Second Circuit Court of Appeals Rules Beneficiaries Can “Aggregate” Medicare Claims at Federal Court

Beneficiaries who wish to “aggregate” Medicare claims to meet the monetary threshold for appeals can do so for the first time at the federal district court level, an appeals court ruled. The case involves a Medicare beneficiary who is appealing for coverage of equipment for his Continuous Glucose Monitor, which helps control his “brittle” (particularly acute) diabetes.

After pursuing several separate appeals through Medicare’s multi-level administrative appeal system, he wished to aggregate three claims and have a federal district court decide the coverage question for all of them together. However only one of the three claims was over the amount-in-controversy threshold, which was $1500 at the time he filed suit.[1] Unless he could aggregate the claims, the district court would not have jurisdiction to decide the two claims that fell below the monetary threshold.

Medicare law allows appellants to aggregate claims to meet the amount-in-controversy threshold when the appeals involve “delivery of similar or related services to the same individual by one more providers of services or suppliers.”[2] The government argued and a lower court held that this provision applies only to appeals that are still in Medicare’s administrative appeal system. Thus, unless the claims had already been aggregated, the beneficiary could not pursue claims that did not meet the monetary threshold in federal court.

The U.S. Court of Appeals for the Second Circuit disagreed. It reviewed the history of the aggregation provision in detail and concluded that aggregation is not limited to Medicare agency review and applies to judicial review as well. It sent the case back to the district court to decide whether the three aggregated claims will receive coverage. Bloom v. Azar, --- F. 3d ---, 2020 WL 5648519, *5, *7 (2d Cir. Sept. 23, 2020).

The decision applies in the Second Circuit (New York, Connecticut, and Vermont) and is a welcome recognition of the importance of appeal rights in Medicare. Aggregation is important for beneficiaries who want to seek coverage of claims that fall under the amount-in-controversy threshold, but that represent a significant amount of money to an older or disabled individual. Half of all Medicare beneficiaries lived on yearly incomes below $29,650 per person in 2019; one in four had incomes below $17,000 per person.[3] The case was brought by the Parrish Law Offices. A copy of the decision is available here.

_________________

[1] 42 U.S.C. § 1395ff(b)(1)(E)(i) (setting annually-adjusted amount-in-controversy thresholds for Administrative Law Judge hearings and for judicial review).
[2] 42 U.S.C. § 1395ff(b)(1)(E)(ii).
[3] Kaiser Family Foundation, Medicare Beneficiaries’ Financial Security Before the Coronavirus Pandemic (Apr. 24, 2020).