Action Alliance of Senior Citizens v. Leavitt

483 F.3d 852, 376 U.S. App. D.C. 46, 2007 U.S. App. LEXIS 8691, 2007 WL 1119646
CourtCourt of Appeals for the D.C. Circuit
DecidedApril 17, 2007
DocketNo. 06-5295
StatusPublished
Cited by25 cases

This text of 483 F.3d 852 (Action Alliance of Senior Citizens v. Leavitt) is published on Counsel Stack Legal Research, covering Court of Appeals for the D.C. Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Action Alliance of Senior Citizens v. Leavitt, 483 F.3d 852, 376 U.S. App. D.C. 46, 2007 U.S. App. LEXIS 8691, 2007 WL 1119646 (D.C. Cir. 2007).

Opinion

Opinion for the Court filed by Senior Circuit Judge WILLIAMS.

WILLIAMS, Senior Circuit Judge:

This case involves an effort on behalf of some 230,000 participants in the Medicare Part D prescription drug program to re[48]*48sist — indeed to reverse — the government’s efforts to recover payments mistakenly made to those participants. The district court issued an injunction ordering the Secretary of Health and Human Services (the “Secretary”) (1) to refund monies to those participants who had, at the Secretary’s request, returned the errant payments and (2) to notify all recipients of a right to request waiver of repayment. This court stayed the injunction. The plaintiffs have over the course of the litigation invoked two statutory bases for relief. (Plaintiffs also brought constitutional claims, which the district court did not reach.) As to the claim under 42 U.S.C. § 404(b), we find that the district court lacked jurisdiction; and the second claim, under 42 U.S.C. § 1395gg, clearly lacks merit. Thus, we vacate the injunction and remand.

* * * X * *

Medicare Part D, established by the Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. No. 108-173, 117 Stat. 2066, offers subsidized prescription drug insurance coverage. 42 U.S.C. § 1395w-101(a)(l). Whereas under Medicare Parts A and B the government pays providers on participants’ behalf for goods or services received, under Part D the government contracts for and subsidizes insurance plans offered by private, third-party insurers. Id. § 1395w-115.

Part D participants pay monthly premiums to their insurers. See id. § 1395w-113(a). Most make these payments directly, but about 20% have opted to have the Social Security Administration (“SSA”) deduct the amount of their Part D premium from their monthly benefits under Title II of the Social Security Act and transmit that sum, on the participant’s behalf, to the insurer. Id. §§ 1395w-116(b)(3) & 1395w-24(d)(2)(A); see also 42 C.F.R. §§ 423.293(a) & 422.262(f) (2006). The SSA, which plaintiffs have not sued, administers Old-Age, Survivor, and Disability Insurance benefits under Title II of the Social Security Act; Health and Human Services (“HHS”) administers the various Medicare programs found under Title XVIII of that Act. Since 1994 the SSA, directed by the Commissioner of Social Security (the “Commissioner”), has been independent of HHS. See Social Security Independence and Program Improvements Act of 1994, Pub. L. No. 103-296, 108 Stat. 1464; 42 U.S.C. §§ 401-434 (Title II); id. §§ 1395-1395hhh (Title XVIII).

In a monumental gaffe in early August 2006, the SSA wrote to some 230,000 participants, stating “[w]e will no longer deduct money for your health plan premium(s) from your monthly benefits.” Amended Compl., Ex. B, Joint Appendix (“J.A.”) 61. The letter also said, without further explanation, that the addressee would be receiving a check in a specified amount, coinciding with the recipient’s premium for the just-past month. The average payment was $215, for a total of some $47 million. The parties agree these payments were all made in error. In early September, the Secretary requested repayment of the funds by the end of that month, but indicated that “[i]f returning the amount in full presents you with a hardship, you may request to make monthly installment payments for as many as seven months.” See id. Ex. A, J.A. 58-59. The Secretary’s letter also stated (accurately) that despite the mistaken payment to the insured, “prescription drug coverage will continue uninterrupted.” Id.

On September 15, Action Alliance and the Gray Panthers (collectively “the Alliance”), advocacy organizations whose membership includes many Part D participants, filed suit in district court seeking injunctive, declaratory, and mandamus relief on statutory and constitutional [49]*49grounds. (The plaintiffs later amended their complaint to add Lucy Carolyn Loveall, a Part D participant who received a check for $161.70, a sum which she spent and states she is now unable to repay.) The complaint rested in part on 42 U.S.C. § 1395gg, which allows the government to recover funds where “more than the correct amount is paid under th[e] [Medicare] subchapter ... for items or services furnished an individual,” § 1395gg(b), but provides for government waiver of this recovery:

There shall be no adjustment as provided in subsection (b) of this section (nor shall there be recovery) in any case where the incorrect payment has been made ... with respect to an individual who is without fault ... if such adjustment (or recovery) would defeat the purposes of subchapter II [Old-Age, Survivors, and Disability Insurance] or subchapter XVIII [Medicare] of this chapter or would be against equity and good conscience.

42 U.S.C. § 1395gg(c).

The Alliance asserted that Part D participants who received erroneous payments were entitled, under § 1395gg, to “written notice ... of their right to seek waiver of repayment” and an oral hearing prior to recovery of such payments. Amended Compl. at 14, J.A. 52. The district court rejected this claim, noting that § 1395gg applies only to payments for “items or services” (such as under Medicare Parts A and B), and thus that its waiver provision did not encompass erroneous premium refunds. Action Alliance of Senior Citizens v. Leavitt, 456 F.Supp.2d 11, 18 (D.D.C.2006).

But the court observed that Medicare Part A and B participants who authorize SSA to withhold their premiums under those parts do enjoy a waiver right for erroneous premium refunds. Internal SSA policy guidelines, in the form of its Program Operations Manual System (“POMS”), create such a right on the basis of Title IPs general waiver provision, 42 U.S.C. § 404(b). Action Alliance, 456 F.Supp.2d at 18-20; see also Social Security Administration, Program Operations Manual System § HI 01001.330.A.

Section 404 addresses adjustment or recovery of incorrect payments to Title II (Social Security) beneficiaries “[w]henever the Commissioner of Social Security finds that more or less than the correct amount of payment has been made to any person under this [Title II] subchapter.” 42 U.S.C. § 404(a). Section 404(b) goes on to say:

In any case in which more than the correct amount of payment has been made, there shall be no adjustment of payments to, or recovery by the United States from, any person who is without fault if such adjustment or recovery would defeat the purpose of this sub-chapter or would be against equity and good conscience.

Id. § 404(b).

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Bluebook (online)
483 F.3d 852, 376 U.S. App. D.C. 46, 2007 U.S. App. LEXIS 8691, 2007 WL 1119646, Counsel Stack Legal Research, https://law.counselstack.com/opinion/action-alliance-of-senior-citizens-v-leavitt-cadc-2007.