Hirsch v. Palermo, MD DDS

UNITED STATES DISTRICT COURT

MIDDLE DISTRICT OF FLORIDA

TAMPA DIVISION

MANFRED HIRSCH and

ELLEN GIALLONARDO,

Plaintiffs,

v. Case No. 8:25-cv-747-WFJ-AAS

THE CENTERS FOR MEDICARE &

MEDICAID SERVICES,

Defendant.

_______________________________________/

REPORT AND RECOMMENDATION

The United States of America requests that the court alter or amend, or

provide relief from, the March 19, 2025, default judgment entered against First

Coast Service Options, Inc. (First Coast) by the County Court, in and for

Hillsborough County, Florida.1 (Doc. 5). Plaintiffs Manfred Hirsch2 and Ellen

Giallonardo (collectively, the plaintiffs), proceeding pro se, oppose the motion.

(Docs. 16, 18).

I. BACKGROUND

On July 27, 2023, Ms. Giallonardo received dental services from Victoria

1 For the reasons stated in its order, the court substituted the United States the

Centers for Medicare & Medicaid Services (CMS) in place of First Coast Services

Options, Inc., as party-defendant. (See Doc. 19).

2 Mr. Hirsch is the spouse and power of attorney of Ms. Giallonardo.

Palermo, M.D., D.D.S., and Florida Craniofacial Institute PA (FCI). On June

3, 2024, the plaintiffs submitted a claim requesting Medicare coverage for

dental services to First Coast, a Medicare Administrative Contractor.3 On July

23, 2024, First Coast sent Ms. Giallonardo a “Medicare Summary Notice”

advising that Medicare did not cover the dental services rendered, and

erroneously stated that Ms. Giallonardo was due a refund from FCI. (Doc. 1-1,

pp. 7–13). On August 9, 2024, FCI requested that First Coast conduct a

redetermination of benefits to correct the statement that a refund was due from

FCI to Ms. Giallonardo.

First Coast reopened Ms. Giallonardo’s claim for redetermination,

identified the error, and mailed Ms. Giallonardo a revised Medicare Summary

Notice correcting its statement that Ms. Giallonardo was due a refund from

FCI. (Doc. 1-3, pp. 33–37). On December 3, 2024, the plaintiffs appealed First

Coast’s determination and requested a revised statement that FCI owed the

plaintiffs a refund. (Id. at p. 38). On January 15, 2025, First Coast reissued its

decision advising the plaintiffs that “the beneficiary is responsible for the cost

of the services,” as well as that “[t]he provider . . . may bill the beneficiary for

the denied item or service.” (Doc. 5-1). The letter further advised Ms.

Giallonardo of her right to seek review of the decision by a Qualified

3 Neither Dr. Palermo nor FCI is an enrolled provider under Medicare.

Independent Contractor as an administrative remedy. (Id.). However, the

plaintiffs did not exhaust this level of nonjudicial review.

On February 18, 2025, the plaintiffs filed this action in the County Court,

in and for Hillsborough County, Florida, under Case No. 2025-CC-6650. In the

complaint, the plaintiffs request that First Coast refund the money paid to Dr.

Palermo and FCI and for damages suffered because of First Coast’s alleged

improper processing of their claim. (Doc. 1-1). The complaint was sent to First

Coast by U.S. Mail and received on February 24, 2025, which the United States

contends is not proper service of process. On March 19, 2025, the County Court

held a pretrial conference in which the plaintiffs voluntarily dismissed Dr.

Palermo and FCI from the action and entered final default judgment against

First Coast for $8,362.84. (Doc. 1-3, pp. 104–05). This removal under 28 U.S.C.

§ 1442 followed. (Doc. 10).

The United States now requests that this court find the County Court’s

default judgment entered against First Coast void for lack of subject matter

jurisdiction, and that the plaintiffs failed to exhaust their administrative

remedies. (Doc. 5).

II. ANALYSIS

28 U.S.C. § 1442 allows for the removal of a civil action commenced in a

state court against the United States, its agencies, or its officers to federal

court. The entry of a final judgment by a state court does not preclude removal

under 28 U.S.C. § 1442. Miami Herald Media Co. v. Fla. Dep’t of Transp., 345

F. Supp. 3d 1349, 1366 (N.D. Fla. 2018) (citation omitted). In cases removed

after judgment, the federal district court may review them as it would review

on its own, following the ordinary rules on post-judgment remedies. Id. The

district court may relieve a party from a final judgment on various grounds

under Rule 60(b), including where the judgment is void or for any other reason

that justifies relief.4 Id.

Federal Rule of Civil Procedure 60(b) permits the court to “relieve a party

. . . from a final judgment” for reasons including: mistake, inadvertence,

surprise, or excusable neglect; or because the judgment is void. Fed. R. Civ. P.

60(b)(1), (4). “A legal error can be a ‘mistake’ within the scope of Rule 60(b).”

King v. Bencie, No. 8:17-cv-2982-T-02TGW, 2019 WL 1897858, at *1 (M.D. Fla.

Mar 19, 2019). Here, the courts lack subject matter jurisdiction over the

plaintiffs’ claims because there has been no waiver of sovereign immunity.

Although the plaintiffs named First Coast as party-defendant, their claims

involve the administration of the Medicare program. As such, CMS, a federal

4 Like this action, in Law Off. of Mark Kotlarsky Pension Plan v. Hillman, the District

Court found the United States properly removed under § 1442 an action against a

Medicare administrative contractor following the State Court’s entry of judgment

against the Medicaid administrative contractor. See No. CIV.A. TDC-14-3028, 2015

WL 5021399, at *5 (D. Md. Aug. 21, 2015) (setting aside final judgment under Federal

Rule of Civil Procedure 60(b)).

government agency, was substituted for First Coast as party-defendant.5 42

C.F.R. § 421.5(b) (“CMS is the real party of interest in any litigation involving

the administration of the [Medicare] program.”).

The federal government and its agencies are immune from suit unless

they have consented to be sued. FDIC v. Meyer, 510 U.S. 471, 475 (1994).

Consent to suit is a prerequisite to jurisdiction. United States v. Mitchell, 463

U.S. 206, 212 (1983); see also Lewis v. Hunt, 492 F.3d 565, 570 (5th Cir. 2007)

(“The absence of such a waiver [of sovereign immunity] is a jurisdictional

defect). The consent must be express and unequivocal. Mitchell, 445 U.S. at

538. “A waiver of the federal government’s sovereign immunity must be

unequivocally expressed in statutory text . . . and will not be implied.” Lane v.

Pena, 518 U.S. 187, 192 (1996). The party asserting jurisdiction bears the

burden of establishing a waiver of sovereign immunity Ishler v. Internal

Revenue, 237 F. App’x 394, 397 (11th Cir. 2007). The plaintiffs have identified

no basis to waive the United States’ sovereign immunity against the civil

claims asserted.

In addition, any potential viable claims under the Medicare Act must

5 CMS is a division of the United States Department of Health and Human Services

and administers the Medicare and Medicaid programs, which provide health

insurance benefits to elderly, disabled, and low-income individuals. F. Healthcare

Group, Inc. v. Centers For Medicare and Medicaid Services, 495 F. Supp. 2d 1321

(2007).

first be channeled through the Medicare administrative process. Medicare

administrative contractors carry out the daily administrative task of receiving

and processing Medicare claims. See 42 U.S.C. § 1395kk1. First Coast is a

Medicare administrative contractor. A party to an initial determination

denying a Medicare claim may challenge that decision through a required,

multi-step administrative appeal process, and only after fully exhausting that

process may a party seek judicial review of the agency’s final decision. See 42

U.S.C. § 1395ff(a), (b)(1); 42 C.F.R. §§ 405.904(b); 405.906(a), (b). The Medicare

statute provides that “any individual dissatisfied with any initial

determination shall be entitled to reconsideration of the determination, and . .

. a hearing thereon by the Secretary. . . and . . . to judicial review of the

Secretary’s final decision after such hearing . . .” 42 U.S.C. § 1395ff(b)(1)(A).

Only a party that has received a “final decision of the [Secretary] made after a

hearing” may obtain judicial review of the decision by filing an action in federal

district court. 42 U.S.C. § 405(g) (made administrative remedy applicable to

Medicare by 42 U.S.C. § 1395ff(b)(1)). This is the sole avenue for judicial review

of claims arising under Medicare law. See 42 U.S.C. § 405(h) (made applicable

to Medicare by 42 U.S.C. § 1395ii). Because the plaintiffs’ claim here arises

under the Medicare Act, and because the requirements of 42 U.S.C. § 405(g)

have not been satisfied, the claim is also barred by 42 U.S.C. § 405(h).

II. CONCLUSION

Accordingly, it is RECOMMENDED that the United States’ motion to

alter or vacate the final default judgment entered against First Coast (Doc. 4)

be GRANTED and the final default judgment entered against First Coast be

declared void based on lack of subject matter jurisdiction and failure to exhaust

administrative remedies.

ENTERED in Tampa, Florida, on May 8, 2025.

Aranda. Arne ih Sane.

AMANDA ARNOLD SANSONE

United States Magistrate Judge

NOTICE TO PARTIES

The parties have fourteen days from the date they are served a copy of

this report to file written objections to this report’s proposed findings and

recommendations or to seek an extension of the fourteen-day deadline to file

written objections. 28 U.S.C. § 636(b)(1); 11th Cir. R. 3-1. A party’s failure to

object timely under 28 U.S.C. § 636(b)(1) waives that party’s right to challenge

on appeal the district court’s order adopting this report’s unobjected-to factual

findings and legal conclusions. 11th Cir. R. 3-1.