Health Law Daily Case asserting disability discrimination in Medicare coverage dismissed
Wednesday, December 11, 2019

Case asserting disability discrimination in Medicare coverage dismissed

By Karin Hicks, J.D.

The Americans with Disabilities Act is not applicable when Medicare coverage exclusion is based on residence in a specific zip code.

A federal district court in Hawaii granted CMS’ motion to dismiss a beneficiary’s complaint alleging violations of the Americans with Disabilities Act (ADA) and CMS’s Medicare Managed Care Manual (MMCM) because his insurance company did not offer Medicare coverage in his zip code. CMS argued that the beneficiary lacked standing, his claims were barred by the doctrine of sovereign immunity, and he failed to assert a viable cause of action (Winterbottom v. Underriner, December 3, 2019, Otake, J.).

The beneficiary initiated this action upon learning that he would be losing his current medical benefits upon turning 65 as his insurance company, Kaiser Foundation Health Plan (Kaiser), did not offer Medicare coverage in his zip code. Insurance company administrators informed him that contractual obligations with CMS prevented them from offering coverage in his geographical area. The beneficiary filed suit against officials of both Kaiser and CMS in April 2019 requesting declaratory and injunctive relief. The complaint was previously dismissed as to Kaiser on October 31, 2019 for lack of standing, failure to exhaust administrative remedies, and failure to assert viable claims.

Constitutional standing. CMS challenged the beneficiary’s standing to bring the action. The court examined the three elements required to demonstrate standing in a federal court: (1) injury in fact; (2) traceable to the defendant’s conduct; and (3) redressable through adjudication. The beneficiary alleged that the changes to his insurance would force him to change medical care providers after many years of care for a life-threatening disease. He did not allege that he will lose medical coverage altogether. The court found that complete deprivation of insurance coverage would constitute an injury in fact, but merely being deprived of a preferred insurer or physician does not rise to that level. Additionally, the court found that the alleged injury was not traceable to CMS’s conduct, as CMS merely approved coverage areas upon the request of Kaiser.

Sovereign immunity. CMS argued that the beneficiary’s ADA claims are barred by sovereign immunity. The court recited the doctrine of sovereign immunity in finding for CMS, which provides that, absent a waiver, the federal government and its agencies are shielded from suit. The court then clarified that the federal government has not waived its sovereign immunity with respect to the ADA.

Sufficiency of claims. The beneficiary alleged that CMS violated the ADA by colluding with his insurance company to deny coverage to all disabled and other residents in the excluded zip codes. Among other requirements, allegations of discrimination under the ADA must show that he is disabled as defined by the ADA and that the defendant is a private entity that owns, leases, or operates a public accommodation. The court recounted prior case law finding that CMS is not a public accommodation for purposes of an ADA claim. Additionally, the court stated that the ADA does not protect against claimed zip code discrimination but prohibits discrimination on the basis of an actual disability.

The beneficiary also alleged that CMS violated their own regulations related to disability discrimination as found in the MMCM. The court dismissed this claim as well stating that agency manuals, such as MMCM, do not create rights that carry the force of law. All claims failed as a matter of law.

This case is Civil No. 19-00364 JAO-WRP.

Attorneys: Glen M. Winterbottom, pro se. Dianne W. Brookins (Dentons US LLP) for David T. Underriner.

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