Johnson v. Becerra

UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
CATHERINE JOHNSON, et al.,
Plaintiffs,
v. Case No. 1:22-cv-03024 (TNM)
XAVIER BECERRA, in his official capacity
as Secretary of Health and Human Services,
Defendant.
MEMORANDUM OPINION
Medicare beneficiaries with chronic, debilitating conditions have struggled to find home
health agencies (HHAs) willing or able to provide them with in-home aide services. They now
sue the Secretary of Health and Human Services (HHS) for his role in administering the
Medicare program. Plaintiffs allege that an assortment of the Secretary’s policies and practices
deter the availability of aide services in violation of the Medicare statute and the Rehabilitation
Act.
The Secretary moves to dismiss for lack of subject matter jurisdiction and alternatively
for failure to state a claim. Because Plaintiffs lack standing to challenge the Secretary’s policies,
the Court lacks subject matter jurisdiction and must grant the Secretary’s motion.
I.
A.
Medicare reimburses private agencies that care for eligible aged and disabled persons.
The Centers for Medicare & Medicaid Services (CMS), a component of HHS, administers this
health insurance program. Medicare covers some services that are provided in the home by
participating home health agencies. These services include skilled nursing services, physical and
occupational therapy, and, relevant here, “part-time or intermittent services of a home health
aide.” 42 U.S.C. § 1395x(m)(1), (2), (4).
Home health aides “provide hands-on personal care to the beneficiary, or services that are
needed to maintain the beneficiary’s health, or [] facilitate treatment of the beneficiary’s illness
or injury.” Compl. ¶ 43; see also C.F.R. § 409.45(b)(1). An aide might, for example, assist a
beneficiary with bathing, dressing, or moving around his home. See Compl. ¶ 44. Aides may
also provide incidental services, such as changing bed linens, personal laundry, or preparing a
light meal. See Compl. ¶ 45; see also C.F.R. § 409.45(b)(4). Medicare covers up to 28 hours
(or, in some cases, up to 35 hours) of aide services per week. See 42 U.S.C. § 1395x(m).
If a beneficiary is eligible and referred to home health services, the beneficiary identifies
an HHA in his area that is willing and able to accept him as a patient. To help patients decide
which HHA is right for them, the Medicare statute requires the Secretary to collect care quality
data from HHAs and share that data with the public. See 42 U.S.C. § 1395fff(b)(3)(B)(v); 42
C.F.R. § 484.245. To do so, the Secretary publishes a consumer-facing metric known as the
“Quality of Patient Care Star Ratings.” See generally Fact Sheet: Quality of Patient Care Star
Rating, CMS, https://perma.cc/53Z6-LVKK. This web-based system assigns each HHA a rating
ranging from one to five stars, with five stars indicating highest quality. See id. at 1. The Star
Ratings are determined using a formula based on “seven measurements of quality.” Id. Five
track patient improvement, such as improvement in mobility or breathing. See id.All HHAs reserve the right to choose which patients they serve. And an HHA need not
accept Medicare at all. See 42 U.S.C. § 1395a(a) (providing that a beneficiary may obtain health
services “if such institution, agency, or person undertakes to provide him such services”
(emphasis added)). More, an HHA may only accept a patient when it reasonably expects that it
2
can meet the patient’s needs and provide the services described in her plan of care. See 42
C.F.R. § 484.60(a)(1) (“Patients are accepted for treatment on the reasonable expectation that an
HHA can meet the patient’s medical, nursing, rehabilitative, and social needs in his or her place
of residency.”). And once an HHA has accepted a patient, it must provide care as described in
the patient’s plan of care. See id. § 484.60 (“Each patient must receive the home health services
that are written in an individualized plan of care . . . .”).
Medicare imposes other conditions of participation on HHAs. For example, an HHA is
required to “arrange a safe and appropriate transfer to other care entities” if it discharges a
patient. Id. § 484.50(d)(1). It must also accept, document, and investigate patient complaints.
See id. § 484.50(e)(1). If CMS receives many complaints, it must survey the HHA for
compliance. See 42 U.S.C. § 1395bbb(c)(2)(B)(ii). CMS must also conduct a standard survey of
every HHA no less than once every three years. See id. § 1395bbb(c)(2)(A). And HHAs must
meet all applicable civil rights requirements, including Section 504 of the Rehabilitation Act of
1973. See 42 C.F.R. § 489.10.
Under the Medicare statute, the Secretary has the “duty and responsibility” to “assure”
that “the enforcement of such conditions and requirements are adequate to protect the health and
safety of individuals under the care of a[n] [HHA] and to promote the effective and efficient use
of public moneys.” Id. § 1395bbb(b). CMS has the concomitant responsibility to terminate
agreements with HHAs that fail to comply with the conditions and requirements of participation.
See 42 C.F.R. §§ 489.53(a)(9), 489.2(b)(3).
Because these services are not provided directly by the federal government, Medicare
reimburses participating HHAs when they provide covered services. To control costs, Medicare
pays HHAs prospectively for their services rather than reimbursing providers after-the-fact. This
3
is required by statute. See 42 U.S.C. § 1395fff(a). Medicare reimbursements are based on 30-
day periods of home health care. See id. § 1395fff(b)(2)(B). To calculate payments, each period
is categorized into one of 432 “case-mix” groups based on the beneficiary’s specific care
requirements. See 42 C.F.R. § 484.202. For instance, Medicare pays a higher rate for treatment
of patients with certain comorbidities or for patients in a clinical grouping that has historically
required more intensive care. The Secretary annually updates payment rates and policies through
administrative rulemaking. See Compl. ¶ 58.
B.
Now to the substance of this case. The individual Plaintiffs in this putative class action
are Medicare beneficiaries with chronic, disabling conditions. See Compl. ¶¶ 15–17. Though
Medicare covers their aide services, they have struggled to find providers willing or able to
provide those services. At times, Plaintiffs have found HHAs to accept them as Medicare
patients. Even then, they were not provided with the full amount or duration of aide described in
their plans of care. See, e.g., id. ¶¶ 88–90, 112. To bridge gaps, these Plaintiffs have relied on
assistance from family members and privately paid aides. See id. ¶¶ 101, 112, 135. But self-
help only goes so far. Plaintiffs suffer deteriorating health during times of intermittent care. See
id. ¶¶ 91–99, 110–13. And, unable to obtain needed services at home, they have been forced to
resort to institutional settings, such as hospitals or nursing homes, to obtain care. See id. ¶¶ 114–
17.
Consider lead Plaintiff Catherine Johnson, who suffers from quadriplegia resulting from
multiple sclerosis. See id. ¶¶ 81–82. Following a period of insufficient and irregular home
health care, she was hospitalized in the intensive care unit. See id. ¶ 95. After hospitalization,
Johnson had to find another Medicare-certified HHA. See id. ¶ 100. And although her eligibility
4
did not change, that second HHA stopped providing aide services after only 60 days. See id.That same HHA, however, continued to provide other kinds of Medicare-covered home health
services. See id. So Johnson again resorted to paying out-of-pocket for more aide services, even
though she was under the care of an HHA. See id. ¶ 101.
Joining the individual Plaintiffs in this suit are the National Multiple Sclerosis Society
and Team Gleason. See id. ¶¶ 18–19. Many individuals these groups serve struggle to obtain
home care services, including Medicare-covered home health aide services. See id. ¶¶ 147–48,
166. In response, these groups have diverted resources to fund private aide care for Medicare
beneficiaries like Johnson. See id. ¶¶ 150–59, 165–69.
Plaintiffs sued the Secretary for his role in administering Medicare’s home health benefit,
and later moved for class certification. See Mot. to Certify Class, ECF No. 26. First, they allege
that various of the Secretary’s “policies and practices . . . impede and restrict the availability and
accessibility of Medicare-covered home health aide services.” Id. ¶ 188. This, they claim,
violates the Secretary’s statutory “duty to oversee and enforce the Medicare Conditions of
Participation and requirements.” Id. Second, Plaintiffs allege that the Secretary’s “policies and
practices discriminate against Plaintiffs . . . on the basis of disability” in violation of Section 504
of the Rehabilitation Act, 29 U.S.C. § 794(a). Id. ¶ 192. They argue the Secretary is violating
§ 504 and its implementing regulations by administering Medicare in a way that risks
unnecessary institutionalization of beneficiaries with chronic conditions. See id. ¶ 193.
The Secretary now moves to dismiss all claims, see Mot. to Dismiss (MTD), ECF No. 21,
and the Court held a hearing on that motion. He argues that the Court lacks subject matter
jurisdiction and alternatively that Plaintiffs fail to state a claim. The Court agrees that it lacks
subject matter jurisdiction and will grant the Secretary’s motion to dismiss.
5
II.
Before it may pass on the merits of Plaintiffs’ claims, the Court must first confirm its
jurisdiction over this case. Rule 12(b)(1) provides for the dismissal of an action for lack of
subject matter jurisdiction, including lack of standing. See Lawyers’ Comm. For 9/11 Inquiry,
Inc. v. Wray, 424 F. Supp. 3d 26, 30 (D.D.C. 2020), aff’d, 848 Fed. Appx. 428 (D.C. Cir. 2021).
The burden is on Plaintiffs to show subject matter jurisdiction. Id. at 36. And because
jurisdictional challenges implicate the Court’s power to hear a case, “the Court must give the
plaintiff’s factual allegations closer scrutiny than would be required for a 12(b)(6) motion for
failure to state a claim.” La Botz v. FEC, 61 F. Supp. 3d 21, 27 (D.D.C. 2014). Thus, “the court
is not limited to the allegations contained in the complaint.” Id.The Secretary argues that Plaintiffs lack standing to challenge his administration of the
Medicare program. Article III of the Constitution limits the jurisdiction of federal courts to
“actual cases or controversies.” Clapper v. Amnesty Int’l USA, 568 U.S. 398, 408 (2013)
(cleaned up). This means a party must have “[s]tanding to sue.” Id. (cleaned up). To establish
standing, Plaintiffs must show they have suffered (1) an injury in fact, (2) that is fairly traceable
to the challenged conduct, and (3) “likely” to be redressed by a favorable decision. Lujan v.
Defenders of Wildlife, 504 U.S. 555, 560–61 (1992) (cleaned up). “Only one plaintiff needs
standing to press each claim.” Mass. Coal. for Immigr. Reform v. DHS, 2022 WL 3277349, at *3
(D.D.C. Aug. 11, 2022).
III.
The Secretary argues that Plaintiffs lack standing to challenge his administration of the
Medicare program. He does not dispute that Plaintiffs have alleged an injury in fact. The
individual Plaintiffs have been unable to access Medicare-covered home health aide services
6
despite meeting all requirements. See Compl. ¶¶ 101, 112, 135. And the organizational
Plaintiffs have diverted resources to help their constituents fill the void between what Medicare
entitles them to and what HHAs are willing to provide. See id. ¶¶ 150–59, 165–71.
Instead, the Secretary contends that Plaintiffs failed to show that these injuries were
caused by him or that their requested relief would redress any harm. The Court agrees that
Plaintiffs have at minimum failed to plausibly allege redressability. Thus, they lack standing to
sue.
A.
The Court starts with the nature of Plaintiffs’ injuries. When causation and redressability
“hinge upon the independent choices of [a] regulated third party, it becomes the burden of the
plaintiff to adduce facts showing that these choices have been or will be made in such manner as
to produce causation and permit redressability of injury.” Nat’l Wrestling Coaches Ass’n v.
Dep’t of Educ., 366 F.3d 930, 938 (D.C. Cir. 2004) (cleaned up). Thus, if “a plaintiff’s asserted
injury arises from the Government’s regulation of a third party that is not before the court, it
becomes substantially more difficult to establish standing.” Id. (cleaned up).
The injuries asserted here result directly from individual, third party HHAs declining to
provide Plaintiffs with Medicare-covered aide services. This happens in different ways. Some
HHAs refuse at the outset to accept Medicare beneficiaries who require aide services. See
Compl. ¶¶ 11. Others initially provide aide visits and then discontinue or reduce those services
despite the beneficiary’s plan of care remaining unchanged. See id. ¶¶ 100–01, 103, 135. What
Plaintiffs have in common is that their injuries result directly from “choices made by
independent actors not before the court[.]” Lujan, 504 U.S. at 562.
7
Now for Plaintiffs’ theory of causation. Broadly speaking, they claim that HHAs are less
likely to offer home health aide services because of the Secretary’s oversight practices. See
Opp’n at 7–11. Plaintiffs say that their injuries can be traced to the Star Rating system and audit
procedures. First, the Star Rating system penalizes HHAs that provide aide services to
beneficiaries with ongoing or debilitating conditions. See Compl. ¶ 73. It does so by rewarding
providers that care for patients who show demonstrable improvements in health outcomes. See
id. ¶ 72. So the Secretary’s methodology encourages HHAs to juice their ratings by not offering
aide services to beneficiaries who are not expected to recover. See id. ¶ 74.
Compounding Plaintiffs’ troubles, the Secretary is allegedly more likely to audit HHAs
that serve patients with low likelihoods of improving. Those patients often require care for
longer than the average length. See id. ¶ 67. This “may attract Medicare reviewers’ attention,”
causing HHAs to “los[e] time and resources addressing audits and reviews.” Id. HHAs thus
reduce the risk of costly audits by not providing aide services to patients with ongoing illness
altogether.
To bolster their theory of causation, Plaintiffs point to a 90% decline nationally in home
health aide visits between 1998 and 2019. See id. ¶ 179; Tr. of Mot. Hr’g (Hr’g Tr.) at 43. They
emphasize that this occurred even though Medicare’s eligibility criteria for aide services have
remained essentially the same. See id. ¶ 6. The implication of this, Plaintiffs suggest, is that the
Secretary’s policies must be to blame for the systemic shortage of home health aide services.
This Court need not decide whether the Secretary caused Plaintiffs’ injuries. Even
assuming that their injuries are caused by the Secretary’s Star Rating system and enforcement of
Medicare’s Conditions of Participation more broadly, it is “purely speculative” that these injuries
would be redressed if the Court were to grant Plaintiffs the relief they seek. Nat’l Wrestling
8
Coaches Ass’n, 366 F.3d at 938. Plaintiffs thus lack Article III standing to bring this action. See
U.S. Ecology, Inc v. DOI, 231 F.3d 20, 24 (D.C. Cir. 2000) (explaining that “a deficiency on any
one of the three prongs suffices to defeat standing”).
“Redressability examines whether the relief sought, assuming that the court chooses to
grant it, will likely alleviate the particularized injury alleged by the plaintiff.” West v. Lynch,
845 F.3d 1228, 1235 (D.C. Cir. 2017) (cleaned up). “The key word is ‘likely.’” Id. (quoting
Lujan, 504 U.S. at 561). And while the Court “must take the complaint’s allegations of facts,
historical or otherwise demonstrable, as true,” it “treat[s] allegations that are really predictions
differently.” Arpaio v. Obama, 797 F.3d 11, 21 (D.C. Cir. 2015). “When considering any chain
of allegations for standing purposes,” the Court “may reject as overly speculative those links
which are predictions of future events (especially future actions to be taken by third parties).” Id.Accordingly, when “the challenged conduct is at best an indirect or contributing cause of the
plaintiff’s injury[,] . . . the plaintiff faces an uphill climb in pleading and proving redressability.”
Id. (cleaned up).
“The starting point in the redressability analysis is necessarily the relief sought.”
Abulhawa v. U.S. Dep’t of Treasury, 239 F. Supp. 3d 24, 36 (D.D.C. 2017). Plaintiffs “request[]
relief that would order the Secretary to . . . ensure reasonable access to the home health aide
services authorized by Medicare law, administer the home health benefit in accordance with the
integration mandate, meaningfully enforce Medicare’s Conditions of Participation regarding
meeting patients’ needs, and ensure that criteria and methods of administration used in audits and
quality rating are non-discriminatory and comport with the integration mandate.” Opp’n at 13;
see also Compl. at 52–56.
9
Plaintiffs do little more than recite the statutory requirements that bind HHS and list
outcomes they hope the agency will achieve. Plaintiffs’ framing of the requested relief at such a
high level of generality is a red flag that they have not met their burden to show redressability.
They largely request “a generalized injunction to obey the law.” United States v. Philip Morris
USA, Inc., 566 F.3d 1095, 1137 (D.C. Cir. 2009). At oral argument, the Court asked Plaintiffs to
clarify what aspects of the program they are seeking to enjoin. Counsel’s most specific answer
was that the Court should make “reasonable modifications” to “the quality rating system and the
auditing practices of the Secretary.” Hr’g Tr. at 3, 5. This “would mean that the needs of people
with chronic and disabling conditions would have to be taken into account in those policies and
practices.” Id. at 5. But counsel never explained what those modifications would look like.
Without knowing the specific changes that Plaintiffs want the Secretary to make, it is
hard to conclude that ruling against the Secretary would make it easier for them to find willing
HHAs. Put differently, when the Court is unsure of what Plaintiffs are asking it to order the
Secretary to do, it necessarily cannot evaluate whether granting that relief would redress the
injuries alleged. Cf. Fed. R. Civ. P. 65(d) (injunctive relief “must” “state its terms specifically”
and “describe in reasonable detail—and not be referring to the complaint or other document—the
act or acts restrained or required”).
The plausibility of Plaintiffs’ theory of redressability suffers from other problems. First,
their theory of causation undercuts their claim that enjoining the Secretary’s auditing practices
would afford them relief. Plaintiffs allege that HHAs are encouraged not to provide aide services
because providing such care risks more frequent audits and potential penalties. At the same
time, Plaintiffs also suggest that the Secretary could help their situation by conducting even more
audits—of both HHAs that do and do not currently provide aide services. See Compl. ¶ 66 (“The
10
Secretary does not regularly audit, review, or monitor the discrepancy between beneficiaries’
service needs and the services that are actually delivered.”). More generally, it is hard to see
how the Secretary should ramp up enforcement of Medicare’s Conditions of Participation
without increasing, or at least maintaining, the current level of oversight. Plaintiffs have not
explained how fewer audits would lead to increased compliance with Medicare’s requirements.
Second, recall that home health aide visits have been on the decline nationally for at least
two decades. But the Star Rating system did not even exist until 2015. Fact Sheet: Quality of
Patient Care Star Rating at 1. The Court is skeptical that relief from the current formula would
reverse a trend that began well before that methodology existed. See Arpaio, 797 F.3d at 24(considering “logic” of redressability).
Those concerns aside, Plaintiffs have not established standing for a more basic reason.
They have not shown that it is “likely, as opposed to merely speculative,” that ruling against the
Secretary will alleviate their difficulty in finding HHAs willing to provide aide services. Lujan,
504 U.S. at 561. The unavoidable fact is that HHAs are independent market participants who
elect whether to accept Medicare case-by-case. See 42 U.S.C. § 1395a(a) (Medicare
beneficiaries may obtain services from an institution “if such institution, agency, or person
undertakes to provide him such services” (emphasis added)). Thus, meddling with the
Secretary’s auditing practices or Star Rating methodology would not stop HHAs from
“exercising their own discretion” to refuse aide services to Plaintiffs. West, 845 F.3d at 1236(cleaned up). Plaintiffs have “offered nothing but speculation that a favorable judicial decision
would alter the [HHAs] independent choices on that score.” Id. (cleaned up).
And “the Supreme Court has made clear that a plaintiff’s standing fails where it is purely
speculative that a requested change in government policy will alter the behavior of regulated
11
third parties that are the direct cause of the plaintiff’s injuries.” Nat’l Wrestling Coaches Ass’n,
366 F.3d at 938.
The Court’s decision in Simon v. Eastern Kentucky Welfare Rights Organization, 426
U.S. 26 (1976), is instructive. There, organizations representing indigent individuals challenged
an IRS decision to give favorable tax treatment to nonprofit hospitals that offered only certain
services to the indigent. 426 U.S. at 28. The Court assumed that “the IRS’s new policy
encourages a hospital to provide fewer services to indigents than it might have under the
previous policy.” Id. at 42 n.23. Even so, the Court rejected as too speculative plaintiffs’
allegation that a return to the old regime would redress their injuries. The Court explained that
“it is just as plausible that the hospitals to which [plaintiffs] may apply for service would elect to
forgo favorable tax treatment to avoid the undetermined financial drain of an increase in the level
of uncompensated services.” Id. at 43. Plaintiffs’ complaint thus could not “even survive a
motion to dismiss.” Id. at 45 n.25. So too here.
This Court credits Plaintiffs’ allegations that the Secretary’s Star Rating methodology
and enforcement of the Conditions of Participation “encourage[]” HHAs not to offer aide
services to patients with chronic conditions. Id. at 42 n.23. But, as in Simon, Plaintiffs cannot
carry their burden without more. “It is purely speculative whether . . . the desired exercise of the
[C]ourt’s remedial powers in this suit would result in the availability to [Plaintiffs] of such
services.” Id. at 42–43. As we will see, even if the Secretary’s practices “provided some
encouragement” to those HHAs that decided not to provide covered aide services, it is just as
plausible those providers would make the same decision given other market forces. Arpaio, 979
F.3d at 21.
12
Indeed, the D.C. Circuit has explained that there are “circumstances in which
governmental action is a substantial contributing factor in bringing about a specific harm, but the
undoing of the governmental action will not undo the harm, because the new status quo is held in
place by other forces.” Renal Physicians Ass’n v. HHS, 489 F.3d 1267, 1278 (D.C. Cir. 2007).
That reasoning applies here.
Consider the “economic . . . realities” of Medicare’s reimbursement scheme. Arpaio, 979
F.3d at 21. HHAs are compensated prospectively based on the expected cost of care rather than
retrospectively based on actual cost. See Compl. ¶¶ 57–59. This is mandated by statute, which
Plaintiffs do not challenge. See 42 U.S.C. § 1395fff. More importantly, aide services are
reimbursed at a fixed rate based on the beneficiary’s expected care needs. See Compl. ¶ 58. The
rates, which Plaintiffs also do not challenge, are updated annually through notice and comment
rulemaking. See id.
Of course, the prospective nature and rate of reimbursement no doubt factors, likely quite
heavily, in an HHA’s business decision whether to accept a Medicare beneficiary. Plaintiffs
themselves suggest that these realities drive HHAs not to offer the services they seek. See Opp’n
at 24 (arguing that “[t]he Secretary . . has authority to use the rulemaking process to ensure that
payment methods and criteria do not deprive Plaintiffs of the aide services” sought).
More, the Court takes judicial notice of the ongoing shortage of home health care
workers. 1 See, e.g., Arpaio, 797 F.3d at 21–22 (examining redressability given other market
1
“[A] court may judicially notice a fact that is not subject to reasonable dispute because it can
be accurately and readily determined from sources whose accuracy cannot reasonably be
questioned.” Johnson v. Comm’n on Presidential Debates, 202 F. Supp. 3d 159, 167 (D.D.C.
2016), aff’d, 869 F.3d 976 (D.C. Cir. 2017) (cleaned up). The nationwide shortage of home
health care workers has been well documented. See, e.g., Christopher Rowland, Seniors Are
Stuck at Home Alone as Health Aides Flee for Higher-Paying Jobs, The Washington Post (Sept.
22, 2022), https://perma.cc/3D69-UVJX.
13
forces); see also Bell Atl. Corp. v. Twombly, 550 U.S. 544, 567 (2007) (explaining that at the
motion to dismiss stage, courts should consider “obvious alternative explanation[s]”). Plaintiffs
do not dispute this fact. See Hr’g Tr. at 11. Though by no means dispositive, this too magnifies
the speculative nature of Plaintiffs’ claim that this Court can remedy their inability to obtain aide
services.
In sum, Plaintiffs have alleged no facts suggesting that it is “likely, as opposed to merely
speculative,” that HHAs would behave any differently with respect to aide services if they
prevail. Lujan, 504 U.S. at 561. While the Secretary’s policies might have contributed to an
HHA’s decision not to provide aide services, so, too, might Medicare’s reimbursement scheme
and labor market. Plaintiffs concede that the shortage of aide care is longstanding, that it is “a
complex situation,” and that “[t]here are multiple factors at work.” Hr’g Tr. at 11. And “[w]hen
conjecture is necessary, redressability is lacking.” West, 845 F.3d at 1237.
B.
Plaintiffs’ arguments to the contrary are unpersuasive. They primarily argue that “[c]ase
law regarding independent third-party market participants is inapposite” because the third parties
here are regulated by the Secretary. Opp’n at 12. That is, the Secretary “routinely takes actions
to influence HHAs’ behavior” given his “duty to administer” Medicare’s home health benefit
“through the[se] third parties.” Id. at 13. According to Plaintiffs, this implies that the Secretary
can necessarily regulate HHAs in a way that will address their injuries. But “one need not adopt
the view that” the Secretary “is totally ineffectual to find that the likelihood of redress is too
speculative.” Nat’l Wrestling Coaches Ass’n, 366 F.3d at 943. And the regulatory framework in
which HHAs are situated does not vitiate Plaintiffs’ burden to show their injuries are redressable.
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The Supreme Court has been clear on this point. When redressability “hinge[s] on the
response of [a] regulated (or regulable) third party to the government action or inaction,” “it
becomes the burden of the plaintiff to adduce facts showing that these choices have been or will
be made in such manner as to . . . permit redressability of the injury.” Lujan, 504 U.S. at 562(emphasis added). So even though this case is about “injuries caused by regulated third parties,”
the Court may only reach the merits of Plaintiffs’ claims if there is “little doubt as to . . . the
likelihood of redress.” Nat’l Wrestling Coaches Ass’n, 366 F.3d at 941 (emphasis added).
Plaintiffs fairly point out that the Secretary “routinely takes actions to influence HHAs’
behavior.” Opp’n at 13. But they have not shown the actions requested here would change the
independent business decisions of HHAs not to accept certain patients. The prospective payment
requirement, reimbursement rates, and labor market surely play into an HHAs’ calculus whether
to offer certain aide services. Plaintiffs “do[] not explain how” their requested relief “would
interact with those and other factors affecting” HHAs’ business decisions. Arpaio, 797 F.3d at
22. So the Court must speculate whether, for instance, tweaking the Secretary’s Star Rating
system or auditing practices would ultimately afford Plaintiffs any relief.
To be sure, the Court could fashion some remedy that might give Plaintiffs “better odds”
of finding willing HHAs. Nat’l Wrestling Coaches Ass’n, 366 F.3d at 939. But it cannot change
HHAs’ discretion under the Medicare statute to choose not to offer aide services to Plaintiffs.
And “a quest for ill-defined ‘better odds’ is not close to what is required to satisfy the
redressability prong of Article III.” Id. Indeed, “it will often be possible to allege with some
plausibility that a change in governmental policy is likely to cause other persons or institutions to
modify their behavior in ways beneficial to the plaintiff.” N.W. Airlines, Inc. v. FAA, 795 F.2d
195, 203 n.2 (D.C. Cir. 1986). If a plaintiff could meet its burden without more, “courts would
15
be thrust into a far larger role of judging governmental policies than is presently the case, or than
seems desirable.” 2 Id.The Court credits Plaintiffs’ allegations that the Secretary, at least at the margins, could
do more to encourage HHAs to provide aide services. It is understandable that they ask the
Secretary to help them obtain the critical services that Medicare covers. But Medicare functions
by reimbursing private entities that choose to participate in the program. It does not guarantee or
provide health care. Tinkering with the Secretary’s oversight of the program would not change
this. Nor would it cabin HHAs’ discretion to accept Medicare for only some, if any, services.
The Court is also mindful of the complex market forces, including Medicare’s fixed
reimbursement scheme, that impact HHAs’ willingness or ability to provide certain services.
At bottom, it is purely speculative that a decision in Plaintiffs’ favor would meaningfully
alter the economic calculus by which HHAs determine whether to offer aide services. “Where
predictions are so uncertain,” the Court is “prohibited from finding standing.” Arpaio, 797 F.3d
at 22.
2
Relying on three out-of-circuit district court decisions, Plaintiffs suggest that Article III’s
redressability requirement is relaxed in Medicare class actions and integration mandate cases.
The Court disagrees. Plaintiffs’ lead case, Jimmo v. Sebelius, No. 11-cv-00017, 2011 WL
5104355, at *16 (D. Vt. Oct. 25, 2011), is inapt. It concerned an alleged “violation of a
procedural right,” and only in the context of a procedural injury will “courts relax—while not
wholly eliminating—the issues of imminence and redressability.” Id. The Court is also
unpersuaded by Parrales v. Dudek, No. 4:15-cv-424, 2015 WL 13373978 (N.D. Fla. Dec. 24,
2015), and Murphy ex rel. Murphy v. Minnesota Department of Human Services, 260 F. Supp. 3d
1084 (D. Minn. 2017). In any event, insofar as these cases suggest that Plaintiffs can meet their
burden with conclusory allegations of redressability at the pleading stage, they conflict with
settled circuit and Supreme Court precedent.
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IV.
For these reasons, the Court concludes that Plaintiffs lack Article III standing and will
grant the Secretary’s motion to dismiss.3
A separate Order will issue today.
2023.04.05
______ 16:10:06 -04'00'
Dated: April 5, 2023 TREVOR N. McFADDEN, U.S.D.J.
3
The Court rejects the Secretary’s argument that it lacks jurisdiction over Plaintiffs’ Medicare
claims for failure to exhaust administrative remedies. Before obtaining judicial review of claims
arising under the Medicare statute, a plaintiff must first (1) present her claim to the Secretary and
(2) fully exhaust all available administrative remedies. See Am. Hosp. Ass’n v. Azar, 895 F.3d
822, 825 (D.C. Cir. 2018). Plaintiffs have adequately presented their claims, and the Court
waives the exhaustion requirement. The organizations submitted letters to the Secretary that
described paying for aide services for discrete amounts for specific constituents that should have
been covered by Medicare. See Compl. ¶¶ 160, 173. The individual Plaintiffs submitted similar
claims to either the Medicare contractors that handle initial determinations for their region or to a
Medicare Advantage plan. See id. ¶¶ 102, 119, 137. And Plaintiffs allege that these letters
raised broader issues about the Secretary’s enforcement of the Medicare statute and its
implementing regulations. See Hr’g Tr. at 42. The Secretary submitted such a letter from the
National MS Society reflecting this. See MS Society Letter, Sept. 9, 2022, ECF No. 25-1.
Plaintiffs thus satisfied the presentment requirement. And though they concededly did not
exhaust their administrative remedies, the Court finds that waiver of exhaustion is appropriate
here. Waiver is justified when a plaintiff’s challenge is “collateral to his claim of entitlement
and he stands to suffer irreparable harm if forced to exhaust his administrative remedies.” Ryan
v. Bentsen, 12 F.3d 245, 248 (D.C. Cir. 1993). The Secretary does not contest that Plaintiffs
have made a colorable showing of irreparable harm. See Reply at 15–16; Hr’g Tr. at 36–37.
And a claim is collateral when it is “not essentially a claim for benefits.” Turnbull v. Berryhill,
490 F. Supp. 3d 132, 141 (D.D.C. 2020). That is true here because Plaintiffs bring programmatic
challenges to the Secretary’s policies and practices; they explicitly do not seek an award of
benefits.
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