JONATHAN A. BLOOM v. ALEX AZAR, SECRETARY, UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES
Docket No. 18-2390-cv
UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT
September 23, 2020
August Term, 2019
(Argued: October 7, 2019 Decided: September 23, 2020)
Bеfore: LIVINGSTON, Chief Judge, LEVAL and LOHIER, Circuit Judges.
Jonathan A. Bloom requested Medicare coverage to offset the costs associated with a device that he uses to treat his diabetes. The Medicare Appeals Council rejected three of Bloom‘s requests. When Bloom sought judicial review of the Appeals Council‘s adverse decisions, the United States District Court for the District of Vermont (Crawford, C.J.) dismissed Bloom‘s suit in part on the ground that the amounts involved in the сhallenged decisions fell below the amount-in-controversy requirement upon which the Medicare Act conditions judicial review, and that Bloom could not “aggregate[]” those amounts to cure that jurisdictional deficiency.
JAMES PISTORINO (Debra M. Parrish, on the brief), Parrish Law Offices, Pittsburgh, PA, (Craig S. Nolan, Alexandrea L. Nelson, on the brief), Sheehey Furlong & Behm P.C., Burlington, VT, for Plaintiff-Appellant Jonathan A. Bloom.
MELISSA A.D. RANALDO, Assistant United Statеs Attorney (Gregory L. Waples, Assistant United States Attorney, on the brief), for Christina E. Nolan, United States Attorney for the District of Vermont, Burlington, VT, for Defendant-Appellee Alex Azar, Secretary, United States Department of Health and Human Services.
Jonathan A. Bloom is a Medicare beneficiary who uses a Continuous Glucose Monitoring device (CGM) to manage his Type I diabetes. Since 2011 Bloom has regularly sought Medicare coverage to offset the costs associated with his CGM. Three times between 2015 and 2017, the Medicare Appeals Council rejected Bloom‘s requests for coverage. Bloom challenged the Appeals Council‘s adverse decisions in federal court, but the United States District Court for the District of Vermont (Crawford, C.J.) dismissed Bloom‘s suit in part. It concluded that two of the three challenged decisions failed to meet the $1,500 amount-in-controversy threshold for federal court jurisdiction under the Medicare Act. It also held that the Medicare Act did not permit Bloom to cure the jurisdictional deficiency by “aggregat[ing]” the three separate amounts at issue in each decision.
I
Jonathan Bloom has been suffering from Type I diabetes for several decades. Bloom‘s diabetes is currently “brittle“—that is, particularly acute—which means that his blood-glucose levels fluctuate “rapidly” every day, sometimes even “unpredictably.” Appellant‘s App‘x 179. And unlike the many diabetics who can tell when their blood sugar is too low, Bloom suffers from “hypoglycemic unawareness,” a condition that makes it is “impossible” for him “to detect when he is experiencing [] unexpected[ly] low” blood sugar. Id. As a result, Bloom has fallen unconscious into a diabetic coma on three separate occasions, two of which were “life threatening.” Special App‘x 4. Since 2006 Bloom has attempted to better manage his diabetes by using a CGM—essentially a tiny sensor that he inserts just under his skin to actively monitor his blood-glucose levels. The CGM evaluates Bloom‘s blood sugar every five minutes, and “warn[s] him of drops in glucose that would lead to [further bouts of] unconsciousness.” Supp. App‘x 87. The device “has markedly improved [Bloom‘s] . . . quality of life and overall safety.” Special App‘x 4.
Bloom sought Medicare coverage for his CGM at least thirteen separate times. On three occasions, the Appeals Council denied Bloom‘s requests for coverage. First, in a decision dated November 13, 2015 (the M-15-1505 decision), the Appeals Council denied Bloom coverage for a thirty-day supply of disрosable CGM sensors valued at $473. Second, in a decision dated February 24, 2016 (the M-15-4332 decision), the Appeals Council denied Bloom‘s claim for coverage of a CGM transmitter and two sets of disposable CGM sensors, which cost a total of $1,976. Finally, in a decision dated January 27, 2017 (the M-16-10554 decision), the Appeals Council denied Bloom coverage for a ninety-day supply of disposable CGM sensors, totaling $1,419. With respect to each denial, the Appeаls Council concluded that Bloom‘s CGM was “precautionary” in nature and thus failed to serve a “primary medical purpose.” Appellant‘s App‘x 73 (M-15-4332 decision), 185 (M-15-1505 decision), 270 (M-16-10554 decision).
II
In 2016 Bloom filed this lawsuit against the agency responsible for overseeing the Appeals Council, the Department of Health and Human Services (HHS), to challenge the three decisions denying coverage. See generally
This appeal followed.
DISCUSSION
I
At issue in this appeal are the Appeals Council‘s M-15-1505 and M-16-10554 decisions denying Bloom‘s claims. There is no dispute that these decisions present common questions of law and fact. Bloom argues
A
We begin with the language of the Medicare Act, which contains two provisions that are directly relevant to our resolution of this appeal.
The first provision states that “[a] hearing . . . shall not be available to an individual . . . if the amount in controversy is less than $100, and judicial review shall not be available to the individual if the amount in controversy is less than $1,000.”
The second provision at issue in this appeal directs that “[i]n determining the amount in controversy, the Secretary [of HHS], under regulations, shall allow two or more appeals to be aggregated if the appeals involve” “the delivery of similar or related services to the same individual by one or more providers of services or suppliers.”
So long as each Medicare claim before the district court satisfies these conditions, the tеxt of
The District Court, relying on the fact that
We disagree with the District Court‘s interpretation of
Even if we agreed with the District Court that
First, the Government notably does not rely on expressio unius to press its argument on appeal. And second, the canon in any event has its limits. The Supreme Court has explained that the “force of any negative implication” derived from expressio unius “depends on context.” Id. (quotation marks omitted). Expressio unius thus applies only when “it is fair to suppose that Congress considered the unnamed possibility and meant to say no to it,” Barnhart v. Peabody Coal Co., 537 U.S. 149, 168 (2003), that is, “when circumstances support[] a sensible inference that the term left out must have been meant to be excluded,” NLRB, 137 S. Ct. at 940 (quotation marks omitted); see Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 107 (2012) (“Virtually all the authorities who discuss [expressio unius] emphasize that it must be applied with great caution, since its application depends so much on context.“).1
the context in which the relevant statutory language was forged. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 144 (2000).
B
In 1986 Congress codified in the Medicare Act аn early version of the agency aggregation provision at issue in this case. See Omnibus Budget Reconciliation Act of 1986, Pub. L. No. 99-509, sec. 9341, 100 Stat. 1874, 2037–38. HHS proposed a set of rules to implement that provision. One of these rules provided:
(a) The determination as to whether the amount in controversy is—
(1) $100 or more is made by the presiding officer;
(2) $1,000 or more is made by the reviewing court.
(b) In determining the amount in controversy, the presiding officer and the reviewing court, as appropriate, also make the determination as to what constitutеs similar or related services and common issues of law and fact.
Medicare Program; Aggregation of Medicare Claims and Administrative Appeals and Judicial Review, 56 Fed. Reg. 28,353, 28,359 (June 20, 1991) [hereinafter “1991 Proposed Rule“] (quotation marks omitted). As early as 1991, therefore, HHS recognized that “reviewing court[s]” could aggregate similar Medicare claims to determine the amount in controversy in Medicare cases. Id. Three years later, when the notice-and-comment period for the proposed rules concluded, HHS again acknowledged that the Medicare Act permitted district courts to aggregate similar Medicare claims:
[T]he statute does not require the courts to follow the administrative aggregation rules established by [HHS] for determining the amount in controversy. However, the courts may wish to use the administrative rules as a reference point for determining the amount in controversy at the judicial level.
Medicare Program; Aggregation of Medicare Claims for Administrative Appeals, 59 Fed. Reg. 12,172, 12,174 (Mar. 16, 1994) [hereinafter “1994 Statement and Rule“]. Consistent with this interpretation, HHS promulgated the following rule in 1994: “[W]hen a civil action is filed, [HHS] may assert that [its regulatory] aggregation principles . . . may be applied to determine the amount in controversy for judicial review.” Id. at 12,182. That new rule would have been entirely unnecessary had HHS believed that courts could not aggregate Medicare claims under
At various times, then, HHS has either openly supported the aggregation of claims to trigger judicial review, see 1991 Proposed Rule, 56 Fed. Reg. at 28,359 (lodging power in “the reviewing court“), or attempted to confine the statutory authority
We presume that Congress was aware of HHS‘s position on this central issue of judicial authority to aggregate Medicare claims when, in 2000, it last amended the aggregation and amount-in-controversy language of
[if] contested amounts are greater than $100, an individual would be able to appeal an adverse reconsideration decision by requesting a hearing by the Secretary . . . . If the dispute is not satisfactorily resolved through this administrative process, and if contested amounts are greater than $1,000, the individual would be able to request judicial review . . . . Aggregation of claims to meet these thresholds would be permitted.
H.R. Rep. No. 106-1033, at 895 (2000) (Conf. Rep.) (emphasis added).
The Report (and the emphasized language in particular) thus strongly suggests that the amendment‘s drafters sought to permit aggregation in both the administrative and the judicial contexts. The Report‘s use of the plural “these thresholds” when referencing aggregation can only refer to the separate amount in controversy “thresholds” for administrative and judicial review mentioned in the prior sentences. Id.
In considering the foregoing history, we must presume that Congress acted against the prevailing regulatory backdrop relating to judicial aggregation. See Brown & Williamson Tobacco Corp., 529 U.S. at 144; New York v. U.S. Dep‘t of Homeland Sec., 969 F.3d 42, 70–74 (2d Cir. 2020). We have already described HHS‘s repeated acknowledgments that judicial aggregation of Medicare claims is permissible. Congress would have been aware of HHS‘s position prior to 2000 as it considered whether claims could be aggregated for judicial review. See Lorillard v. Pons, 434 U.S. 575, 580–81 (1978).
HHS‘s view persisted aftеr the congressional amendments. In 2005 HHS promulgated a rule that “[t]o be entitled to judicial review, a party must meet the amount in controversy requirements of this subpart at the time it requests judicial review.” Medicare Program: Changes to the Medicare Claims Appeal Procedures, 70 Fed. Reg. 11,420, 11,486 (Mar. 8, 2005) [hereinafter “2005 Rule“]. This rule, which HHS argues limits beneficiaries from “aggregat[ing] claims . . . after the ALJ stage of review,” Appellee‘s Br. 26, clearly presumes that plaintiffs may aggregate their Medicare claims in court to meet
In sum, HHS has long had the view that district courts enjoy an independent ability to aggregate claims under the Medicare Act, while Congress, which we presume was aware of HHS‘s position, has said nothing that would disturb that view. This backdrop of legislative and rеgulatory history confirms what the Medicare Act‘s text itself makes clear enough: “[a]ggregation of claims to meet” the Act‘s amount-in-controversy requirement for judicial review is “permitted.” H.R. Rep. No. 106-1033, at 895.
III
In urging a contrary conclusion, HHS claims that permitting judicial aggregation would render aggregation before the agency superfluous. But a quick example shows why this is wrong. Suppose a Medicare beneficiary had two claims, each for $51. Without aggrеgating both claims at the agency level, the beneficiary would not be entitled to a hearing before an ALJ on either claim. See
HHS also submits that its interpretation of the Medicare Act “represents a permissible construction of the statute entitled to deference under” either Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984), or Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 (1945). Again, we disagree.
Starting with Chevron deference, the agency clаims that the regulatory provisions that govern the aggregation of claims before an ALJ, see 42 C.F.R. § 405.1006(e)–(f), “do not provide a means for a beneficiary to aggregate claims in the first instance after the ALJ stage of review,” Appellee‘s Br. 26. But whether or not these regulatory provisions now create a means to aggregate claims is irrelevant to the principal question of statutory interpretation before us, which is whether aggregation is pеrmissible under the Medicare Act. HHS‘s regulations do not answer whether claims must be aggregated before the agency as a precondition to aggregation before a district court, or whether claims may be aggregated before the district court at all. So even if we were inclined to defer to HHS‘s regulations under Chevron, deference would make no difference to our resolution of this appeal.2 In any event, deference to HHS‘s aggregatiоn regulations would be inappropriate even if they answered the question presented since we hold that Congress already “has directly spoken,” Chevron, 467 U.S. at 842,
For similar reasons, HHS‘s interpretation of its own regulation is not entitled to deference under Seminole Rock. Since the statute provides for aggregation before the district court, we do not owe deference to an HHS interpretation adopting a contrary rule.
IV
This brings us to a few important points about the limitations of our holding. The first point relates to the exhaustion requirement involving Medicare claims. Beneficiaries may not obtain judicial review of claims, whether individual or aggregated, that were not previously adjudicated before and finally decided by the agency (for example, claims of less than $100 that were not aggregated before the agency). See
With these limits in mind, we hold that the Medicare Act does not prohibit Bloom from aggregating his claims for the first time in district court. Our conclusiоn rests on the text of the Medicare Act, as reinforced by its regulatory and legislative history. Because we conclude that the Medicare Act permits Bloom to aggregate his claims before the District Court, we do not address Bloom‘s alternative argument that the District Court should have exercised supplemental jurisdiction over the M-15-1505 and M-16-10554 decisions. See
CONCLUSION
For the foregoing reasons, we VACATE the District Court‘s judgment and REMAND for proceedings consistent with this oрinion.