The Medicare Appeals Council has decided, on its own motion, to review the Administrative Law Judge's (ALJ's) decision dated July 27, 2004, because there is an error of law. 20 C.F.R. �� 404.967 and 404.970, incorporated by reference in 42 C.F.R. � 405.856. The Council has considered the October 26, 2004, letter sent in response to its proposed order of remand and determined that it does not warrant any modification. Moreover, the request for oral argument is denied. Accordingly, the Council hereby vacates the hearing decision and remands this case to an ALJ for further proceedings, including a new decision. See 20 C.F.R. � 404.977.

The Council has carefully considered the record which was before the ALJ, the memorandum, with attachments, from the Centers for Medicare & Medicaid Services (CMS) dated September 1, 2004, and the letter submitted by appellant's attorney
dated October 26, 2004. The CMS memorandum, the Council's notice of review, and appellant's letter are hereby entered into the record in this case as Exhibit MAC-1 through MAC-3, respectively.

At issue in this case is Medicare coverage of durable medical equipment (DME), specifically a motorized wheelchair. The Council issued a remand order in this case on February 27, 2004. In that order, the Council clarified the standards under which the various types of DME at issue qualified for Medicare coverage. The Council also noted, referring to its prior decision In the case of Maximum Comfort, Inc. (June 11, 2003), ⁽¹⁾ that the ALJ had, "correctly found that a [Certificate of Medical Necessity (CMN)], without additional medical or clinical documentation, is not necessarily sufficient to establish that an item of DME is medically reasonable and necessary" (MAC Remand at 3). The Council directed the ALJ to determine whether the DME at issue met the requirements for Medicare coverage, including being medically reasonable and necessary for the beneficiary, as required by section 1862(a)(1) of the Act.

Subsequent to the MAC's remand in this case, the District Court for the Eastern District of California issued a decision in Maximum Comfort, Inc. v. Thompson, 323 F.Supp.2d 1060 (E.D. Cal. 2004). ⁽²⁾ In Maximum Comfort, the Court held that suppliers of DME cannot be required to obtain Medicare beneficiaries' medical records to make a judgment as to whether the equipment is medically reasonable and necessary. Instead, a supplier can rely on a CMN to provide the necessary information for the documentation of medical necessity and reasonableness. On remand in this case, the ALJ stated that "[t]he undersigned will follow the court's decision [in Maximum Comfort] and will not require additional medical necessity documentation when an appropriate, legible, complete and valid CMN for the subject DME appears in the record" (ALJ Dec. on remand, at 7).

The Council believes that its decision In the case of Maximum Comfort, Inc. was correct. The ALJ's decision to follow the reasoning of the district court's decision in Maximum Comfort, rather than the directive of the Medicare Appeals Council in its Order of Remand, was an error of law. As noted by the Court of Appeals for the District of Columbia Circuit, "District Court decisions do not establish the law of the circuit . . . nor, indeed, do they even establish 'the law of the district' " (citations omitted). In re Executive Office of the President, 215 F.3d 20 (D.C. Cir. 2000). Thus, a district court decision is not binding on other courts or tribunals, nor does it have precedential effect. See also Dardeau v. West Orange-Grove Consol. Indep. Sch. Dist., 43 F.Supp.2d 722 (W.D. Tx. 1999); Kotev v. First Colony Life Ins. Co., 927 F. Supp. 1316 (C.D. CA. 1996). However, an ALJ is required upon remand to follow the actions ordered by the Medicare Appeals Council. See 20 C.F.R. � 404.977. The ALJ erred in following the district court order in Maximum Comfort because it was not precedential and because it was contrary to the directive of the Council.

On remand, the ALJ is directed to determine whether the DME in question meets the requirements for Medicare coverage, including being medically reasonable and necessary for the beneficiary, as required by section 1862(a)(1). In doing so, the ALJ shall apply the Council's interpretation of the role of the CMN in establishing coverage of DME, as set forth in our decision In the case of Maximum Comfort, Inc. (June 11, 2003).

A number of the claim files reviewed made reference to an associated master file. The Council notes that when these files were received, neither the master files nor the audio tapes of the ALJ hearings accompanied the files. Upon remand, the ALJ shall associate all individual files with their referenced master file and audio tape. In the future, the ALJ shall ensure that the individual claim files are kept together with the master record and, if a hearing is held, audio tapes and/or transcripts of the hearing should also be maintained with the record. If the original master records and audio tapes cannot be kept together, than the ALJ shall make a copy of the master file and/or audio tapes to accompany each individual file.

The ALJ may take further action not inconsistent with this order.

DATE: December 2, 2004

Bruce P. Gipe
Administrative Appeals Judge

Thomas E. Herrmann
Administrative Appeals Judge

1. The MAC's decision can be found at http://www.hhs.gov/dab/macdecisions.

2. The judgment in the district court's case is still pending.