Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 1 of 21
`
`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF MARYLAND
`
`
`
` :
`
`
`
`
`RUTH E. KANTOR, M.D.,
`
`
`
`
`
`
` :
`
`
`v.
`
`
`
` : Civil Action No. DKC 20-2475
`
`
`
`
`
`
`
` :
`XAVIER BECERRA,1 in his
`official capacity as Secretary :
`of the Department of
`Health and Human Services :
`
`MEMORANDUM OPINION
`Presently pending and ready for resolution in this action for
`judicial review of an adverse agency decision is Defendant’s Motion
`to Dismiss (ECF No. 12). The issues have been fully briefed, and
`the court now rules, no hearing being deemed necessary. Local
`Rule 105.6. For the following reasons, the motion to dismiss will
`be denied and the parties will be directed to show cause why the
`case should not be remanded.
`I.
`Background
`The following facts are derived from the administrative
`record preceding this appeal and the pleadings.
`A.
`The Statutory and Regulatory Framework
`Medicare is a federally funded health insurance program for
`the elderly and disabled. It is governed by Title XVIII of the
`
`
`1 The complaint named Alex M. Azar, former Secretary of Health
`and Human Services (“HHS”) as Defendant. (ECF No. 1). As of the
`time of the filing of this opinion, Xavier Becerra now serves as
`HHS Secretary (“Secretary”). Pursuant to Fed.R.Civ.P. 25(d),
`Secretary Becerra is automatically substituted as a party to this
`action.
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 2 of 21
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`Social Security Act, codified at 42 U.S.C. §§ 1395-1395gg. The
`Centers for Medicare & Medicaid Services (“CMS”) of the United
`States Department of Health and Human Services (“HHS”) is
`responsible for administering the Medicare Program, which consists
`of four basic parts, Parts A through D. Part B of the Medicare
`Program (“Part B”) authorizes payment for “medical and other health
`services” including certain out-patient prescription drugs.
`42 U.S.C. § 1395k. This case concerns Part B because it involves
`the out-patient administration of a prescription cancer-treatment
`drug. Physicians who provide services under Part B (“providers”)
`may submit claims to Medicare for reimbursement for the costs of
`purchasing and administering out-patient prescription drugs found
`to be “reasonable and necessary for the diagnosis and treatment of
`illness[.]” 42 U.S.C. § 1395y(a).
`B.
`The Medicare Payment System and Appeals Process
`The Part B reimbursement system is administered by CMS in
`conjunction with private contractors known as Medicare
`Administrative Contractors (“MACs”). See 42 U.S.C. § 1395kk–1.
`MACs typically authorize payment of claims immediately upon
`receipt of the claims, so long as such claims do not contain
`obvious irregularities. Later, post-payment audits may be
`conducted either by MACs or by independent auditors. See Medicare
`Program Integrity Manual, CMS Pub. No. 100–08, Ch. 3, § 3.2.2. If
`billing irregularities are discovered in a post-payment audit,
`overpayments are assessed and recouped from the provider. See 42
`2
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 3 of 21
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`C.F.R. §§ 405.370, 405.371(a)(2). A provider who disagrees with
`an overpayment assessment is entitled to five levels of
`administrative review: (1) a redetermination by a MAC employee
`not involved in the initial overpayment determination, see id. §§
`405.940-405.958; (2) a reconsideration by a Qualified Independent
`Contractor (“QIC”), see id. §§ 405.960, 405.976(b); (3) a hearing
`before an Administrative Law Judge (“ALJ”), see id. §§ 405.1000,
`405.1002(a); (4) de novo review by the Medicare Appeals Council
`(the “Council”),2 either at the request of the provider, by
`referral from a MAC, or upon the Council’s own motion, see id. §§
`405.1100, 405.1102(a), 405.1110; and (5) judicial review in
`federal court, see 42 U.S.C. § 405(g).
`C.
`Factual and Procedural Background
`
`Plaintiff, Dr. Ruth E. Kantor (“Dr. Kantor”), is a medical
`doctor practicing in oncology and internal medicine in Baltimore,
`Maryland. Between February 2010 and August 2012, Plaintiff
`purchased and administered seventeen doses of Avastin, an
`injectable cancer treatment drug, to her terminally ill cancer
`patient, Paulette D. Witherspoon. Dr. Kantor then submitted claims
`for reimbursement for such costs to Medicare, which totaled
`approximately fifty thousand dollars. Initially, the claims were
`approved and Dr. Kantor’s expenses were reimbursed. It was
`
`
`2 The Council’s decision becomes the Secretary’s decision and
`is the final agency decision for purposes of judicial review. See
`42 C.F.R. § 405.1136(d).
`3
`
`
`

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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 4 of 21
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`subsequently determined, however, during a post-payment audit that
`Dr. Kantor was not entitled to reimbursement for the funds that
`she had expended on Ms. Witherspoon’s behalf. Disagreeing with
`this decision, Dr. Kantor initiated the five-level administrative
`appeals process, culminating in her filing of the instant complaint
`in this court requesting judicial review of the Secretary’s
`decision. (ECF No. 1).
`While the parties have not formally moved for summary
`judgment, the Secretary produced and filed the administrative
`record in this case on November 4, 2020. (See ECF Nos. 11-1 – 11-
`3). Because, as detailed below, the court may only consider the
`administrative record in making its determination in this case,
`see Camp v. Pitts, 411 U.S. 138, 142 (1973), the case is ripe for
`disposition and the court now rules on the basis of the
`administrative record alone. The arguments advanced by the parties
`in the context of the motion to dismiss for failure to exhaust
`administrative remedies in reality address the ultimate question,
`whether the agency’s determination was arbitrary and capricious.
`II. Judicial Review of the Secretary’s Decision
`
`The Medicare Act provides for judicial review
`of final decisions by the Secretary of Health
`and Human Services regarding benefits paid
`under Medicare Part B. 42 U.S.C.
`§§ 1395ff(a),(b). Review is to be based
`solely on the administrative record. 42
`U.S.C. § 405(g) (incorporated by reference in
`42 U.S.C. § 1395ff(b)(2)(a)). Review of the
`Secretary’s decision is governed, moreover, by
`the Administrative Procedure Act, 5 U.S.C. §§
`701–706, which provides that the Agency’s
`4
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 5 of 21
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`decision will be set aside only if it found to
`be “arbitrary and capricious, an abuse of
`discretion, or otherwise not in accordance
`with the law . . . or unsupported by
`substantial
`evidence.”
`
`5
`U.S.C.
`§ 706(2)(A),(E); Natural Resources Defense
`Council v. U.S. Environmental Protection
`Agency, 16 F.3d 1395, 1400 (4th Cir. 1993).
`
`MacKenzie Med. Supply, Inc. v. Leavitt, 419 F. Supp. 2d 766, 770
`(D.Md. 2006), aff’d, 506 F.3d 341 (4th Cir. 2007). “Because the
`facts are restricted to those in the administrative record, the
`court here is primarily concerned with issues of law.” Id. “[I]t
`is the [c]ourt’s role to ‘determine whether or not as a matter of
`law the evidence in the administrative record permitted
`the agency to make the decision it did.’” Abington Mem’l Hosp. v.
`Burwell, 216 F. Supp. 3d 110, 129 (D.D.C. 2016) (quoting Styrene
`Info. & Research Ctr., Inc. v. Sebelius, 944 F.Supp.2d 71, 77
`(D.D.C. 2013)). “In short, when a district court reviews agency
`action, it ‘sits as an appellate tribunal, and [t]he entire case
`on review is a question of law.’” Id. (quoting Am. Bioscience,
`Inc. v. Thompson, 269 F.3d 1077, 1083 (D.C. Cir. 2001)).
`In determining whether agency action is arbitrary and
`capricious, the reviewing court must “consider whether an agency’s
`decision was based on a consideration of the relevant factors and
`whether there has been a clear error of judgment.” Motor Vehicle
`Mfrs. Ass’n v. State Farm Mutual Auto. Ins. Co., 463 U.S. 29, 43
`(1983). At a minimum, the agency must have considered relevant
`
`
`
`5
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 6 of 21
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`data and articulated an explanation establishing a “rational
`connection between the facts found and the choice made.” Id.
`An agency action usually is arbitrary or
`capricious if the agency has relied on factors
`which Congress has not intended it to
`consider, entirely failed to consider an
`important aspect of the problem, offered an
`explanation for its decision that runs counter
`to evidence before the agency, or is so
`implausible that it could not be ascribed to
`a difference in view or the product of agency
`expertise. [State Farm, 463 U.S. at 43]; see
`also County of L.A. v. Shalala, 192 F.3d 1005,
`1021 (D.C. Cir. 1999) (explaining that
`“‘[w]here the agency has failed to provide a
`reasoned explanation, or where the record
`belies the agency’s conclusion, [the court]
`must
`undo
`its
`action.’”).
`
`Fund for Animals v. Williams, 391 F. Supp. 2d 132, 136 (D.D.C.
`2005).
`III. Analysis
`
`A.
`Findings from the Administrative Record
`Plaintiff’s efforts to exhaust her administrative remedies
`from the initial overpayment determination through the filing of
`her complaint in district court are as follows. Dr. Kantor
`submitted a claim to Medicare for reimbursement for the costs of
`administering seventeen injections of Avastin to Ms. Witherspoon.
`Initially, reimbursement was authorized. During a subsequent
`third-party audit, however, it was determined that Dr. Kantor
`should not have been reimbursed for any of the seventeen
`injections. Accordingly, on May 14, 2014, CMS sent Dr. Kantor a
`notice requesting that she refund the auditor identified
`overpayment. On July 21, 2014, CMS sent Dr. Kantor a follow-up
`6
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 7 of 21
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`notice informing her that the debt was delinquent and would soon
`be offset by deducting funds from reimbursement payments owed to
`her for treatment of other patients. (AR99-101).3 Plaintiff
`disagreed that she was not entitled to reimbursement and initiated
`the five-level administrative appeals process.
`1.
`First Level of Appeal: Redetermination by a MAC
`
`Plaintiff, through her billing service, first requested a
`redetermination of the overpayment decision to the regional MAC,
`Novitas Solutions, Inc. (“Novitas”). After much back and forth,
`Novitas determined that the first purchase was eligible for
`reimbursement but stated that it could no longer work on the case
`and never issued a decision regarding the remainder and did not
`issue a written decision. (See AR125-26).4
`2.
`Second Level of Appeal: Reconsideration by a QIC
`Thus, on August 20, 2014, Plaintiff filed a request for
`reconsideration with the QIC, C2C Solutions, Inc. (“C2C
`
`
`3 Citations to “AR” refer to the administrative record, (ECF
`Nos. 11-1 – 11-3).
` The communications between Plaintiff and Novitas at the
`first-level redetermination stage do not appear in the
`administrative record. The record, however, does contain a letter
`from Plaintiff’s attorney to the QIC recounting the details of
`what transpired at this stage. (See AR125-26). Plaintiff clearly
`initiated the first-level appeal but claims that the MAC failed
`ever to provide her with a written decision as required in 42
`C.F.R. § 405.956(a)(1). (See 42 C.F.R. § 405.956(a)(1)) (“Written
`notice of a redetermination affirming, in whole or in part, the
`initial determination must be mailed or otherwise transmitted to
`all parties at their last known addresses in accordance with the
`time frames established in § 405.950.”).
`7
`
`
` 4
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 8 of 21
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`Solutions”). (AR137). On September 8, 2014, C2C Solutions sent
`Dr. Kantor a notice informing her that her request for
`reconsideration had been dismissed because it did not contain the
`correct Medicare health insurance claim numbers for Ms.
`Witherspoon. (AR111). The notice further stated that Dr. Kantor
`could refile her request with the necessary information. Dr.
`Kantor responded on September 24, 2014, with a list of corrected
`claim numbers. (AR117). On October 3, 2014, upon receipt of the
`corrected information, C2C Solutions sent Dr. Kantor a notice
`stating that it was vacating its September 8, 2014 dismissal and
`reopening the case. (AR88).
`On October 9, 2014, C2C Solutions reached out to Novitas
`requesting the redetermination casefile below. Novitas returned
`a “Redetermination Case File Request” indicating that each of
`Plaintiff’s claims lacked a redetermination decision. (AR120-21).
`On October 20, 2014, C2C Solutions reached out to Novitas again
`with a “Second Request” for the casefile and instructed Novitas to
`send its response within twenty-four hours. Novitas returned the
`form stating that it was duplicative of the casefile request sent
`on October 9, 2014. (AR122-124).
`On November 18, 2014, C2C Solutions sent Dr. Kantor a notice
`stating that her request for reconsideration had again been
`dismissed-this time because there was not a redetermination (first
`
`
`
`8
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 9 of 21
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`level of appeal) conducted by Novitas below.5 (AR84-85). The
`notice stated that Plaintiff must first appeal to Novitas, and
`critically, that, if she disagreed with the dismissal, she had two
`options:
`
`1. If you think you have good and sufficient
`cause or we have made an error, you may ask us
`to vacate our dismissal in accordance with 42
`[C.F.R.] § 405.972(d). We will vacate our
`dismissal if we determine you have good and
`sufficient cause. If you want to request that
`we vacate this dismissal, you must file a
`request within 6 months of the date of this
`notice. In your request, please explain why
`you believe you have good and sufficient
`cause. . . .
`2. If you think we have incorrectly dismissed
`your request (for example, you believe that a
`redetermination was conducted), you may
`request a hearing by an Administrative Law
`Judge (ALJ) pursuant to 42 [C.F.R.] Section
`405.1004. The amount in controversy must be
`over $140, and your request must be filed
`within sixty days of receipt of this letter.
`The ALJ will have 90 days to complete the
`review. In your request, please explain why
`you believe the dismissal was incorrect. The
`ALJ’s review will be limited to whether the
`dismissal was appropriate based on the
`evidence in the case at the time of the QIC’s
`review. If the ALJ determines that that QIC’s
`dismissal was in error, he or she vacates the
`dismissal and remands the case to the QIC for
`a reconsideration.
`
`(AR84-85). Because Novitas made clear that Novitas could no longer
`work on the case, Dr. Kantor believed she had done all she possibly
`
`
`5 Presumably, C2C Solutions reached this conclusion based on
`the response Novitas sent on October 9, 2014 stating that the
`claims lacked a redetermination decision. See 42 C.F.R.
`§ 405.972(b)(6)) (“A QIC dismisses a reconsideration request . . .
`[w]hen the contractor has not issued a redetermination on the
`initial determination for which a reconsideration is sought.”).
`9
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 10 of 21
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`could at the redetermination stage and therefore, had good and
`sufficient cause for requesting vacatur of the QIC’s dismissal.
`Thus, Dr. Kantor, through her attorney, requested that C2C
`Solutions vacate its dismissal.6 The May 11, 2015 request, titled
`“Request that the November 18, 2014 Dismissal be Vacated” stated:
`I represent Dr. Ruth Kantor. In a letter dated
`November 18, 2014 . . . Dr. Kantor was informed
`that her “request for reconsideration has been
`dismissed,” and that she has the right to
`“file a request [that the dismissal be
`vacated] within 6 months of the date of this
`notice.” On behalf of Dr. Kantor, for the
`following reasons, I respectfully request that
`the dismissal be vacated . . . Dr. Kantor is
`entitled to reimbursement for the expenses she
`incurred while treating a cancer patient named
`Paulette D. Witherspoon . . . At some point,
`however, an employee of Performance Recovery,
`Inc. (a company hired by Medicare to audit
`claims for reimbursement) concluded that Dr.
`Kantor should not have been reimbursed . . .
`Dr. Kantor’s billing service noted an appeal
`on her behalf, and provided appropriate
`documentation to Novitas Solutions, Inc.
`After
`being
`provided
`with
`everything
`requested, Novitas informed Dr. Kantor’s
`billing service that her appeal had been
`transferred
`to
`C2C
`Solutions,
`Inc.
`Thereafter, Dr. Kantor’s billing service was
`notified that the denial of Dr. Kantor’s
`claims was being upheld based upon the medical
`
`6 In her complaint, Dr. Kantor asserts that she initially
`requested that C2C Solutions vacate its dismissal on December 8,
`2014 and that the May 11, 2015 request for vacatur was a follow-
`up request. While Dr. Kantor attaches a copy of the purported
`December 8th letter to her complaint, (see ECF No. 1-3), it does
`not appear in the administrative record. The government argues
`that the court cannot consider this letter because it is not part
`of the formal administrative record. While correct, this argument
`is of no consequence because the May 11, 2015 letter is contained
`in the administrative record and was timely. Thus, the existence
`of the December 8, 2014 letter is not dispositive of any relevant
`issue in this case.
`10
`
`
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`

`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 11 of 21
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`notes, and that the claims were being returned
`to Novitas . . . [and] ultimately [she was]
`informed by Debbie Conrad- a Novitas employee-
`that Novitas could no longer work on this
`case.
`
`(AR125-26). Critically, C2C Solutions improperly characterized
`this request for vacatur as a “request for reconsideration.”
`Accordingly, on June 11, 2015, C2C Solutions sent Dr. Kantor a
`notice stating that it had received her “reconsideration request”
`and “ha[d] determined that this request [wa]s a duplicate
`submission of the request for reconsideration that led to the
`November 18, 2014 dismissal.” (AR82). The notice did not attach
`a copy of the original request for reconsideration that C2C
`Solutions believed was duplicated. Despite C2C Solution’s
`labeling, however, it was clear that Dr. Kantor’s May 11th letter
`was not a duplicate request for reconsideration. The letter stated
`multiple times throughout that Dr. Kantor was seeking vacatur of
`the November 18, 2014 dismissal. Because C2C Solutions mistakenly
`characterized Dr. Kantor’s request for vacatur as a duplicate
`request for reconsideration, no new appeal rights were provided.
`Dr. Kantor’s claim had seemingly reached a dead end as C2C
`Solutions indicated it would take no further action on the matter.7
`3.
`Third Level of Appeal: Decision by an ALJ
`Lacking any instruction on how to appeal this assertedly
`incorrect decision, Dr. Kantor filed a request for an ALJ hearing
`
`
`7 While the import of the letter as a request to vacate the
`dismissal is unmistakable, Dr. Kantor’s attorney unfortunately
`11
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 12 of 21
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`on August 5, 2015. (AR55-60 & 129-40). The assigned ALJ took no
`action on the matter for four years. Finally, on August 7, 2019,
`the ALJ ordered dismissal stating that Dr. Kantor’s request for a
`hearing was untimely. The ALJ concluded that the request was
`untimely because it was not filed within 60 days of the November
`18, 2014 QIC dismissal notice:
`In this case, the reconsideration was issued
`on November 18, 2014. The appellant’s request
`for hearing was received on August 6, 2015,
`which was more than 60 calendar days after the
`date of presumed receipt and is not timely
`. . .
`The appellant did not provide a reason for the
`untimely filing of the request for hearing,
`and there is no indication of any limitations
`that
`prevented
`the
`appellant
`from
`understanding the need to timely file the
`appeal, or from doing so. As a result, there
`is insufficient evidence to establish good
`cause within the meaning of 42 C.F.R. [§]
`405.942(b)(2) and (3) to extend the time
`period to file the request for hearing.
`
`
`(AR10).
`
`
`concluded the request by stating: “Please contact me at your
`convenience if there are any materials that you need in order to
`decide this request for reconsideration, or if there is anything
`else that I can do to be of assistance.” (AR126). In addition,
`the second to last paragraph of the request stated: “Under the
`circumstances, I request that C2C Solutions, Inc. (1) grant this
`motion for reconsideration, (2) review the medical documentation
`mailed (and faxed) to Novitas on several occasions by Dr. Kantor’s
`billing service-or direct that Novitas conduct such a review, and
`(3) conclude that Dr. Kantor is entitled to reimbursement of the
`expenses she incurred on behalf of Paulette D. Witherspoon.”
`(Id.). The context of the letter, however, made clear that any
`references to “reconsideration” were intended to mean that C2C
`Solutions should reevaluate its decision to dismiss Dr. Kantor’s
`appeal.
`12
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 13 of 21
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`Fourth Level of Appeal: Review by the Medicare Appeals
`4.
`Council
`Plaintiff appealed the ALJ’s dismissal to the Medicare
`Appeals Council (“Council”) on October 4, 2019. (See AR04-08)
`(ALJ Appeal No. 1-3599522967). The Council found that Plaintiff
`lacked a right to review because the ALJ had dismissed her case
`without ruling on the merits. See 42 C.F.R. § 405.1102(c) (“A
`party does not have the right to seek Council review of an ALJ’s
`. . . dismissal of a request for review of a QIC dismissal.”).
`Accordingly, on June 25, 2020, the Council dismissed Plaintiff’s
`request for review. (See AR01-03). The Council’s dismissal notice
`stated that Plaintiff could request judicial review within sixty
`days of receipt of the notice, and that such notice is presumed
`received within five days after its issue date per 42 C.F.R.
`§ 405.1136(c)(2). Accordingly, Plaintiff had until August 30,
`2020 to request judicial review. (Id.).
`5.
`Fifth Level of Appeal: Judicial Review in Federal
`District Court
`
`On August 27, 2020, Plaintiff filed a timely complaint for
`judicial review of agency action in the United States District
`Court for the District of Maryland. Plaintiff’s complaint alleges
`that she was incorrectly found to have received overpayment from
`Medicare and that subsequently, her claims were improperly
`rejected on procedural grounds. (ECF No. 1).
`
`
`
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 14 of 21
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` Motion to Dismiss for Failure to Exhaust Administrative
`B.
`Remedies
`The Secretary moves to dismiss arguing that Plaintiff has
`failed to state a claim under Fed.R.Civ.P. 12(b)(6) because she
`failed to exhaust her administrative remedies and has not received
`a “final decision” of the Secretary “made after a hearing” as
`required to obtain judicial review under 42 U.S.C. § 405(g).8 The
`Secretary contends that:
`[J]udicial review of the denial of claims for
`Medicare reimbursement . . . requires a “final
`decision” of the Secretary . . . which, in
`turn requires both presentment of a claim and
`exhaustion of administrative remedies. See 42
`U.S.C. § 1395ff(b)(1)(A). A dismissal on
`procedural grounds, however, is not considered
`an appealable “final decision” because it does
`not address the merits of the claim.
`Plaintiff failed to exhaust her administrative
`remedies because the decision below [by the
`ALJ and later, the Council] turned on
`procedural grounds[,] . . . [a]s a result, the
`Secretary has not issued a decision on the
`merits . . . and thus, there is no final
`decision that can serve as the basis for
`judicial review.
`
`
`
`8 42 U.S.C. § 1395ff(b)(1)(A) provides that “any individual
`dissatisfied with any initial determination . . . shall be entitled
`to reconsideration of the determination, and subject to [time
`limits and amount in controversy requirements], to judicial review
`of the Secretary’s final decision after such hearing as is provided
`in section 405(g) of this title.” 42 U.S.C. § 405(g) provides
`that: “Any individual, after any final decision of the Commissioner
`of Social Security made after a hearing to which he was a party,
`irrespective of the amount in controversy, may obtain a review of
`such decision by a civil action commenced within sixty days after
`the mailing to him of notice of such decision or within such
`further time as the Commissioner of Social Security may allow.”
`14
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 15 of 21
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`(ECF No. 12-1, at 1-2). In Smith v. Berryhill, the Supreme Court
`held that “a dismissal by the Appeals Council on timeliness grounds
`after a claimant has received an ALJ hearing on the merits
`qualifies as a final decision . . . made after a hearing for
`purposes of allowing judicial review under § 405(g).” Smith v.
`Berryhill, 139 S. Ct. 1765, 1774 (2019). The Secretary
`acknowledges, however, that the Court “expressly declined to
`address the situation presented here” where a claimant “faltered
`at an earlier step-e.g., [their] request for an ALJ hearing was
`dismissed as untimely and [claimant] then appealed that
`determination to the Appeals Council before seeking judicial
`review.” (ECF No. 12-1, at 10-11) (citing id., at 1777 n.17).
`Nonetheless, the Secretary argues that “courts considering similar
`facts have continued to find that dismissals based on procedural
`default without a hearing should be dismissed.” (Id., at 11).
`The cases cited by the Secretary did not involve similar
`facts. The first case cited by the Secretary is Lane v. Azar, No.
`CV GLR-19-03183, 2020 WL 3498157 (D.Md. June 29, 2020), appeal
`dismissed, No. 20-1757, 2020 WL 7977732 (4th Cir. Sept. 10, 2020).
`There, the plaintiff was a doctor on the verge of defaulting on
`several government-subsidized educational loans. To avoid
`exclusion from Medicare, Medicaid, and all other federal health
`care programs as a penalty for non-payment, plaintiff executed an
`agreement in 1999 with the United States Attorney’s Office in which
`he agreed to make monthly payments toward the loans. He further
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 16 of 21
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`agreed that if he defaulted, he waived “all procedural rights,
`including but not limited to notice, hearing, appeal and
`administrative and judicial review[.]” (Id., at 2). When he
`subsequently defaulted nearly twenty years later in 2018 and sought
`an ALJ hearing, his request was dismissed as untimely. His
`subsequent appeal to the Council was also dismissed. The district
`court dismissed the case finding plaintiff had failed to exhaust
`his administrative remedies by failing to request an ALJ hearing
`in 1999. In the second case cited by the Secretary, David W. o/b/o
`K.M.W. v. Comm’r, Soc. Sec. Admin., No. CV SAG-18-3632, 2020 WL
`417392, at *1 (D.Md. Jan. 27, 2020), aff’d sub nom. Wilkins v.
`Comm’r of Soc. Sec., 801 F. App’x 184 (4th Cir. 2020), reh’g denied
`(June 15, 2020), the plaintiff sought judicial review of a decision
`by the Commissioner of Social Security to delay payment of benefits
`to plaintiff’s minor son until a representative payee was found to
`receive payments on the minor’s behalf. Without ever requesting
`reconsideration, the plaintiff attempted to obtain judicial review
`of the decision in district court. The district court promptly
`dismissed, finding that the plaintiff had failed to exhaust his
`administrative remedies. While the plaintiffs in the cases cited
`by the Secretary undoubtedly lacked good cause for extending the
`filing deadline, the same is not true in the instant case because,
`as discussed above, the record demonstrates that Dr. Kantor fully
`complied with the instructions given to her at each stage of the
`administrative process. She did not sit on her heels, allow the
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`deadline to lapse, and then seek review. Likewise, neither of the
`cases involves a scenario in which the plaintiff received
`incomplete and misleading information by the administrative
`contractors below.9
`Essentially, the Secretary asks the court to accept the
`conclusion that, if a claimant exercises her right to request
`vacatur of a QIC dismissal and that request is denied-or is
`disregarded because of an administrative error as is the case here-
`she has waived her right to appeal to an ALJ and has no further
`recourse. The court cannot accept this conclusion because doing
`so would unfairly penalize Dr. Kantor for following the precise
`instructions given to her by the QIC and for the ALJ’s failure to
`recognize and correct that error. As the Eleventh Circuit stated
`in Bloodsworth v. Heckler, 703 F.2d 1233, 1239 (11th Cir. 1983),
`the Secretary’s argument “makes linguistic but not legal sense.”
`A claimant could not seek further administrative review because
`she has exhausted all of her administrative remedies, and yet, she
`is also foreclosed from judicial review because she has not
`exhausted her administrative remedies. Under the Secretary’s
`reasoning, the claimant would never have a “final” decision” and
`“would [be] le[ft] . . . permanently in limbo.” Id.
`
`
`9 The remaining three cases of non-binding precedent cited by
`the Secretary but not discussed herein are also factually
`distinguishable from this case as they involve plaintiffs who
`failed to appear for a scheduled ALJ hearing or failed timely to
`request a hearing.
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`Case 1:20-cv-02475-DKC Document 16 Filed 03/25/21 Page 18 of 21
`
`Plaintiff complied with all the required steps established by
`law and yet was shut out of the administrative review process
`because of errors committed by the MAC, the QIC, and the ALJ.
`Accordingly,
`Plaintiff
`has
`sufficiently
`exhausted
`her
`administrative remedies and is not precluded from judicial review.
`The Secretary’s motion to dismiss will be denied.
`C.
`Further Determinations
`The determination that Plaintiff has stated a claim may well
`be dispositive of the merits as well, leading to a determination
`that the Agency’s decision was arbitrary and capricious. The logic
`is as follows:
`In requesting vacatur of the QIC’s dismissal rather than ALJ
`review, Dr. Kantor followed the precise instructions provided to
`her in the November 18, 2014 dismissal notice. The notice
`expressly stated that if Dr. Kantor disagreed with the QIC’s
`decision, she had two options: She could either request vacatur of
`the dismissal within six months or appeal the dismissal to an ALJ
`within sixty days. Nothing in the letter stated that if Dr. Kantor
`pursued the vacatur option, she waived her right to appeal the
`dismissal to an ALJ.10 Likewise, the regulations contain no
`
`
`10 Arguably, the QIC’s notice violated 42 U.S.C.
`§ 1395ff(c)(3)(E) which states that “[a]ny decision with respect
`to a reconsideration of a [QIC] shall . . . be written in a manner
`calculated to be understood by the individual . . . enrolled under
`Part B . . . and [include] a notification of the right to appeal
`such determination and instructions on how to initiate such appeal
`under this section[.]”
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`indication that requesting vacatur of a QIC dismissal has the
`effect of waiving a claimant’s right to an ALJ Hearing. To the
`contrary, the regulations contemplate that that an unfavorable
`request for vacatur decision is properly appealed to an ALJ.
`Section 405.972(e) states that the effect of a QIC dismissal is
`binding “unless it is modified or reversed by an ALJ or attorney
`adjudicator under 405.1004 or vacated under paragraph (d) of this
`section.” Section 405.1004(b) provides that an ALJ may
`“determine[] that the QIC’s dismissal was in error, [and] vacate[]
`the dismissal and remand[] the cause to the QIC for a
`reconsideration in accordance with 405.1056.”
`Section 405.1052(b)(2) further states that “[a]n ALJ . . .
`dismisses a request for review of a QIC dismissal [if] [] [t]he
`party did not request a review within the stated time period and
`the ALJ . . . has not found good cause for extending the deadline,
`as provided in 405.1014(e).” Section 405.1014(e) states that:
`“[t]o deter