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MOORE v. SULLIVAN

February 5, 1992

RICHARD R. MOORE, et al., Plaintiffs, against LOUIS W. SULLIVAN, SECRETARY, DEPARTMENT OF HEALTH AND HUMAN SERVICES, Defendant.

GRIESA


The opinion of the court was delivered by: THOMAS P. GRIESA

It appears that Medicare claims of the type involved here are often assigned by the patients to the physicians or other suppliers of medical services who then present the claims for payment. Plaintiffs in this case are such assignees. In interpret the statute, the agency has thus far taken the position that claims of two or more assignee physicians or suppliers cannot be aggregated, although the claims, if presented by the individual beneficiaries, may be aggregated. Plaintiffs contend that this is a misinterpretation of the statute and that two or more assignee physicians or suppliers have a right to aggregate their claims, if certain other conditions of the statute are fulfilled.

 FACTS

 This action is brought by seven physicians who provided treatment to persons eligible for Medicare benefits. Each of the seven patients was enrolled in the so-called "voluntary Medicare Part B health insurance program." Plaintiffs filed claims with the carrier, Empire Blue Cross and Blue Shield, seeking payment of the Medicare Part B benefits. The carrier made initial determinations to which plaintiffs objected. The carrier then provided hearings resulting in determinations to which plaintiffs again objected. Plaintiffs then requested to be heard by an administrative law judge of the Social Security Administration of the Department of Health and Human Services.

 The requests for an ALJ hearing were made pursuant to Section 9341 of the Omnibus Budget Reconciliation Act of 1986. Prior to this statute there had been no right to such a hearing in connection with claims of the kind involved in this case. The new law provides for a hearing of such claims before an ALJ where the amount in controversy is $ 500 or more, and subsequent review by a court where the amount in controversy exceeds $ 1,000. 42 U.S.C. § 1395ff(b)(2). The statute goes on to provide for aggregation of claims in order to satisfy the amount-in-controversy requirements.

 In determining the amount in controversy, the Secretary, under regulations, shall allow two or more claims to be aggregated if the claims involve the delivery of similar or related services to the same individual or involve common issues of law and fact arising from services furnished to two or more individuals.

 42 U.S.C. § 1395ff(b)(2).

 In the present case, the amount of each claim presented for ALJ hearing was less than $ 500, but the total of all the claims was $ 1,960.32. Plaintiffs requested aggregation under the new statute on the basis that the claims "involve common issues of law and fact arising from services furnished to two or more individuals."

 It is conceded that plaintiffs' claims present common questions of law and fact and that the total amount of the claims is more than $ 500. The requests for an ALJ hearing were made in April 1989 and all claims relate to services performed subsequent to the effective date of the new statute. However, the statute provides for implementation "under regulations," and as of April 1969 the Secretary had issued no such regulations. Plaintiffs nevertheless took the position that they had a right to aggregation directly under the statute in view of the long delay in issuing the required regulations.

 Administrative Law Judge Kenneth E. Stewart denied the requests for an ALJ hearing on the ground that each claim individually failed to come up to the requisite $ 500, and that there could be no aggregation in the absence of regulations. Judge Stewart's rulings were handed down in September and October 1989.

 Plaintiffs requested review by the Appeals Council. In rulings issued on January 25, 1990 the Council declined to order an ALJ hearing. The Council held that, pending the issuance of regulations by the Secretary, aggregation would be governed on an interim basis by a regulation applicable to requests for a hearing at the carrier level. 42 CFR 405.820. This regulation does not allow the aggregation of claims made by two or more physicians or suppliers. It should be noted that at the carrier level the jurisdictional amount is only $ 100, and the need for aggregation is not great.

 The present lawsuit was commenced in March 1990. The complaint alleges two causes of action. The first seeks remand to defendant, the Secretary of Health and Human Services, with the direction to allow the aggregation of plaintiffs' claims and to have these claims heard before an administrative law judge. The second cause of action seeks mandamus directing the Secretary to promulgate regulations under the statute allowing claims to be aggregated in accordance with plaintiffs' interpretation of the statute. Defendant's answer was filed in July 1990 denying plaintiffs' allegations.

 In the fall of 1990 both sides filed cross-motions for judgment on the pleadings.

 By consent of the parties, on April 22, 1991 the court issued an order holding the motions in abeyance for 60 days in order to allow the ...


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