PHOENIX--Two Medicare beneficiaries and a national organization
seeking certification as a class action have filed a lawsuit
against CMS challenging recent changes to the Medicare appeals

The complaint states that under Medicare's new appeals
process--which transferred administrative law judges from the
Social Security Administration to HHS in July--it is nearly
impossible for a beneficiary to get an in-person hearing. The ALJ
transfer was mandated by the MMA.

Eleanor Webber, Judith Schneider and The Gray Panthers Project
Fund, a national organization of Medicare beneficiaries, filed the
complaint last month in U.S. District Court for the District of
Arizona, claiming that they were deprived of a fair and impartial
hearing. Webber and Schneider received medical treatment that was
determined to be not covered by Medicare, and their appeals are now
at the ALJ stage, according to the complaint.

HHS currently has four hearing location sites, compared to 141
when appeals were handled by the SSA. While HHS claimed its use of
video-teleconferencing in more than 1,000 cities would speed up the
process, the lawsuit argues it denies beneficiaries a right to a
fair hearing.

The complaint asks the court to issue a declaratory judgment
that CMS' regulations violate the MMA by having only four sites and
discouraging beneficiaries from seeking in-person hearings. It also
asks, among other things, for a permanent injunction requiring CMS
to give class action members an opportunity to receive in-person
ALJ hearings.