WSGR Negotiates Substantial Fee Award for Co-counsel in Nationwide Medicare Class Action Settlement

In early 2011, the Center for Medicare Advocacy and Vermont Legal Aid approached Wilson Sonsini Goodrich & Rosati for assistance in litigating Jimmo v. Sebelius, a federal class action lawsuit filed in the District of Vermont alleging the existence of an "improvement standard" used to make Medicare coverage determinations—a covert and illegal "rule of thumb" that required the expectation of improvement in a beneficiary's condition as a condition of coverage. The use of this improper standard resulted in the termination, reduction, or outright denial of vital coverage for healthcare or therapy services for thousands of beneficiaries nationwide who were deemed "chronic" or "medically stable," or who needed "maintenance services only."

The Jimmo plaintiffs defeated a motion to dismiss the case by defendant Kathleen Sebelius, the Secretary of the Department of Health and Human Services (HHS), in October 2011. Thereafter, the parties engaged in substantial and complex settlement negotiations, ultimately reaching a favorable settlement that was approved by Chief Judge Christina Reiss on January 24, 2013. The settlement is intended to prevent any future utilization of the "improvement standard," and its impact has been described by observers such as the editorial board of The New York Times as making "it easier for tens of thousands of disabled and chronically ill people to qualify for Medicare coverage. It is clearly the humane thing to do for desperately sick people with little hope of recovery."

WSGR's involvement in the Jimmo case did not end with the settlement. Though the parties agreed that plaintiffs' counsel was entitled to reimbursement of fees and expenses under the Equal Access to Justice Act, there was substantial disagreement as to what the proper level of reimbursement should be. While the firm's co-counsel focused on (and continues to focus on) implementation of the substantive terms of the settlement, WSGR partner David Berger and associate Luke Liss took the lead on negotiations with the Department of Justice regarding plaintiffs' fees. After several months of back-and-forth negotiations, WSGR ultimately obtained an agreement by the Department of Justice to reimburse plaintiffs $350,000 for their work leading up to the approval of the settlement. Upon the conclusion of the negotiations, WSGR also waived its portion of those fees in order to maximize the amounts received by the Center of Medicare Advocacy and Vermont Legal Aid. Its co-counsel is appreciative of WSGR's efforts, and WSGR is similarly appreciative of the ongoing efforts of the Center for Medicare Advocacy and Vermont Legal Aid as strong and dedicated advocates for some of society's most vulnerable citizens.

For more information, please see the following:

Centers for Medicare & Medicaid Services fact sheet

October 2012 article from The New York Times

October 2012 editorial from The New York Times

October 2012 Reuters article

February 2013 article from The New York Times