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Fox v. Leavitt

August 25, 2008

REBECCA FOX, ET AL., PLAINTIFFS,
v.
MICHAEL O. LEAVITT, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Rosemary M. Collyer United States District Judge

MEMORANDUM OPINION

The Washington Legal Foundation ("WLF") originally filed this suit. When the Court found that WLF lacked standing,*fn1 the attorneys involved in the case amended the complaint to name their own parents as plaintiffs*fn2 - but these plaintiffs lack standing as well. Rebecca Fox, Mary Samp, and Edward Samp, Jr. brought this suit against the U.S. Department of Health and Human Services and its component agency, Centers for Medicare and Medicare Services*fn3 (collectively "CMS"). The Amended Complaint presents a First Amendment challenge to two CMS policies regulating private entity marketing of Medicare Part D, the Medicare prescription drug benefit. See Am. Compl. [Dkt. # 16]. Plaintiffs filed a motion for summary judgment, and CMS filed a cross motion seeking dismissal due to lack of standing or for summary judgment on the merits. Because Plaintiffs lack standing to bring this suit, Plaintiffs' motion for summary judgment will be denied and dismissal will be granted.

I. FACTS

Medicare Part D was established through the adoption of Title I of the Medicare Prescription Drug Modernization and Improvement Act of 2003 ("MMA"), Pub. L. No. 108-173, codified at 42 U.S.C. §§ 1395w-101 et seq. Medicare Part D is a managed care program that uses private health care organizations to sponsor prescription drug benefit plans. The government contracts with private entities to deliver Medicare services through Medicare Advantage Plans ("MAs") and Medicare prescription drug plans ("PDPs"). Medicare beneficiaries may choose from a number of plans with different coverage and prices.

The MMA requires the Secretary of Health and Human Services to "broadly disseminate information to part D eligible individuals . . . regarding the coverage provided" under Part D. 42 U.S.C. § 1395w-101(c)(1). The plans that provide Part D coverage are required to provide their enrollees an explanation of benefits and detailed information regarding the plan, including which drugs are covered and beneficiary cost-sharing requirements. Id. § 1395w-104(a)(1)(B) & (a)(4).

CMS has issued Marketing Guidelines that govern the information that health care providers, including pharmacists and nursing homes, give to Medicare Part D beneficiaries. See Defs.' Mem. in Supp. of Mot. for Summ. J. ("Defs.' Mem."), Ex. A ("Marketing Guidelines"). Because a health care provider has an incentive to encourage a beneficiary to enroll in a particular plan when it would financially benefit the provider, the Marketing Guidelines provide that providers "cannot direct, urge or attempt to persuade beneficiaries to enroll in a specific plan." Marketing Guidelines at 123-24. The Marketing Guidelines similarly prohibit providers from "marketing" by: steering, or attempting to steer, an undecided potential enrollee towards a plan, or limited number of plans, and for which the individual or entity performing marketing activities expects compensation directly or indirectly from the plan for such marketing activities. "Assisting in enrollment" and "education" do not constitute marketing [and are thus permissible].

Id. at 8; see also id. at 127-28. Thus, the Guidelines prohibit providers from steering patients to or from any particular MA or PDP, but permit providers to give patients information regarding plans.

In addition to the Marketing Guidelines, on May 11, 2006, CMS released a memorandum to state regulatory agencies in charge of nursing home review. This memorandum prohibits nursing homes from steering their residents to any MA or PDP. The memorandum states:

Under no circumstances should a nursing home require, request, coach or steer any resident to select or change a plan for any reason. Furthermore, a nursing home should not knowingly and/or willingly allow the pharmacy servicing the nursing home to require, request, coach, or steer any resident to select or change a plan [42 C.F.R. § 483.12(d)]. Nursing homes may, and are encouraged to, provide information and education to residents on all available Part D plans.

Compl., Ex. B (the "Nursing Home Policy").*fn4

Rebecca Fox and Mary Samp are Medicare beneficiaries, eligible for Part D, currently in their late eighties. At the time the Amended Complaint was filed, Edward Samp also was a Part D-eligible Medicare beneficiary of similar age. Mr. Samp died on November 23, 2007, and Mrs. Samp was substituted as representative of his estate as of January 14, 2008. See Order [Dkt. # 32].

Plaintiffs challenge the CMS Marketing Guidelines and the Nursing Home Policy, alleging that by imposing limitations on the information that health care providers may communicate to Medicare beneficiaries, CMS violates the First Amendment rights of Medicare beneficiaries to receive information regarding insurance coverage.

Plaintiffs filed a motion for summary judgment, and CMS filed a cross motion seeking dismissal due to lack of standing or for summary judgment on the merits.*fn5 Because Plaintiffs lack standing to bring this suit, the Court lacks ...


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