JACK B. WEINSTEIN, Senior District Judge.
Table of Contents
I. Introduction ..............................................................402
II. Facts .....................................................................403
A. Medicare Payment Process Regarding Supplemental Health Insurance
Benefits .............................................................403
1. Requirements for Documenting Psychiatric Services .................403
2. MACs and Initial Medicare Payment Determinations ..................404
3. RACs and the Medicare Integrity Program ...........................405
B. Challenging an Audit Finding: Five-Stage Appeals Process ..............405
1. MAC Redetermination Request .......................................406
2. QIC Reconsideration ...............................................406
a. Procedural Dismissal ..........................................406
b. Substantive Redetermination ...................................406
3. Administrative Law Judge Hearing ..................................407
4. Appeals Council Review ............................................407
5. Judicial Review ...................................................407
C. Denial of Plaintiffs Medicare Reimbursement Claims ....................408
1. Dr. Pinkusovich's Psychiatric Practice ............................408
2. SafeGuard Services Audits Dr. Pinkusovich's Billing Records .......408
3. Art of Healing Appeals the Audit Findings .........................409
a. MAC Dismisses Art of Healing's Appeal for Failure to
Identify Beneficiaries Whose Claims Had Been Denied ..........409
b. Plaintiff Resubmits Redetermination Request to MAC ............410
c. Plaintiff Initiates Concurrent Action with QIC to Appeal MAC
Dismissal ....................................................410
d. MAC Issues Merits Decision Adverse to Plaintiff ...............410
e. QIC Vacates Dismissal But Still Issues Unfavorable Merits
Determination ................................................410
f. Plaintiff Unsuccessfully Appeals MAC'S Merits
Redetermination to QIC .......................................411
g. Plaintiff Exercises Its Right to Present Its Case to Appeals
Council, Which Upholds Overpayment Determination .............412
D. Timeline of Events ....................................................413
III. Law .......................................................................415
A. Administrative and Judicial Review Under the Medicare Act .............415
1. Relevant Statutory Authority ......................................415
2. Section 405(g) Sixth Sentence Remands .............................416
B. The Accardi Doctrine ..................................................417
C. The Administrative Procedure Act ......................................418
IV. Application of Facts to Law ...............................................419
V. Conclusion ................................................................419
Plaintiff Art of Healing, P.C. ("Art of Healing") brings this action pursuant to the Medicare Act, 42 U.S.C. §§ 405(g)-(h) and § 1395ff(b)(1)(A), and the Administrative Procedure Act ("APA"), 5 U.S.C. § 706. At issue are its claims for reimbursement by Medicare for psychotherapy
The Secretary of Health and Human Services ("Secretary"), pursuant to the sixth sentence of section 405(g) of Title 42 of the United States Code, requests a remand to the Commissioner of Social Security. She concedes that the Medicare Appeals Council of the Departmental Appeals Board ("Appeals Council") failed to address plaintiffs argument that the Qualified Independent Contractor ("QIC") panel physician, who conducted a review of the overpayment determination regarding plaintiff's services, was not qualified to do so.
Opposing remand, Art of Healing cross-moves for summary judgment. Setting aside the fact that the QIC panel physician may not have been appropriate, plaintiff additionally argues that the Appeals Council failed to recognize that the QIC decision was erroneous on its face. Alleged is that the QIC was prohibited from issuing a merits based decision when the appeal before it was on procedural grounds only. Plaintiff recognizes that its summary judgment claims under the Medicare Act, the Accardi doctrine, and the APA are "inextricably intertwined" with the failure of the Appeals Council to address the qualifications of the QIC physician. (Pl.'s Mem. of Law in Further Supp. of Mot. for Summ. J. 2, ECF No. 24 (emphasis added).) Yet, it argues that reversal of the Appeals Council decision on procedural grounds is required so that no purpose would be served by remand.
Were the court to find — in line with the Secretary's concession — that the Appeals Council decision is deficient, the proper procedure would be to remand to the agency for further proceedings under the sixth sentence of 405(g) of Title 42 of the United States Code. At this juncture in the dispute, remanding the instant action, which plaintiff admits deals with facts "inextricably intertwined" with its motion for summary judgment, is probably the most efficient course in deciding the case as it is now shaped. See, e.g., Fed. R. Civ. Pro. 1 ("secure the just, speedy, and inexpensive determination of every action"). The Appeals Council, which is expert in this field, can be expected to arrange for the case to be decided expeditiously on the merits.
Defendant's motion to remand is granted. Plaintiff's motion for summary judgment is denied.
The Medicare program was enacted in 1965 to provide health insurance to individuals sixty-five years of age and older. 42 U.S.C. § 1395 et seq. One of the program's objectives is to ensure that its beneficiaries have access to healthcare from providers, including doctors and institutions offering psychiatric services. Id. The type of benefits at issue here are supplemental health insurance benefits that cover certain services for beneficiaries who voluntarily enroll and pay additional premiums. 42 U.S.C. § 1395j et seq. These benefits are referred to as "Part B benefits." 42 C.F.R. § 1000.20.
Plaintiff emphasizes that the requirements for documenting psychiatric services are outlined in Local Coverage Determination No. L26895 ("LCD"). (See Administrative Record ("Admin.Rec.") 392-420 (LCD Manual), ECF No. 14.) Under the LCD, documenting the medical necessity of psychiatric services differs
First, under the Privacy Rule of the Health Insurance Portability and Accountability Act of 1996 ("HIPAA"), psychotherapy notes are confidential and may not be submitted as part of a claim for services. (Id. at 411.) Instead, the physician is required to extract the information necessary for billing review without disclosing confidential information. (Id. at 412.)
Second, successful treatment of psychiatric patients with long-term chronic conditions does not require demonstrable improvement; success can include the avoidance of hospitalization. (Id. at 395 ("It is not necessary that a course of therapy have as its goal restoration of the patient to the level of functioning exhibited prior to the onset of illness.... Where there is reasonable expectation that if treatment services were withdrawn the patient's condition would deteriorate, relapse further, or require hospitalization, this criterion would be met.").)
Third, information concerning treatment plans, functional status, and prognostic assessment need not be documented on individual dates of service, but can be identified from the record in the aggregate. (Id. at 412 ("Elements such as treatment plans, functional status and prognostic assessment are expected to be documented, updated and available for review, but do not need to be delineated for each individual date of service.").)
Fourth, the duration of services may be indeterminate, and the appropriate frequency of services can be determined based upon "accepted norms of medical practice." (Id. at 73, Letter from QIC to Art of Healing, dated April 12, 2013 (detailing references to LCD).)
When medical providers furnish Part B services to Medicare beneficiaries, the providers, including psychiatrists and the institutions for which they work, typically submit claims for reimbursement to Medicare Administrative Contractors ("MACs"). 42 U.S.C. § 1395ff(a)(2)(A). The Secretary enters into contracts with MACs pursuant to section 1395kk-1 of the Medicare Act. 42 U.S.C. § 1395u(a). These government contractors make coverage determinations in accordance with the Medicare Act and its corresponding regulations, authorizing payments for items and services provided to Medicare beneficiaries. 42 U.S.C. § 1395kk-1(a)(3)-(4); 42 C.F.R. §§ 421.200, 421.400 et seq.
Upon receipt of a Part B claim for payment, a MAC will issue a notice of "initial determination." 42 U.S.C. § 1395ff(a)(1); 42 C.F.R. §§ 405.920, 405.921. This "initial determination" notice indicates whether there is coverage and, if so, the amount payable. 42 C.F.R. §§ 405.920. An initial determination includes the following assessments: (1) whether the items and services furnished are covered under Medicare; (2) whether there has been an overpayment; and (3) whether the waiver of adjustment or recovery of an overpayment is appropriate. 42 C.F.R. §§ 405.924(b)(1) & (12). These determinations are not final.
As a general rule, MACs authorize payments on Part B claims "immediately" upon receipt of a claim in order to facilitate claims processing and cash flow to Medicare providers; only later are these determinations audited. Gulfcoast Med. Supply, Inc. v. Sec'y of Health and Human Serv.'s, 468 F.3d 1347, 1349 (11th Cir.2006) ("For reasons of administrative efficiency, carriers typically authorize payments on claims immediately upon receipt
Under the Medicare Integrity Program, Recovery Audit Contractors ("RACs") conduct post-payment audits to verify that the initial Part B payments made by MACs were proper. 42 U.S.C. § 1395ddd(b); 42 C.F.R. § 421.304. The post-payment audit process typically proceeds as follows:
Anghel, 912 F.Supp.2d at 9.
In some situations, the Act limits the liability of a provider when the individual did not know, or could not be expected to know, that the services would not be approved for payment under Medicare. 42 U.S.C. § 1395pp(a). A provider is expected to know which services are excluded from coverage based on Centers for Medicare and Medicare Services ("CMS") notices, including manual issuances, and bulletins, or other written guides or directives from MACs. 42 C.F.R. § 411.406(e)(1); see also, e.g., Medicare Claims Processing Manual Ch. 30, §§ 20, 30.2, 40.1, available at www.cms.gov.
Medicare cannot recover Part B overpayments made to a provider if the provider was "without fault" with respect to the overpayment. 42 U.S.C. § 1395pp(a)(2). "[A] provider of services is without fault where she exercises reasonable care in the billing for, and acceptance of, payments made to her by the Medicare Program." Anghel, 912 F.Supp.2d at 25 (finding that Medicare statute, CMS regulations, and manual provisions belied plaintiff's contention that she took care to ensure that her billings were in full compliance with Medicare's requirements). See also Heckler v. Cmty. Health Servs. of Crawford Cnty., Inc., 467 U.S. 51, 64, 104 S.Ct. 2218, 81 L.Ed.2d 42 (1984) (providers have a duty to familiarize themselves with legal requirements for cost reimbursement).
After a RAC has determined that a Part B claim should be disallowed, or that a provider was overpaid, the determination may be challenged. 42 C.F.R. § 405.940.
There are five levels in the Medicare Part B appeals process.
Department of Health and Human Services — Centers for Medicare and Medicaid, "Medicare Appeals Process," 1 (2014) (adapted), available at www.cms.gov. This multi-level administrative appeals process must be exhausted before a claimant can seek judicial review. Heckler v. Ringer, 466 U.S. 602, 627, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984).
A provider challenging an overpayment determination may first seek a "redetermination" from the MAC that initially processed its claim. 42 U.S.C. §§ 1395ff(b)(1)(A), (c)(1); 42 C.F.R. §§ 405.940. A redetermination involves an independent review of the claim by a MAC employee who was not involved in making the initial determination. 42 C.F.R. § 405.948.
Redetermination requests may be dismissed on various procedural grounds, including lack of a valid request, failure to file within the proper filing time, and lack of an initial determination on the claim. Id. at § 405.952(b). If the redetermination request is not dismissed, a merits decision is issued by the MAC. Id. at § 405.954. This substantive determination is a condition precedent to any further appeal or review of the disallowance at issue. Id. at § 405.960.
Appeals of procedural dismissals and substantive redeterminations issued by a MAC are referred to as QIC "reconsiderations." Id. at § 405.974.
While MAC procedural dismissals may be appealed to the QIC, substantive materials related to the merits of the claim are not submitted to the QIC panel. (Admin. Rec. 701, Letter from NGS to Art of Healing, dated December 28, 2012 (dismissal of redetermination request).) A procedural review is strictly limited to the appropriateness of the dismissal on procedural grounds. (Id.).
A substantive appeal of a MAC redetermination involves assessing the disallowance at issue. 42 U.S.C. § 1395ff(c)(3)(B)(i). The Medicare Act requires a healthcare professional similarly situated to the one whose billing records are being called into question to review the appeal. Id. at § 1395ff(g). The statute indicates that the QIC review panel must include (1) a physician who (a) is appropriately credentialed or licensed in one or more states to deliver healthcare services
A party dissatisfied with a QIC reconsideration decision may request a hearing by an administrative law judge ("ALJ") as long as the amount in controversy is at least $100. Id. at §§ 1395ff(b)(1)(E)(i), (d)(1); 42 C.F.R. §§ 405.1000, 405.1002(a), 405.1006(b). If, within ninety days, the party does not receive a decision from the ALJ, it may escalate its challenge to the Appeals Council, skipping the ALJ review process. 42 U.S.C. § 1395ff(d)(3)(A).
Parties are not entitled to a hearing before the Appeals Council. 42 C.F.R. § 405.1108(a). In the event an ALJ decision has issued, the Appeals Council, which renders the final decision of the Secretary, may adopt, modify, or reverse the ALJ's decision. Id. The Appeals Council may take any of the following actions:
Id. at § 405.1108(d).
So long as the amount remaining in controversy is at least $1,000, a dissatisfied provider can seek review by a federal court. 42 U.S.C. §§ 1395ff(b)(1)(A) (incorporating by reference the limited waiver of sovereign immunity in 42 U.S.C. §§ 405(g), (b)(1)(E)(i); 42 C.F.R. §§ 405.1130, 405.1136(a)(1), 405.1006(c)(1)).
The steps involved at each level of the appeals process can be summarized as follows:
Level What happens? When must you request When should you get a an appeal? decision? MAC Redetermination Document review of initial Up to 120 days after initial 60 days claim determination determination received from MAC QIC Reconsideration Document review of MAC Up to 180 days after 90 days redetermination; any evidence MAC redetermination not previously presented notice is received may be submitted at this level ALJ Hearing On-the-record review or Up to 60 days after QIC May be delayed due to interactive hearing reconsideration received volume between parties Medicare Appeals Document review of Up to 60 days after ALJ 90 days if appealing ALJ Council Review ALJ's decision or dismissal; decision received, or after decision, or 180 days if hearing not expiration of applicable ALJ review time expired mandatory ALJ hearing timeframe if without decision no decision received
Judicial Review by Hearing on motions and Up to 60 days after Appeals No statutory time limit U.S. District Court issuance of final judgment Council decision received, or after expiration of applicable Appeals Council review timeframe if no decision received
Medicare Appeals Process at 9 (adapted).
Dr. Alexander Pinkusovich completed his residency training in psychiatry at the Albert Einstein College of Medicine in the Bronx, New York in 1996. (Admin. Rec. 346, Curriculum Vitae of Dr. Alexander Pinkusovich.) Before coming to the United States, he worked at a psychiatric hospital in Ukraine, treating patients with acute psychiatric disorders. (Id.) He has been in psychiatric practice for over forty years, receiving recognition for his work from institutions like the Ukrainian Psychiatric Society and the Ukrainian Department of Health. (Id.)
As the Administrative Director of plaintiff, Dr. Pinkusovich served the Russian immigrant population in Brooklyn, New York. (Id. at 352, Sworn Affidavit of Dr. Philip Muskin, dated April 12, 2013.) He primarily treated an elderly and disabled Russian-speaking population suffering from severe psychiatric and psychological problems. (Id.) Dr. Pinkusovich treated these patients with a combination of medication and psychotherapy intended to prevent their further deterioration, relapse, or hospitalization. (Id. at 350-51.) His psychotherapy sessions, including their frequency, varied by patient. (Id. at 351) He supervised substantial expenditures for psychotropic and other drugs that he prescribed for his patients. (Id. at 1023-2102, Assorted Medical Records of Dr. Pinkusovich's Patients.)
In October of 2012, after completing a review that began in June 2011, SafeGuard Services LLC ("SafeGuard"), a RAC authorized to review claims in a region that includes New York State, found that Dr. Pinkusovich had used a "template tool" that employed standard wording to bill Medicare. (Id. at 636, Letter from SafeGuard to Art of Healing, dated October 9, 2012 (notice of initial overpayment determination).)
The SafeGuard consultant auditing the Art of Healing record reviewed ninety-one clinical notes from forty-one patients that involved billings amounting to $34,386.91. (Id. at 4 (Appeals Council Decision, dated April 24, 2014).) An extrapolation methodology from this analysis was applied to services rendered by Dr. Pinkusovich from January 3, 2008 through April 3, 2011. (Id. at 633, Letter from SafeGuard to Art of Healing, dated October 9, 2012 (initial overpayment determination).) SafeGuard calculated an overpayment amount of $410,468.95 made by Medicare to Art of Healing. (Id. at 633, 638.)
The SafeGuard consultant identified "a trend within the documentation as repetitive, contradictory, and limited." (Id. at 637.) Discrepancies were identified between the billing and the services recorded for one patient in Dr. Pinkusovich's records. (Id.) The consultant was unable to assess whether the patient's medical condition was improving, highlighting references made by Dr. Pinkusovich to the patient's "dress or personal hygiene," rather
On October 9, 2012, SafeGuard apprised plaintiff of its findings. (Id. at 633.) The notice provided specific reasons for the denial of claims made on behalf of at least five beneficiaries, and listed the Medicare health insurance claim numbers and the psychiatric treatment dates of other claims denied. (Id. at 637).
Two weeks later, on October 23, National Government Services ("NGS"), the MAC that had made the initial payment determinations on the claims audited by SafeGuard, sent a letter to plaintiff indicating that the Department of Health and Human Services sought to recoup $410,468.95. (Id. at 613.)
On November 21, 2012, Art of Healing sought a redetermination of the October 23 overpayment assessment from NGS. (Id. at 600, Letter from Art of Healing to NGS, dated November 21, 2012.) In its letter, plaintiff maintained that the overpayment determination was based on a mistake. (Id.) It noted that "the documentation review[] [performed by SafeGuard] did not include patients' Initial Psychiatric Evaluations, or Psychiatric Treatment Plans." (Id.) Art of Healing wrote: "[I]t is therefore highly disappointing that the reviewer did not, as it had promised, contact the provider to ask for the additional documents, as it had claimed in its audit letter that it would." (Id.) Art of Healing cited procedural errors on the part of the RAC consultant, such as SafeGuard's failure to provide notice of the reopening of the claims and its failure to specify on what grounds the determination to reopen was made. (Id. at 608.) Plaintiff concluded by requesting that NGS provide it with "the identity and credentials of its [RAC] consultant" and "any materials that he or she relied on in performing the analysis." (Id. at 610.)
One month later, on December 28, 2012, plaintiff's redetermination request was dismissed. (Id. at 698, Letter from NGS to Art of Healing, December 28, 2012.) The letter from NGS to plaintiff noted that the redetermination request was being denied "because it did not contain all of the information" necessary to process the request — i.e., Art of Healing had omitted to include: (1) the beneficiaries' name; (2) the Medicare health insurance claim number of the beneficiaries; (3) the specific service(s) and/or item(s) for which the redetermination is being requested and the specific date(s) of service; and (4) the name and signature of the person filing the request. (Id.) Plaintiff received a second letter from NGS stating that an Appointment of Representative form was required to process Medicare claims on appeal. (Id. at 687, Letter from NGS to Art of Healing, dated December 28, 2012.)
While the dismissal of Art of Healing's redetermination request detailed plaintiff's right to appeal the decision, because the dismissal was made on procedural grounds, plaintiff was counseled not to submit substantive materials to the QIC panel. (Id. at 699, Letter from NGS to Art of Healing, dated December 28, 2012.) The dismissal letter clarified: "QIC will not consider any evidence for establishing coverage of each claim being appealed. Their examination will be limited to whether or not the dismissal was appropriate." (Id.)
On January 7, 2013, plaintiff resubmitted its November 21, 2012 redetermination request to NGS. (Id. at 711, Letter from Art of Healing to NGS, dated January 7, 2013.) Aside from the inclusion of the Appointment of Representative form, the papers submitted were identical to the November 21 request. (Id.)
On January 15, 2013, plaintiff appealed the December 28, 2012 NGS dismissal to the QIC. (Id. at 45-48, Letter from Art of Healing to QIC, dated January 15, 2013.) This procedural appeal was dismissed fifteen days later by the QIC because, as NGS had found, plaintiff had failed to identify the beneficiaries whose claims had been denied. (Id. at 50, Letter from QIC to Art of Healing, dated January 30, 2013.)
Less than one week later, on February 5, plaintiff resubmitted its January 15 appeal to the QIC; this time, it included a disc received from SafeGuard containing information about the beneficiaries whose claims had been denied. (Id. at 55, Letter from Art of Healing to QIC, dated February 5, 2013.)
At this point, plaintiff had two concurrent actions pending regarding the same claims: one before NGS and one before the QIC.
On February 20, 2013, issuing a redetermination on the merits, NGS found that plaintiff had been overpaid by Medicare. (Id. at 57, Letter from NGS to Art of Healing, dated February 20, 2013.) The eight-page ruling from the MAC stated: "We have determined that the refund requested for the services on the enclosed spreadsheet was correct. We have also determined that Art of Healing ... is responsible for the overpayment.... The information submitted with this request was carefully reviewed and considered." (Id. at 59.)
Five days later, the QIC vacated its January 30 dismissal, reinstating Art of Healing's January 15 appeal. (Id. at 531, Letter from QIC to Art of Healing, dated February 25, 2013.) The letter from the QIC to plaintiff indicated that a decision would be made on the papers, without a hearing, and without the need for further follow-up. (Id.)
On April 12, 2013, QIC issued a reconsideration on the merits. (Id. at 66-75, Letter from QIC to Art of Healing, dated April 12, 2013 (detailing procedures and analysis employed by the QIC to reconsider plaintiffs' claim, including the "statistically valid random sample" and references to the LCD).) This decision, signed by Frank DelliCarpini, M.D., was unfavorable to plaintiff. (Id. at 66.) The decision noted:
(Id. at 73-74.)
In its summary judgment motion, plaintiff takes issue with the review conducted at the QIC level. (Pl.'s Mot. for Summ. J. 24, ECF No. 17.) Art of Healing points to documents suggesting that review of Dr. Pinkusovich's billing records at the QIC level was conducted by a licensed registered nurse, not Dr. DelliCarpini, a specialist in internal medicine, not psychiatry, who simply affixed his name to the report. (Admin. Rec. at 547, Letter from QIC to Art of Healing, dated April 12, 2013 ("Medical Decision Maker's Credentials").)
On April 16, 2013, plaintiff appealed NGS's February 20 redetermination to the QIC panel. (Id. at 121-37) (Letter from Art of Healing to QIC, dated April 16, 2013.) In this appeal, plaintiff included the sworn affidavit of Dr. Philip Muskin, Professor of Clinical Psychiatry and Chief of Consultation-Liaison Psychiatry at Columbia University Medical Center. (Id. at 349-52, Curriculum Vitae of Dr. Philip Muskin, prepared April 11, 2013.) Dr. Muskin had reviewed Dr. Pinkusovich's billing records and determined that the services provided were "medically necessary" and supported by the documentation originally submitted to NGS. (Id. at 351.)
Plaintiff received notice of the QIC's unfavorable reconsideration on April 19, 2013, three days after it had sent its appeal of NGS's February 20, 2013 redetermination to the QIC. (Id. at 524, Letter from Art of Healing to QIC, dated April 22, 2013 (requesting retraction of April 12, 2013 QIC decision).) In response, plaintiff sent a letter to the QIC asking it to retract its April 12, 2013 decision. (Id. at 524-26.) Plaintiff argued that the QIC improperly reviewed NGS's February 20, 2013 redetermination, stating:
(Id. at 524-25 (emphasis in original).)
On April 26, 2013, Dr. Pinkusovich himself wrote a letter to the QIC, emphasizing: "Frankly speaking I have [a] feeling that [the] QIC is simply being used as a cover up for extortion [being] conducted by SafeGuard." (Id. at 159.)
Dubbing Art of Healing's appeal of NGS's February 20 redetermination a "duplicate submission," on May 21, 2013, the QIC dismissed the appeal. (Id. at 164, Letter from QIC to Art of Healing, dated May 21, 2013 (dismissing April 16 appeal).) Plaintiff was informed to address any further appeal to the ALJ. (Id. at 165.)
The next month, on June 10, plaintiff appealed the QIC's April 12, 2013 reconsideration to the Office of Medicare Hearings and Appeals ("OMHA"). (Id. at 313, Letter from Art of Healing to OMHA, dated June 10, 2013.) Not having received an ALJ decision, on November 18, 2013, plaintiff exercised its right to have its case reviewed by the Appeals Council. (Id. at 149, Letter from Art of Healing to Appeals Council, dated November 18, 2013.) Dr. Pinkusovich sent a personal letter to the Appeals Council on November 25, 2013, reiterating his earlier allegations that the QIC was engaged in "wrongdoing." (Id.)
In an order dated January 23, 2014, the Appeals Council stated that it would decide the case without a hearing. (Id. at 144-47, Letter from Appeals Council to Art of Healing, dated January 23, 2014.)
On April 24, 2014, the Appeals Council adopted the QIC's determination, but modified its rationale to address more fully the factual and legal bases for upholding the denial. (Id. at 4, Appeals Council Decision, dated April 24, 2014.) Finding that the QIC acted properly in deciding to sua sponte consider the merits when plaintiff asked it to reconsider its January 30, 2013 dismissal, the Appeals Council upheld the overpayment determination. (Id. at 4, 10.) It clarified:
(Id. at 11 (emphasis added).)
After explaining that the "treating physician rule has never been extended to apply in Medicare cases," the Appeals Council provided a detailed analysis of its assessment of Dr. Muskin's testimony. (Id. at 12-16.) Declining to follow Dr. Muskin's recommendation, it noted:
(Id. at 15-18 (emphasis added).)
Although the Appeals Council acknowledged that plaintiff advanced the argument that the QIC physician lacked the necessary qualifications under the Medicare Act to review plaintiff's billing records and make an accurate determination, it did not reach the question. (Id. at 13-24.)
The timeline of events precipitating the instant action can be summarized as follows:
The Medicare Act provides the sole avenue for administrative and judicial review of Medicare claims. Heckler, 466 U.S. at 614, 104 S.Ct. 2013 (affirming dismissal of plaintiff's complaint because the designated levels of the administrative appeals process under the Medicare Act had not been exhausted). Section 1395ff(b)(1)(A) of the Medicare Act reads:
42 U.S.C. § 1395ff(b)(1)(A).
Congress explicitly provided that section 405(g) is the exclusive authority for seeking review of a decision of the Secretary in section 405(h) of Title 42 of the United States Code, made applicable to Medicare Part B claims by section 1395ii of the same title. Abbey v. Sullivan, 978 F.2d 37, 43 (2d Cir.1992), cited with approval by Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 18, 120 S.Ct. 1084, 146 L.Ed.2d 1 (2000). Section 405(g) reads as follows:
42 U.S.C. § 405(g) (due to the length of the provision and individual sentences, each sentence has been formatted as a distinct paragraph to ensure readability).
"Sentence-six remands may be ordered ... where the Secretary requests a remand before answering the complaint." Shalala v. Schaefer, 509 U.S. 292, 297 n. 2, 113 S.Ct. 2625, 125 L.Ed.2d 239 (1993). A sixth sentence remand "permits the district
The Supreme Court explained its favoring of remands as follows:
Fla. Power & Light Co. v. Lorion, 470 U.S. 729, 744, 105 S.Ct. 1598, 84 L.Ed.2d 643 (1985) (emphasis added). See also Nat'l Audubon Soc'y v. Hoffman, 132 F.3d 7, 14 (2d Cir.1997) ("Generally, a court reviewing an agency decision is confined to the administrative record compiled by that agency when it made the decision.") (citing Fla. Power & Light Co., 470 U.S. at 743-44, 105 S.Ct. 1598); Palisades Gen. Hosp. Inc. v. Leavitt, 426 F.3d 400, 403 (D.C.Cir. 2005) ("[U]nder settled principles of administrative law, when a court reviewing agency action determines that an agency made an error of law, the court's inquiry is at an end: the case must be remanded to the agency for further action consistent with correct legal standards.") (internal quotation marks and citation omitted); Anaheim Mem'l Hosp. v. Shalala, 130 F.3d 845, 853 (9th Cir.1997) ("Absent a final agency decision [from the Appeals Council], this court simply has no jurisdiction to `review' [plaintiff's] claim that equitable tolling permits its appeal."); Pereira v. Astrue, 279 F.R.D. 201, 208-09 (E.D.N.Y.2010) (remanding for further proceedings where Commissioner conceded that legal standard was applied improperly by ALJ).
The Secretary's admission of error constitutes "good cause" for a sentence six remand. See Medina v. Apfel, No. 00-CV-3940, 2001 WL 1488284, at *5-6 (S.D.N.Y. Nov. 21, 2001) (Commissioner's concession that ALJ applied wrong legal standard provides good cause for sixth sentence remand); Torres v. Shalala, 938 F.Supp. 211, 217-18 (S.D.N.Y.1996) ("Here, the Secretary has moved to remand prior to filing an answer and has demonstrated good cause by acknowledging legal error.") (citations omitted) (collecting cases).
The Accardi doctrine stands for the notion that rules promulgated by federal agencies, which are used to regulate the rights and interests of others, "are controlling upon the agency." Montilla v. I.N.S., 926 F.2d 162, 166 (2d Cir.1991) (citations omitted). The doctrine dictates that when an agency fails to adhere to its own regulations, its determination will be
Hickey-McAllister v. British Airways, 978 F.Supp. 133, 140 (E.D.N.Y.1997) (citing Montilla, 926 F.2d at 166-68).
Under the APA, a court is authorized to "set aside agency action, findings, and conclusions found to be ... without observance of procedure required by law." 5 U.S.C. § 706(2)(D). The statute reads as follows:
5 U.S.C. § 706.
The Court of Appeals for the Second Circuit has held that "where no provision of [section] 405(g) is on point, [courts] apply the judicial review provisions of the APA." Yale-New Haven Hosp. v. Leavitt, 470 F.3d 71, 78 (2d Cir.2006) (emphasis added) (finding that because section 405(g) does not provide for judicial review of administratively
Unavailing is plaintiff's argument that the court should first determine whether plaintiff can prevail on the existing record before determining whether to grant the Secretary's remand motion. (Pl.'s Mem. of Law in Further Supp. of Mot for Summ. J. 4.) The court has reviewed the existing record in its entirety and come to the same conclusion as plaintiff — i.e., that its summary judgment motion and its claims under the Accardi doctrine and the APA are "inextricably intertwined with the motion to remand." (Id. at 2 (emphasis added).) This finding, in conjunction with the Secretary's admission that the Appeals Council erred by failing to address plaintiff's argument that the QIC panel physician was not sufficiently qualified to conduct a review of the overpayment determination, mandates a remand.
Pursuant to the sixth sentence of section 405(g) of Title 42 of the United States Code, the case is remanded to the Appeals Council to arrange for a full hearing on the merits — both substantive and procedural. The administrative hearing shall: (1) address the propriety of Dr. DelliCarpini's review of Dr. Pinkusovich's billing records and whether, if necessary, another review of the records needs to be conducted by a qualified physician; (2) determine whether the QIC appropriately issued a decision on the merits as opposed to one on procedural grounds; (3) resolve the issue of whether remand to the QIC is appropriate; and (4) consider such other matters as are relevant to a decision on the merits of plaintiff's claims.
The Medicare Act provides that, after hearing on remand and issuance of the decision on remand, the Secretary:
42 U.S.C. § 405(g) (sixth sentence). The statute authorizes the court to review the Secretary's additional or modified findings of fact and decision to the same extent as the original decision. 42 U.S.C. § 405(g) (seventh sentence).
Defendant's motion to remand this action for further consideration by the Medicare Appeals Council is granted.
The parties shall provide the court with an order regarding the substantive and procedural issues to be addressed at the full hearing to be conducted at an appropriate administrative level. See Hr'g Tr. Mar. 9, 2015.
The motion for summary judgment is denied as moot.
This court retains jurisdiction. The case shall be marked "closed," subject to being reopened by letter.
SO ORDERED.
