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Oregon Federal Court Declines to Dismiss RESPA and FDCPA Claims Arising Out of Foreclosure Action Banner Image

Oregon Federal Court Declines to Dismiss RESPA and FDCPA Claims Arising Out of Foreclosure Action

Month: January 2020

Oregon Federal Court Declines to Dismiss RESPA and FDCPA Claims Arising Out of Foreclosure Action

Posted on by rd_admin

The United States District Court for the District of Oregon recently denied a motion to dismiss claims under the Real Estate Settlement Procedures Act (“RESPA”) and the Fair Debt Collection Practices Act (“FDCPA”).  See Gosha v. Bank of New York Mellon Corp. as Tr. (CWALT 2005-72), 2019 WL 5295466 (D. Or. 2019).  Plaintiffs brought this action after they received a notice of sale of their home based on their default on a deed of trust.  They alleged a number of state and federal law claims against their loan servicer and its agent arising out of the nonjudicial foreclosure process, including claims under RESPA and the FDCPA.  Defendants then moved to dismiss the action in its entirety.

The Court denied the motion to dismiss the RESPA and FDCPA claims.  First, the Court found that plaintiffs had plausibly alleged a violation of RESPA.  Specifically, the Court found that plaintiffs had sent a qualified written request to the servicer seeking information on “additional charges” that appeared on their payoff statement, and that defendant’s failure to respond to this request and provide information about the charges may have constituted a RESPA violation.  Second, the Court found that plaintiffs had plausibly alleged a FDCPA violation.  Section 1692f(6) states that it is a violation to “tak[e] or threat[en] to take any nonjudicial action to effect disposition or disablement of property if there is no present right to possession of the property claimed as collateral through an enforceable security interest.”  In this case, plaintiffs alleged that the defendant violated the deed of trust because it failed to provide proper notice before commencing the nonjudicial foreclosure and, because it failed to provide this notice, would not have been entitled to foreclose.  Accordingly, the Court found that plaintiffs sufficiently alleged that defendant had taken a nonjudicial action when “there [was] no present right to possession of the property.”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

 

CMS Is Expected to Increase Chart Review Audits Based on OIG’s Recent Report and Federal Litigation Update

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For more information about this blog post, please contact Khaled J. Klele, Latoya Caprice Dawkins, Ryan M. Magee, or Labinot Alexander Berlajolli.

HHS OIG Finds That Medicare Advantage Payments From Chart Reviews Raise Concerns

HHS’s Office of Inspector General has raised concerns about the use of Medicare Advantage Organizations (MAOs) use of medical chart reviews to obtain higher payments.  By analyzing the 2016 Medicare Advantage data, the OIG found that: (1) MAOs almost always used chart reviews as a tool to add, rather than to delete diagnoses; (2) diagnoses that MAOs reported only on chart reviews- and not any service records- resulted in an estimated $6.7 billion in risk-adjusted payment in 2017; (3) CMS based an estimated $2.7 billion in risk-adjusted payments that MAOs did not link to a specific service provided to a beneficiary – much less a face-to-face visit with a clinician; and (4) although limited to a small number of beneficiaries, almost half of MAOs reviewed had payments from unlinked chart reviews where there was not a single record of a service being provided to the beneficiary in all of 2016. These findings raise potential concerns about the completeness of payment data submitted to CMS, the validity of diagnoses on chart reviews, and the quality of care provided to beneficiaries. OIG recommended that CMS improve its oversight of risk-adjusted payments to MAOs, audit chart reviews and reassess the chart review system. CMS agreed with the findings and reported that it plans to begin audits that would include such chart reviews.

Fifth Circuit Declares the ACA’s Individual Mandate as Unconstitutional and Remands to District Court

On December 18, 2019, the U.S. Court of Appeals for the Fifth Circuit ruled that the Affordable Care Act’s individual mandate is unconstitutional and sent the matter back down to a district court to determine whether that provision can be removed from the rest of the ACA. The split panel found the individual mandate – previously upheld by the U.S. Supreme Court under Congress’ taxing powers— became unconstitutional when Congress scrapped its tax penalty. The majority opinion said that the panel would not rule on whether the mandate could be separated from the rest of the landmark healthcare law. Judge Elrod wrote that the case “involves a challenging legal doctrine applied to an extensive, complex, and oft-amended statutory scheme.” Judge King dissented, noting that she would vacate the lower court’s ruling because the plaintiffs lacked standing to challenge the coverage requirement. If she reached the merits, she said she would find the coverage requirements unenforceable but constitutional and totally severable from the rest of the act. The case is Texas et al v. U.S. et al.; case number 19-10011, in the U.S. Court of Appeals for the Fifth Circuit.

Medicare Drug Plans Can Pay Less to Subsidized Providers

On December 20, 2019, the U.S. Court of Appeals for the District of Columbia found that Medicare law does not require private Medicare prescription drug plans to reimburse federally subsidized health-care providers for prescription drugs at the same rates they pay nonsubsidized providers. The Court stated that while Medicare’s “not less than” provision requires private Medicare insurers, i.e., Medicare Advantage plans, to pay federally qualified health centers at least the same amount they pay other providers for medical services provided to Medicare beneficiaries, it does not apply to Medicare Part D prescription drug plans administered by private insurers. The case is Cares Community Health v. U.S. Department of Health and Human Services; case number 18-5319, in the U.S. Court of Appeals for the District of Columbia.

Tenth Circuit Upholds HHS Risk Adjustment Methodology

On December 31, 2019, the Tenth Circuit Court of Appeals upheld the methodology adopted by the Department of Health and Human Services (HHS) to administer the risk adjustment program under the ACA, reversing a district court in New Mexico that had previously concluded that part of the methodology—the use of statewide average premiums—was arbitrary and capricious. The district court struck down this part of the formula for the years from 2014 to 2018 until HHS could justify its rationale for adopting a budget-neutral risk adjustment program. This decision led to the temporary suspension of about $10.4 billion in risk adjustment payments in the summer of 2018. The Tenth Circuit disagreed with the district court’s determination, concluding that HHS’ use of the statewide average premium was not arbitrary or capricious, that the risk adjustment program must be budget neutral, and that HHS should have been given more deference. The ruling reinstates HHS’ risk adjustment methodology and means HHS need not take additional action to justify its methodology for 2014 through 2016. Risk adjustment payments based on the methodology will continue without disruption. The case is New Mexico Health Connections v. U.S. Department of Health and Human Services; case number 18-2186, in the U.S. Court of Appeals for the Tenth Circuit.

New York Supreme Court Grants Lender’s Motion for Equitable Subrogation in Alleged Forged Deed Matter

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The Supreme Court of New York, Suffolk County, recently held that a lender whose mortgage was executed after an allegedly forged deed was nonetheless entitled to an equitable lien on the property.  See Otero v Montenegro, 2019 WL 6334917 (N.Y. Sup. Ct. Nov. 14, 2019).  Plaintiff and the individual defendant lived together in the subject property as joint tenants.  In 2002, they encumbered the property with a mortgage in the amount of $155,500.  Later that year, the parties’ relationship ended and plaintiff moved out of the property.  In 2006, a deed was executed conveying the property to the individual defendant alone, and the individual defendant then refinanced the 2002 mortgage with a mortgage in the principal amount of $276,000.  In 2011, Plaintiff brought this quiet title action claiming that her signature on the 2006 deed was forged, and seeking to void the deed and the 2006 mortgage.  The current holder of the mortgage filed a motion for partial summary judgment seeking, among other things, an order that its mortgage still encumbered the property under the doctrine of equitable subrogation.

The Court granted the motion.  First, it found that $161,686.47 of the 2006 mortgage proceeds was used to pay off the 2002 mortgage that plaintiff had executed, and that the lender should be equitably subrogated for that amount.  In doing so, the Court rejected plaintiff’s argument that the lender was not entitled to equitable subrogation because it was not in possession of the prior note, finding that equitable subrogation “is premised on the satisfaction of a prior mortgage lien rather than the assignment of a prior mortgage.”  Second, the Court found that the lender had paid $79,824.40 in property taxes and was entitled to an equitable lien in that amount on the entire property, bringing the total amount of the equitable lien to $241,510.87, plus interest.  Finally, the Court found that, even if the 2006 deed were set aside, the lender would hold a valid mortgage on the individual defendant’s interest in the property “for the original principal amount of the [2006] mortgage that is not covered by the equitable lien on the entirety of the property,” i.e., $114,313.53 ($276,000-$161,686.47).

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com. 

New Jersey and Federal Legislative Update

Posted on by rd_admin

For more information about this blog post, please contact Khaled J. Klele, Latoya Caprice Dawkins, or Ryan M. Magee.

New Jersey Statutes:

A3717 – Approved – We previously reported on this statute, which initially passed both houses, but was then vetoed by the Governor.  After some modifications, the statute passed both houses again and became law after excluding self-insured plans, the State Health Benefits Plan, and the School Employees Health Benefits Plan.  The statute prohibits a pharmacy benefits manager from retroactively reducing payments on a properly filed claim for payment by a pharmacy.  These retroactive reductions in payments are referred to as direct and indirect remuneration (DIR) fees.  When a pharmacy adjudicates a claim at the point of sale, the reimbursement amount provided to the pharmacy by the pharmacy benefits manager constitutes a final reimbursement amount.  However, there are exceptions.  For example, a pharmacy benefits manager may recoup funds as the result of an audit, performed pursuant to a contract between the pharmacy benefits manager and the pharmacy.  In addition, the statute requires, with respect to execution, renewals, and changes in terms of a contract between a pharmacy benefits manager and a pharmacy, more information to be disclosed to the pharmacy in the contract, and a reasonable process by which contracted pharmacies can access certain pricing information.  Importantly, besides providing certain appeal rights, the statute provides that a pharmacy benefits manager may not terminate a pharmacy licensed in the State of New Jersey solely on the basis that the pharmacy offers and provides store direct delivery and mail prescriptions to an insured as an ancillary service.

A5098 – Approved – This statute passed both houses and became law.  We previously reported on this statute, which attempted to establish a $25 hourly Medicaid reimbursement rate for personal care services, but was vetoed by the Governor.  The amended bill establishes an $18 hourly rate instead. 

A1582 – Passed – This statute, which passed both houses, is titled the “Dietetics and Nutrition Licensing Act” and provides for the licensure of nutritionists and dietitian nutritionists.  As part of the Act, a seven-member State Board of Dietetics and Nutritionists will be created in the Division of Consumer Affairs.

A2431 – Passed – After passing both houses, this statute requires health insurers, under certain policies or contracts that provide coverage for prescription drugs, to place limitations on covered persons’ cost sharing for prescription drugs.  Unless an exception applies, the statute requires insurers that offer plans in the individual and small employer markets to ensure that at least 25 percent of all plans, or at least one plan if the insurer offers less than four plans, offered by the insurer in each rating area and in each of the bronze, silver, gold, and platinum levels of coverage, shall provide the following: (1) a contract that provides a silver, gold, or platinum level of coverage shall limit a covered person’s cost-sharing financial responsibility, including any copayment or coinsurance, for prescription drugs, including specialty drugs, to no more than $150 per month for each prescription drug for up to a 30-day supply of any single drug; and (2) a contract that provides a bronze level of coverage shall ensure that any required covered person’s cost-sharing, including any copayment or coinsurance, does not exceed $250 per month for each prescription drug for up to a 30-day supply of any single drug.

A5509 – Passed – This statute passed both houses and requires health benefits and Medicaid coverage, without requiring any cost sharing, for comprehensive lactation support and counseling and consultation, and the costs for renting or purchasing electric or manual breastfeeding equipment, in conjunction with each birth, for the duration of breastfeeding for health plan enrollees.

A4608 – Passed – This statute passed both houses and establishes and provides for the regulation and licensing of applied behavior analysts. It also establishes the State Board of Applied Behavior Analyst Examiners in the Division of Consumer Affairs Certified Behavior Analysts.

S2133 – Passed – This statute, after passing both houses, requires health insurers to provide health benefits coverage for standard fertility preservation services when a medically necessary treatment may directly or indirectly cause iatrogenic infertility defined as an impairment of fertility caused by surgery, radiation, chemotherapy, or other medical treatment affecting reproductive organs or processes.  For example, the statute requires that the provision of standard fertility preservation services must not be determined based on a covered person’s expected length of life, present or predicted disability, degree of medical dependency, perceived quality of life, or other health conditions, or based on personal characteristics, including age, sex, sexual orientation, marital status, or gender identity.   The bill defines standard fertility preservation services as procedures consistent with established medical practices and professional guidelines published by the American Society for Reproductive Medicine, the American Society of Clinical Oncology, or as defined by the New Jersey Department of Health, but does not include storage of sperm or oocytes. 

S2389 – Passed – This statute requires the New Jersey State Board of Pharmacy to establish a prescription drug pricing disclosure website.  The Board is required to develop a prescription drug pricing disclosure website to make prescription drug price information available to New Jersey practitioners.  The website must include, at a minimum, the following data elements, separated by therapeutic category:  (1) name of the product; (2) whether the drug is brand name or generic; (3) drug strength; (4) per-unit wholesale acquisition cost of the drug, provided to the Board by pharmaceutical manufacturing companies as required by the bill; and (5) any disclaimers deemed appropriate by the Board that are not inconsistent with State and federal law or regulations. 

S4141 – Passed – This statute, which passed both houses, provides that the parent or guardian of a student who seeks epilepsy or seizure disorder care while at school annually submit a seizure action plan to the school nurse. 

Federal Regulations:

84 FR 71674 – Final Rule – This final rule revises standards relating to oversight and operations of the Exchanges established by states under the Affordable Care Act and periodic data matching frequency. This final rule is effective February 25, 2020.

84 FR 70139 – Proposed – The DOH issued a proposed rule amending the regulations implementing the National Organ Transplant Act of 1984 to remove financial barriers to organ donation by expanding the scope of reimbursable expenses incurred by living organ donors to include lost wages and child-care and elder-care expenses incurred by a primary care giver. Comments are due by February 18, 2020.

84 FR 70628 – Proposed Rule – CMS issued a proposed rule related to the Conditions for Coverage for Organ Procurement Organizations (OPOs) in the hopes of increasing organ donations. OPOs perform several tasks related to organ procurement, including identifying potential organ donors, recovering the organs from donors, evaluating the organs, and supporting donor families. The proposed rule would increase the performance of OPOs based on various metrics, such as, including a “donation rate measure,” which would use objective, transparent, and reliable data to establish donor potential in a given area, changes to the transplantation rate measure, increased monitoring related to these outcomes measures, and performance benchmarks based on top-performing OPOs. Comments are due by February 21 , 2020.

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