controversies."); Lujan v. Defenders of Wildlife, 504 u.s. 555, 559-60 (1992). To meet the "case-or-controversy" requirement under Article III, the plaintiff must establish standing. See Clapper v. Amnesty lnt 'l USA, 133 S. Ct. 1138, 1147 (2013) ("To establish Article III standing, an injury must be concrete, particularized, and actual or imminent; fairly traceable to the challenged action; and redressable by a favorable ruling." (internal quotation marks and citation omitted)). A claim is unripe if it rests on "contingent future events that may not occur as anticipated, or indeed may not occur at all." Texas v. United States, 523 U.S. 296, 300 (1998) (quoting Thomas v. Union Carbide Agric. Prods. Co., 473 U.S. 568, 580- 81 (1985)); see also Thomas v. City of New York, 143 F.3d 31, 34 (2d Cir. 1998) ("[W]hen resolution of an issue turns on whether there are nebulous future events so contingent in nature that there is no certainty they will ever occur, the case is not ripe for adjudication." (internal quotation marks omitted)). Before CMS can make a determination as to whether Plaintiff owes any sum under the MSP statute, a primary plan that "has or had a responsibility to make payment" with respect to an item or service must be demonstrated through "a judgment, a payment conditioned upon the recipient's compromise, waiver, or release ... of payment for items or services included in a claim against the primary plan or the primary plan's insured, or by other means." 42 U.S.C. § 1395y(b)(2)(B)(ii); see also Woods v. Empire Health Choice, Inc., 574 F.3d 92, 95 (2d Cir. 2009) (recognizing that, under the MSP statute, government is subrogated only "to the extent of payment made by Medicare but required to be paid by a primary plan" (internal editing marks omitted)); Gobrecht v. McGee, 249 F.R.D. 262, 263 (N.D. Ohio 2007) ("[T]he obligation for reimbursement does not arise unless and until there has been a recovery by a beneficiary .... "). 8 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 10 of 17 In this case, HHS is unaware of any settlement, judgment, award, or other payment that would trigger a Medicare recovery claim. Furthermore, even if there is a settlement, judgment, award, or other payment, CMS would have to ascertain the value of any recovery claim-something that has not yet been done. A recent opinion from the Eastern District of New York, Sexton v. Medicare, 2016 WL 3821547 (E.D.N.Y. July 11, 2016), found that a Plaintiff cannot refute or defeat Medicare's ability to recover conditional payments until the primary payer has demonstrated responsibility through a settlement, judgment or award. There, Plaintiff, upon receiving a CPL from Medicare, brought suit seeking to compel Medicare "to recover the funds from American Transit Ins. Co. or from the providers that Medicare knowingly paid by mistake instead of from [Plaintiff]." !d. at *2. The Court held that Plaintiffs claim was not ripe for judicial review because Plaintiff had not suffered an actual or imminent injury where Defendant's right to collect any purported Medicare overpayments from Plaintiff rested on contingent, future events that may not occur: Medicare may eventually determine that a primary insurer is responsible for covering medical expenses related to plaintiffs injuries. In that case, it may seek reimbursement against the primary insurer or, if plaintiff has received a payment, against plaintiff himself. See 42 U.S.C. § 1395y(b)(2)(B)(iii). If a primary insurer directly reimburses Medicare for all of the purported overpayments, Medicare would not seek repayment from plaintiff himself. Alternatively, Medicare may determine that there was no overpayment. As the above hypotheticals illustrate, plaintiffs alleged injury is purely conjectural. See [Connecticut v.] Am. Elec. Power Co., 582 F.3d [309,] 343 n.19 [(2d Cir. 2009)). Because he "alleges only a potential for [injury] that has not yet occurred and because that potential is born of nothing more than hypothesis and conjecture," plaintiff lacks standing to sue. Brito [v. Mukasey], 521 F.3d [160,] 168 [(2d Cir. 2008)). !d. at *4. As in Sexton, this court lacks subject matter jurisdiction over the Plaintiffs action because Plaintiff has not yet suffered an "actual or imminent" injury. Plaintiff therefore fails to satisfy the "case-or-controversy" requirement of Article III. 9 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 11 of 17 Plaintiffs Complaint, in essence, disputes the responsibility and obligations of the payments identified in the Conditional Payment Letter sent by CMS. (See Dkt. No. 1 at 6). However, Plaintiff has not suffered an actual or imminent injury by virtue of his receipt of the letter. The Conditional Payment Letter does not seek repayment from Plaintiff. (See Abril Dec. Ex. A,). Indeed, Medicare does not, at present, even have a recovery claim under the MSP statute because there has been no Triggering Event regarding payments made pursuant to injuries that Plaintiff sustained as a result ofthe July 21,2013, incident. As a result, Plaintiffs claim is not ripe for adjudication under Article III because it is "contingent [on] future events that may not occur as anticipated, or indeed may not occur at all." Because this case does not involve an "actual or imminent" injury, the Court should dismiss the action for lack of subject matter jurisdiction under Article III. II. THE COURT MUST DISMISS THE COMPLAINT BECAUSE THE GOVERNMENT HAS NOT WAIVED ITS SOVEREIGN IMMUNITY WHERE PLAINTIFF HAS NOT PRESENTED HIS CLAIM TO CMS OR EXHAUSTED ADMINISTRATIVE REMEDIES The Supreme Court has long held that "limitations and conditions upon which the Government consents to be sued must be strictly observed and exceptions thereto are not to be implied." Soriano v. United States, 352 U.S. 270, 276 (1957). The United States' sovereign immunity extends to "suits of every class." See United States v. Dry Dock Sav. Inst., 149 F .2d 917, 919 (2d Cir. 1945). The scope of the waiver of sovereign immunity, and any exceptions to the waiver, therefore, are to be strictly construed in favor of the government. Lane v. Pena, 518 U.S. 187, 192 (1996) . As a result, statutory waiver of sovereign immunity can only occur when the statutory text explicitly and unequivocally expresses such a waiver. Adeleke v. United States, 355 F.3d 144, 150 (2d Cir. 2004). A party suing the federal government bears the burden of establishing waiver of sovereign immunity. Makarova, 201 F.3d at 113. Absent a waiver of 10 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 12 of 17 sovereign immunity, the district court lacks subject matter jurisdiction over the claim. See, e.g., id.; Setlech v. United States, 816 F. Supp. 161, 165 (E.D.N.Y. 1993). A claim arises under the Medicare Act if the Act furnishes '"both the standing and the substantive basis for the presentation'" of the claim. Ringer, 466 U.S. at 615 (quoting Weinberger v. Salfi, 422 U.S. 749, 760-61 (1975)). Plaintiffs claim against CMS clearly "arises" under the Medicare statute; thus, the only applicable waiver of sovereign immunity is 42 U.S.C. § 405(g), as incorporated into the Medicare Act by 42 U.S.C. § 1395ff(b). See Bird v. Thompson, 315 F. Supp. 2d 369, 372-73 (S.D.N.Y. 2003) (holding that beneficiary's declaratory judgment action regarding the government's MSP claim "arises under" the Medicare Act); see also Buckner v. Heckler, 804 F.2d 258, 259-60 (4th Cir. 1986) (per curiam) (finding beneficiary's claim to overpayment relating to a Medicare conditional payment arose under Medicare Act). Section 405(g) provides that a plaintiff may only file a civil action in federal district court to review a "final decision of the [Secretary] made after a hearing to which he was a party." 42 U.S.C. § 405(g); see also Paul v. Astrue, 840 F. Supp. 2d 80, 82 (D.D.C. 2012) (recognizing § 405(g) provides a limited waiver of sovereign immunity), aff'd, 2012 WL 3791292 (D.C. Cir. Aug. 8, 2012). In addition, 42 U.S.C. § 405(h) states that "[n]o findings of fact or decision of the [Secretary] shall be reviewed by any person, tribunal, or governmental agency except as herein provided." 42 U.S.C. § 405(h). The statute further provides that "[n]o action ... shall be brought under section 1331 or 1346 of title 28 ... to recover on any claim arising under this" subchapter. !d. As a result, "42 U.S.C. § 405(h), made applicable to the Medicare Act by 42 U.S.C. § 1395ii, provides that § 405(g) ... is the sole avenue for judicial review for all claims arising under the Medicare Act." Ringer, 466 U.S. at 614-15 (citing Weinberger, 422 U.S. at 11 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 13 of 17 760-61) (internal quotation and editing marks omitted); see also Fox Ins. Co. v. Sebelius, 381 F. App'x 93, 97 (2d Cir. 201 0) (holding that plaintiff was "required[] to channel any appeal" through the appeals process); Fanning, 346 F.3d at 401-02 (same). In Shalala v. Illinois Council on Long Term Care, the Supreme Court held that§ 405(h) requires "the 'channeling' of virtually all legal attacks through the agency," whether they be "[c]laims for money, claims for other benefits, claims of program eligibility, [or] claims that contest a sanction or remedy," and whether the claims seek monetary payments or "involve the application, interpretation, or constitutionality of interrelated regulations or statutory provisions." 529 U.S. 1, 13-14 (2000). The only exception to the channeling requirements of § 405(h) would be in those cases where there is "no review at all." Fox, 381 F. App'x at 97 (citing Shalala, 529 U.S. at 19). Thus, Federal courts have unequivocally held that actions related to Medicare's MSP recovery claims, including complaints seeking an "accounting" of the amount of Medicare's recovery claim, or otherwise challenging Medicare's recovery rights under the MSP statute, "arise" under the Medicare Act-and the plaintiff must therefore first "channel" those claims through the administrative review process before a federal court may consider them. See, e.g., Buckner, 804 F.2d at 259-60 (holding plaintifi's declaratory judgment claim regarding overpayment that Medicare conditionally paid arose under the Medicare Act, thereby requiring exhaustion of administrative remedies pursuant to § 405(g), and the failure to do so warranted dismissal for lack of subject matter jurisdiction); Fanning, 346 F.3d at 399-400 (holding class- action claims alleging that Medicare was not entitled to recover MSP overpayments from a settlement fund created by an alleged tortfeasor arose under the Medicare Act). Under § 405(g), claimants must satisfy two conditions before they may seek judicial review: (1) the "nonwaivable" requirement that a claim for benefits be presented to the 12 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 14 of 17 Secretary; and (2) the required exhaustion of administrative review, which the Secretary or, in rare circumstances, a federal court may waive. See Nichole Med. Equip. & Supply, Inc. v. TriCenturion, Inc., 694 F.3d 340,349 (3d Cir. 2012) (quoting Cathedral RockofN. College Hill, Inc. v. Shalala, 223 F.3d 354, 359 (6th Cir. 2000), and Ringer, 466 U.S. at 617); Bird, 315 F. Supp. 2d at 372-73 (holding that 42 U.S.C. § 405(h) precluded 28 U.S.C. § 1331 jurisdiction over the beneficiary's declaratory judgment action regarding MSP claims, which arose under the Medicare Act). As a result, "an indispensable prerequisite for federal subject matter jurisdiction" is a final agency action, which, in this context, arises by the presentment of a claim to the Secretary and exhaustion of the HHS administrative procedure. Bird, 315 F. Supp. 2d at 3 71, 373-74; see also Buckner, 804 F.2d at 260 (dismissing beneficiary's action seeking declaration that Medicare not entitled to MSP insurance proceeds because beneficiary did not present claim to HHS); Wright v. Sebelius, 818 F. Supp. 2d 1153, 1160 (D. Neb. 2011) (finding beneficiary failed to satisfy nonwaivable presentment requirement where CMS would not issue a demand or recovery calculation letter until beneficiary resolved his liability claim, which had not occurred); Merrifield, et a!. v. United States, Civ. Action No. 07-987 (JBS), 2008 WL 906263, at * 14 (D.N.J. Mar. 31, 2008) (finding one named plaintiff failed to meet nonwaivable presentment prerequisite where she did not notify HHS that she objected to the recovery claim). Here, Plaintiffs claim arises under the Medicare Act because it seeks, in essence, a declaration regarding any recovery rights Medicare might have under the MSP statute. (See Dkt. No.1 at 6); see also Bird, 315 F. Supp. 2d at 372 ("[A] claim arises under the Medicare Act if the Medicare Act provides both standing and the substantive basis for the claim or if the claim is inextricably intertwined with a claim for medical benefits under the Medicare Act." (internal quotation marks omitted)). As a result, to establish this Court's jurisdiction through § 405(g), 13 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 15 of 17 Plaintiff must show that he both presented his claim to the Secretary and exhausted the available administrative remedies. He could have presented his claim by way of a letter to BCRC setting forth the basis for any dispute of a recovery claim. (See Abril Dec. at ~ 9). Plaintiff, however, neither presented a claim nor exhausted the available remedies. Because Plaintiff has not obtained any settlement, judgment, award, or other payment, there has been no Triggering Event, and CMS does not yet have a recovery claim under the MSP statute. As a result, CMS has not issued an initial determination indicating the amount of CMS's recovery claim and will not do so unless and until it receives notice that there has been a Triggering Event. (See Abril Dec. at ~ 8). Absent an initial determination, Plaintiff has not presented any claim to Medicare prior to this action and, thus, has not met the indispensable prerequisite requirement for this Court's jurisdiction. Also absent an initial determination, Plaintiff has not exhausted the HHS administrative procedures by submitting a letter to BCRC setting forth the basis for any dispute or request for waiver of the recovery claim. (See Abril Dec. at~ 11 ). Although Plaintiff has not yet done so, if and when there is a Triggering Event and an initial determination by CMS, Plaintiff would be able to present his claim and exhaust his administrative remedies by initiating an appeal or waiver request through a letter to BCRC. (See Abril Dec. at~ 9). Because Plaintiff has met neither the indispensable prerequisite of presentment nor the waivable requirement of exhaustion, CMS has not waived sovereign immunity in this action pursuant to § 405(g). Absent such a waiver, the Court lacks subject matter jurisdiction and must dismiss the Complaint. CONCLUSION For the foregoing reasons, CMS respectfully requests that this Court dismiss Plaintiffs complaint for lack of subject matter jurisdiction. 14 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 16 of 17 Dated: August 1, 2016 OF COUNSEL: Margaret M. Dotzel Acting General Counsel Joel Lerner Chief Counsel - Region II David Weiner Assistant Regional Counsel RICHARDS. HARTUNIAN United States Attorney ~ By: Is/Charles E. Roberts Charles E. Roberts Assistant United States Attorney Bar Roll No. 102454 U.S. Department of Health and Human Services Office of the General Counsel - Region II 26 Federal Plaza, Room 3908 New York, New York 10278 15 Case 6:16-cv-00573-LEK-ATB Document 23-1 Filed 07/29/16 Page 17 of 17 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK RONALD R. TENEYCK, Plaintiff, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, BLUE SHIELD OF NORTHEASTERN NEW YORK and THE UNITED STATES OF AMERICA CENTER FOR MEDICARE AND MEDICAID SERVICES Defendant. Civil Action No. 16-CV-573 DECLARATION OF VICTORIA ABRIL I, Victoria Abril, declare pursuant to 28 U.S.C. § 1746 as follows: 1. I am the Associate Regional Administrator of the Division of Financial Management and Fee for Service Operations, The Centers for Medicare & Medicaid Services ("CMS"), United States Department of Health and Human Services ("HHS") in Region II. In this position, I am responsible for, among other things, overseeing the recovery of overpayments under the Medicare Secondary Payer ("MSP") Act, 42 U.S.C. § 1395(y)(b )(2), in Region II. Region II covers New York, New Jersey, Puerto Rico, and the Virgin Islands. 2. CMS is responsible for the administration of the Medicare Program established under Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq. 1 Case 6:16-cv-00573-LEK-ATB Document 23-2 Filed 07/29/16 Page 1 of 4 3. CMS has contracted with the Benefits Coordination & Recovery Center ("BCRC") to administer the determination and recovery of Part A and Part B MSP overpayments. 4. The statements contained in this declaration are based on my personal knowledge, on information supplied to me by CMS staff or by the BCRC, or on records and information available to me in my official capacity. 5. My staff obtained documents from the BCRC concerning Medicare's payments on behalf of Medicare beneficiary Ronald R. Teneyck, as the result of an accident on or about July 21,2013. Among those documents was a letter from CMS to Mr. Teneyck and his representative dated April 21, 2016. That letter identified overpayments in the amount of $8,599.92 and is attached to this declaration as Exhibit A. 6. This document, known as a Conditional Payment Letter ("CPL"), requests that the beneficiary inform the BCRC if the beneficiary disagrees with the inclusion of any particular claim in the conditional payment amount. It does not demand payment, and specifically informs the beneficiary and his representative to refrain from making payments until notified of a settlement, judgment, award or other payment. It further states that CMS is still reviewing claims related to Mr. Teneyck's case, and that the conditional payment amount is not final. Medicare continues to make conditional payments until notified of a settlement, judgment, award or other payment. Consequently, the final conditional payment amount may differ from the initial conditional payment letter. 7. The amount identified in the CPL may not be the same as the final conditional payment amount, since CMS will generally take into the account the proportionate share of the costs of procuring the settlement, judgment, award, or other payment which are borne by the 2 Case 6:16-cv-00573-LEK-ATB Document 23-2 Filed 07/29/16 Page 2 of 4 beneficiary, unless CMS is required to bring suit because the beneficiary opposes CMS's recovery. There is also a cap on the overpayment amount when the conditional payment amount equals or exceeds the settlement, judgment, award, or other payment amount. See 42 C.F.R. § 411.37. 8. CMS has not yet issued an initial determination related to Medicare's recovery claim under the MSP Act for services or items already paid by the Medicare program with respect to the date of incident of July 21, 2013. CMS will not issue an initial determination until it receives notice that a settlement, judgment, award or other payment has been made to Mr. Teneyck related to the July 21,2013 date of incident. 9. Once an "initial determination" is made, the beneficiary will be entitled to administrative appeal rights (and, eventually, judicial appeal rights, assuming all other requirements under the statute and regulations are met). See 42 C.F.R. §§ 405.924; 405.940-958; 405.960-978; 405.100 et seq. An appeal or request for waiver of the initial determination can be made by way of letter to BCRC, setting forth the reasons why the individual disagrees with the initial determination or believes the recovery claim should be waived. 10. The Conditional Payment Letters sent to the beneficiary specifically state that Mr. Teneyck should refrain from sending any monies to Medicare prior to the submission of settlement information and receipt of a demand/recovery calculation letter. CMS has not sent any subsequent correspondences to Mr. Teneyck since the April 21, 2016 letter. No overpayment letter ("initial determination") has been issued to Mr. Teneyck identifying a MSP recovery claim that Mr. Teneyck owes the Medicare program. Unless and until there is a settlement, judgment, award or other payment demonstrating a primary payer's responsibility for 3 Case 6:16-cv-00573-LEK-ATB Document 23-2 Filed 07/29/16 Page 3 of 4 Medicare conditional payments made for items or services provided to Mr. Teneyck, CMS does not have a recovery claim under the MSP Act with respect to Mr. Teneyck' s liability claim. 11. A search has revealed that, other than the present action, Plaintiff did not submit any letter or other notification to BCRC and/or CMS that he sought to contest any recovery claim and/or sought a waiver of the recovery claim. In accordance with 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true and correct. Executed on: Jul~Z-;2016 New York, NY Victoria Abril Associate Regional Administrator Division of Financial Management and Fee for Service Operations The Centers for Medicare and Medicaid Services United States Department of Health & Human Services Region II 4 Case 6:16-cv-00573-LEK-ATB Document 23-2 Filed 07/29/16 Page 4 of 4 EXHIBIT A Case 6:16-cv-00573-LEK-ATB Document 23-3 Filed 07/29/16 Page 1 of 12 April 21, 2016 492 2 !v1B 0.960 *"'*MXED ADC 720 R492 T:6 P:36 PC:8 F:609602 RONALD R TENEYCK POBOX 311 FONDA, NY 12068-0311 11 11 11 11111 1 IIIJIJIJ 1l 111 ll 1ll•l I II I 11 lalallll'lll1 11 l111all 1111l Beneficiary Name: Medicare Number: Case Identification Number: Insurer Policy Number: Date of Incident: TEN EYCK, RONALD R 081500118A 20160 29090 00318 081500118 July 21, 2013 THIS IS NOT A BILL. DO NOT SEND PAYMENT AT THIS TIME. Subject: Beneficiary Conditional Payment Letter Dear RONALD R TEN EYCK: If we know you have a representative for this matter, we are sending him/her a copy of this letter. If you have any questions regarding this letter and are represented by all attorney or other individual in this matter, you may wish to talk to your representative before contacting us. This letter follows a previous letter notifying you/your attorney of Medicare's priority right of recovery as defined under the Medicare Secondary Payer provisions. Conditional Medicare payments for Medicare Part A and Part B Fee-for-Service claims have been made that we believe are related to your case for the Date of Incident listed above. These conditional payme·nts are subject to reimbursement to Medicare from proceeds you may receive pursuant to a settlement, judgment, award, or other payment. As of the date of this letter, and based upon the available information, Medicare has identified $8,599.92 in conditional payments that we believe are associated with your case. A listing of Part A and Part B Fee-for-Service claims that comprise this total is enclosed with this letter; please NGHP • PO BOX 138832 • OKLAHOMA CITY, OK 73113 SGLLCP'!'JGHP Page 1 of 11 Case 6:16-cv-00573-LEK-ATB Document 23-3 Filed 07/29/16 Page 2 of 12 review this listing carefully and let us know as soon as possible if this list is incorrect or inaccurate. If you believe the enclosed itemization of conditional payments is incomplete, inaccurate, or that you are not responsible for repaying Medicare for these payments, please provide written documentation along with an explanation to support your dispute/rebuttal, to the address listed below. Please include a description of the injury with your response. The following is a list of documents (not all inclusive) that could assist in processing your dispute/rebuttal request: • Statute of limitations submitted by the insurer • Physicians statement or discharge summary • Independent medical exams • Medical records • Written statement defining similar injuries or pre-existing conditions Please also be advised that we are still investigating this case file to obtain any other outstanding Medicare conditional payments; therefore, the enclosed listing of current conditional payments is not final. We request that you/your attorney refrain from sending any monies to Medicare prior to submission of settlement infonnation and receipt of a demand/recovery calculation letter from our office. This will eliminate underpayments, overpayments, and/or associated delays. Once the case settles, please furnish our office with the information requested on the attached "Final Settlement Detail Document". We have posted this conditional payment information under the "MyMSP" tah of the www.mymcdicarc.govwebsite. The information atwww.mymcdicarc.govwill be updated weekly with any changes or newly processed claims. If you wish, you may track the medical expenses that were paid by Medicare, and ifyou have an attorney or other representative, provide him/her with this information. This may help you with finalizing your settlement. If you have any questions concerning this matter, please contact the Benefits Coordination & Recovery Center (BCRC) by phone at 1-855-798-2627 (T1YfTDD: 1-855-797-2627 for the hearing and speech impaired), in writing at the address below, or by fax to 405-869-3309. When sending correspondence, please include the Beneficiary Name along with the Medicare and Case Identification Numbers (shown above). NGHP • PO BOX 138832 • OKLAHOMA UTY, OK 73113 IIIII SGLLCPNGHP Page 2 of 11 Case 6:16-cv-00573-LEK-ATB Document 23-3 Filed 07/29/16 Page 3 of 12 Sincerely, BCRC CC: ABDELLA LAW OFFICES Enclosures: Final Settlement Detail Document Payment Summary Fom1 NGHP • PO BOX 138832 • OKLAHOMA CITY, II 111111 n 1111 cos« ~" Coordinallon ot 6onolmo and Roeovery Page 3 of 11 Case 6:16-cv-00573-LEK-ATB Document 23-3 Filed 07/29/16 Page 4 of 12 Final Settlement Detail Document Beneficiary Name: Medicare Number: Date of Incident: Case Identification Number: TENEYCK, RONALD R 081500118A July 21, 2013 20160 29090 00318 cos« ~- CoordinAtion or ll Diagnosis TOS ICN Provider Name From Date # Contractor Indicator Codes 40 21525803217807NYA 0 13001 NATHAN LITT AVER ICD-9 72761 09/03/2015 HOSPITAL 40 21530603129307NYA 0 13001 NATHAN LffTAVER ICD-10 Z01818, 10/27/2015 HOSPITAL G5601 40 21531401534907NYA 0 13001 NATHAN LITT AVER ICD-10 G5602, E119, ll/0312015 HOSPITAL E669, E785, 110, 1509, J449, Z794, Z7982, Z79899 71 752215078012090 001 13282 MCCORMICK, NANCY E ICD-9 V571, 71941, 02/!0/20!5 72610 71 752215078012090 002 13282 MCCORMICK, NANCY E ICD-9 V57l, 71941, 02/10/2015 72610 g>B~ a.,.,,:;.ao;:~~alion of a, .. Recovery Date:· 04/21/2016 Time: 09:39:10 Page 5 of 11 Case ID: 20160 29090 0031 8 Case Type: L Liability Date of Incident: 07/21/2013 Reimburse Conditional Total To Date Amount Payment 09/03/2015 $2,906.00 $152.26 $152.26 10/27/2015 $1,013.96 $32.78 $32.78 11/03/2015 $5,733.08 $!,510.11 $1,510.11 02/10/2015 $100.00 $50.59 $50.59 02/10/2015 $60.00 $18.87 $18.87 . ' " ' ~ r < < ( ( ~ ( Case 6:16-cv-00573-LEK-ATB Document 23-3 Filed 07/29/16 Page 6 of 12 ~~. COB~ ~. CoO«alion of 8