## Facts

- A Medicare Part B beneficiary received chiropractic manipulation treatments for spinal subluxation, a covered condition when medically necessary.
- The Medicare carrier administering Part B claims denied 17 claims, citing noncoverage and noncovered frequency of service.
- On review, the carrier again denied the claims but did not disclose that it applied a frequency-of-service utilization screen or that denial was based on exceeding a preset threshold.
- The beneficiary filed suit challenging (1) the carrier’s use of utilization screens under the Medicare statute and (2) the adequacy of review-determination notices under due process.
- The parties also disputed whether the Secretary of Health and Human Services had complied with a prior settlement concerning implementation measures.
- The case was decided on cross-motions for summary judgment.

## Issues

1. Whether the district court had jurisdiction over statutory and constitutional challenges to Part B utilization screens and the adequacy of review-determination notices.
2. Whether using frequency-of-service utilization screens to process Part B claims violates the Medicare statute’s coverage limits, including the “reasonable and necessary” standard.
3. Whether review-determination notices that omit the use and effect of a frequency screen provide constitutionally adequate notice and a meaningful chance to contest denial.
4. Whether the Secretary adequately implemented the parties’ settlement agreement.

## Decision

- The court held it had jurisdiction over both the statutory and constitutional challenges.
- The court held the carrier’s use of frequency-of-service utilization screens did not violate the Medicare statute.
- The court held the review-determination notices were inadequate and ordered them revised to state that a frequency-of-service limit was exceeded and that the beneficiary should submit additional physician information to show medical necessity.
- The court found the Secretary appeared to have satisfactorily implemented the settlement agreement.
- Summary judgment was granted in part and denied in part to each side consistent with these rulings.

## Legal Principles

- Federal courts may entertain constitutional and statutory challenges to Medicare Part B claims-processing procedures, including challenges to notice practices and screening methods.
- Medicare carriers may use utilization screens as administrative tools to flag claims for further scrutiny; the Medicare statute does not categorically bar such screening when applied consistently with statutory standards.
- Due process requires denial notices to provide the actual reason for denial and enough information to permit an effective challenge, particularly where an automated or statistical screen drives the determination.
- When denial rests on exceeding a frequency screen, the notice must disclose that basis and indicate what additional medical documentation (from a physician) could rebut the presumption and support medical necessity.

## Conclusion

The court permitted Medicare Part B carriers to use frequency-of-service utilization screens but required review-determination notices to disclose when a frequency screen caused the denial and to instruct beneficiaries to submit physician documentation to contest medical necessity, while also finding the Secretary’s settlement implementation satisfactory.


Vorster v. Bowen, 709 F. Supp. 934 (C.D. Cal. 1989)