Class Action Challenges Social Security Admin. Review of Benefits Cases Linked to Jailed Miami Psychiatrist

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A proposed class action aims to challenge the Social Security Administration’s (SSA) reconsideration and ultimate withdrawal of benefits entitlements linked to cases handled by a Miami psychiatrist indicted and jailed for fraud. 

The plaintiff, a 58-year-old Miami resident, alleges in the 15-page lawsuit that she and hundreds of other beneficiaries have lost their supplemental security income (SSI) benefits as the result of “unlawful” redeterminations of cases linked to Dr. Fernando Mendez-Villamil, a psychiatrist who along with several employees was indicted and imprisoned for submitting fraudulent medical evidence to the SSA, among other wrongdoing. 

According to the proposed class action, which names as the defendant Commissioner of Social Security Andrew Saul, the SSA’s redetermination processes, as “all three courts of appeals that have addressed the issue have held,” are unlawful, in part because the SSA has automatically excluded from consideration “all medical evidence associated with Dr. Mendez-Villamil” without providing affected beneficiaries an opportunity to dispute the SSA’s claims. As the lawsuit tells it, the SSA wrongfully treated Dr. Mendez-Villamil’s guilty plea as proof that all medical evidence he submitted, prepared or signed after January 2002 was fraudulent. 

“In other words, in each affected beneficiary’s case, SSA’s allegation that evidence is fraudulent is treated as conclusive and not subject to rebuttal,” the lawsuit in Florida federal court says. “That conduct violates the Due Process Clause, the Administrative Procedure Act (APA), and the Social Security Act.” 

Dr. Mendez-Villamil was sentenced in July 2016 to 151 months in prison followed by three years of supervised release after pleading guilty to participating in what the government called “various schemes” related to healthcare and wire fraud and conspiracy to defraud the United States, among other charges. Mendez-Villamil’s three co-conspirators were also sentenced to prison terms of varying lengths for their role in providing false and fraudulent mental health diagnoses to thousands who sought to obtain disability benefits and waivers from the civic and language requirements of the U.S. citizenship and naturalization process. 

Although the SSA deemed the plaintiff disabled and unable to work and therefore entitled to SSI benefits in 2013, the administration’s Office of Inspector General three years later concluded based on Dr. Mendez-Villamil’s indictment and a review of 60 cases involving the doctor that there was reason to believe fraud was involved in the SSI benefits applications of those who had seen Dr. Mendez-Villamil, the lawsuit says. According to the complaint, the Office of Inspector General provided a list of 3,500 patients of Dr. Mendez-Villamil who had applied for Title II, i.e. Social Security Disability Insurance (SSDI), and/or Title XVI, i.e. Supplemental Security Income, benefits. 

In reconsidering proposed class members’ cases, the SSA invoked two laws that allow the administration to “immediately redetermine” an individual’s entitlement to benefits if there’s reason to believe fraud or similar fault was involved in the person’s application, the complaint reads. 

The timeline laid out in the lawsuit dates back to December 16, 2009, when a letter from U.S. Senator Charles Grassley identified Dr. Mendez-Villamil as having written “the largest number of prescriptions for mental health drugs paid for by Medicaid in the state of Florida.” Following Sen. Grassley’s letter, the suit says, the SSA and other federal agencies investigated Dr. Mendez-Villamil and several of his employees. In 2016, Dr. Mendez-Villamil was indicted by the government for schemes to defraud the SSA, Medicare, Medicaid and U.S. Citizenship and Immigration Services by submitting false claims for unnecessary medication, falsifying debilitating diagnoses and making false representations on immigration forms, the lawsuit says. 

The complaint asserts that although Dr. Mendez-Villamil pleaded guilty to various counts of conspiracy to make false statements and commit healthcare and wire fraud, nothing in the doctor’s plea agreement indicates that all of his patients’ disability benefits applications involved fraud or similar fault. 

“In fact, the factual proffer supporting the agreement expressly stated that the government did not believe that every patient record Dr. Mendez-Villamil produced (or that the treatment of every patient he saw), involved fraud,” the proposed class action says. 

The plaintiff seeks through the lawsuit relief in the form of the SSA reinstating her and other proposed class members’ disability benefits and an order that the SSA, if it still seeks to redetermine the individuals’ disability claims, must do so in accordance with the Due Process clause, Administrative Procedures Act and Social Security Act. As a result of the SSA’s conduct, the lawsuit alleges, the plaintiff is “no longer eligible for Medicaid in Florida, and she has at times had to forgo medical treatment” while being forced to depend more heavily on family members to pay for basic necessities. 

The suit looks to represent:

“All persons who were receiving Title II and/or Title XVI benefits (i) whose disability status SSA has sought to redetermine because their applications included evidence submitted, prepared, or signed by Dr. Mendez-Villamil; (ii) for whom SSA has excluded evidence submitted, prepared, or signed by Dr. Mendez-Villamil as potentially fraudulent, without providing the claimants an opportunity to rebut the fraud allegations; (iii) who have received a redetermination decision from SSA that is less than fully favorable; and (iv) who were not indicted for participating in the fraud and improperly receiving benefits.” 

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