Mercer et al v. Burwell

MOTION to Dismiss for Lack of Jurisdiction

W.D. La.February 9, 2017

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA ALEXANDRIA DIVISION MARY K. MERCER, FRANKIE K. STEWART, AND CAROLYN ALBRITTON (Individually) ) ) ) CIVIL ACTION NO: 1:16-cv-00873 ) VERSUS ) JUDGE DRELL ) SYLVIA MATTHEWS BURWELL1, Secretary of the U. S. Department of Health & Human Services ) ) ) ) MAGISTRATE JUDGE PEREZ-MONTES DEFENDANT’S MOTION TO DISMISS COMES NOW Defendant, Norris Cochran, Acting Secretary of the U.S. Department of Health and Human Services, represented by, Stephanie A. Finley, the United States Attorney for the Western District of Louisiana and the undersigned Assistant United States Attorney, and respectfully moves this Court to dismiss the Complaint for Declaratory Judgment pursuant to FED. R. CIV. P. 12(b)(1) for the reasons more fully explained in the Memorandum in Support of the Defendant’s Motion to Dismiss. 1 Norris Cochran became the Acting Secretary of the U.S. Department of Health & Human Services and hence the proper Defendant in this matter on January 20, 2017. Case 1:16-cv-00873-DDD-JPM Document 15 Filed 02/09/17 Page 1 of 2 PageID #: 84 Respectfully submitted, STEPHANIE A. FINLEY United States Attorney BY: s/Karen J. King KAREN J. KING (#23508) Assistant United States Attorney 800 Lafayette Street, Suite 2200 Lafayette, Louisiana 70501 Telephone: (337) 262-6618 Facsimile: (337) 262-6693 Email: karen.king@usdoj.gov CERTIFICATE OF SERVICE I HEREBY CERTIFY that on February 9, 2017, the foregoing Motion to Dismiss, supporting memorandum, and proposed Order were filed electronically with the Clerk of Court using the CM/ECF system. Notice of this filing will be sent to all counsel of record by operation of the court’s electronic filing system. I also certify that according to the Court’s CM/ECF Mailing List, there are no manual recipients. s/ Karen J. King KAREN J. KING (#23508) Assistant United States Attorney Case 1:16-cv-00873-DDD-JPM Document 15 Filed 02/09/17 Page 2 of 2 PageID #: 85 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA ALEXANDRIA DIVISION MARY K. MERCER, FRANKIE K. STEWART, AND CAROLYN ALBRITTON (Individually) ) ) ) CIVIL ACTION NO: 1:16-cv-00873 ) VERSUS ) JUDGE DRELL ) SYLVIA MATTHEWS BURWELL, Secretary of the U. S. Department of Health & Human Services ) ) ) ) MAGISTRATE JUDGE PEREZ-MONTES MEMORANDUM IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 1 of 21 PageID #: 86 i TABLE OF CONTENTS TABLE OF AUTHORITIES .......................................................................................... ii I. INTRODUCTION ...................................................................................................... 1 II. PROCEDURAL BACKGROUND ............................................................................. 2 III. MEDICARE STATUTORY AND REGULATORY SCHEME ............................. 2 A. Introduction - Medicare Statutory and Regulatory Scheme ................... 2 B. Administrative Appeals and Right of Judicial Review ........................... 6 1. The Requirement of Presentment and Exhaustion ................ 7 2. The Requirement of a Final Decision Prior to Seeking Judicial Relief ....................................................................... 8 IV. LAW AND ARGUMENT ....................................................................................... 11 V. CONCLUSION ...................................................................................................... 14 Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 2 of 21 PageID #: 87 ii TABLE OF AUTHORITIES FEDERAL CASES PAGES Abbot Labs v. Gardner, 387 U.S. 136 (1967), overruled on other grounds, Califano v. Sanders, 430 U.S. 99 (1977) ............................................................................................. 14 Aetna Life Insurance Company v. Haworth, 300 U.S. 227 (1937), overruled on other grounds, Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059 (Fed. Cir. 1998) ............................. 12 Affiliated Professional Home Health Care Agency v. Shalala, 164 F.3d 282 (5th Cir. 1999) ....................................................................... 12, 13 Baughan v. Thompson, 2003 WL 22295354 (W.D. Va. Sept. 30, 2003) ................................................. 12 Bird v. Thompson, 2003 WL 21537748 (S.D.N.Y. July 8, 2003) ..................................................... 12 Buckner v. Heckler, 804 F.2d 258 (4th Cir. 1986) ............................................................................... 8 Heckler v. Ringer, 466 U.S. 602 (1984) ............................................................................. 8, 9, 12, 13 Kokkonen v. Guardian Life Insurance Co., 511 U.S. 375 (1994) ........................................................................................... 11 Maresh v. Thompson, 2003 WL 22659385 (N.D. Tex. Nov. 3, 2003) ................................................... 12 Matthews v. Eldridge, 424 U.S. 319 (1976) ....................................................................................... 8, 13 Nextel Communications of the Mid-Atlantic, Inc. v. City of Margate, 305 F.3d 188 (3rd Cir. 2002) ............................................................................. 14 Nygren v. United States, 2003 WL 21487201 (W.D. Wash. April 11, 2003) ............................................ 12 Public Service Commission of Utah v. Wycoff, 344 U.S. 237 (1952) ........................................................................................... 12 Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 3 of 21 PageID #: 88 iii TABLE OF AUTHORITIES (Continued) Rivera v. Railroad Ret. Bd., 262 F.3d 1005 (9th Cir. 2001) ........................................................................... 11 In re S.L.E. Inc., 674 F.2d 359 (5th Cir. 1982) ............................................................................. 13 Shalala v. Ill. Council for Long Term Care, Inc., 529 U.S. 1 (2000) ....................................................................................... 8, 9, 10 Skelly Oil Co. v. Phillips Petroleum Co., 339 U.S. 667 (1950) ...................................................................................... 11-12 Steel Co. v. Citizens for a Better Environment, 523 U.S. 83 (1998) ............................................................................................. 11 Truett v. Bowman, 288 F. Supp. 2d 909 (W.D. Tenn., 2003) .......................................................... 12 Weinberger v. Salfi, 422 U.S. 749 (1975) ................................................................................. 9, 10, 12 FEDERAL STATUTES 20 C.F.R. § 422.210 ........................................................................................................ 7 42 C.F.R. §§ 405.900, et seq. .......................................................................................... 6 42 C.F.R. § 405.904 ........................................................................................................ 7 42 C.F.R. § 405.924(16) .................................................................................................. 6 42 C.F.R. § 405.942 ........................................................................................................ 7 42 C.F.R. § 405.962 ........................................................................................................ 7 42 C.F.R. § 405.1014 ...................................................................................................... 7 42 C.F.R. § 422.1102 ..................................................................................................... 7 42 C.F.R. § 405.1130 ...................................................................................................... 7 42 C.F.R. § 411.24(e) ..................................................................................................... 5 Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 4 of 21 PageID #: 89 iv TABLE OF AUTHORITIES (Continued) 42 C.F.R. § 411.24(g) ..................................................................................................... 5 42 C.F.R. § 411.24(h) ..................................................................................................... 4 42 C.F.R. § 411.26(a) ...................................................................................................... 5 42 C.F.R. § 411.37 .......................................................................................................... 5 28 U.S.C. § 2201 ........................................................................................................... 11 28 U.S.C. § 1331 ............................................................................................. 2, 9, 11, 13 28 U.S.C. § 1346 ........................................................................................................... 13 42 U.S.C. § 405(g) .................................................................................. 8, 10, 11, 12, 13 42 U.S.C. § 405(h) ........................................................................................ 9, 10, 12, 13 42 U.S.C. § 1395, et seq .................................................................................................. 2 42 U.S.C. § 1395ff ........................................................................................................ 12 42 U.S.C. § 1395ff(a) ...................................................................................................... 6 42 U.S.C. § 1395ff(a)(1) .................................................................................................. 6 42 U.S.C. § 1395ff(b) ..................................................................................................... 9 42 U.S.C. § 1395ff(b)(1) ................................................................................................. 7 42 U.S.C. § 1395ff(b)(1)(A) ............................................................................................ 7 42 U.S.C. § 1395hh(a)(1) ................................................................................................ 3 42 U.S.C. § 1395ii .......................................................................................................... 8 42 U.S.C. § 1395y(b) ...................................................................................................... 3 42 U.S.C. § 1395y(b)(2)(A)(i) .......................................................................................... 3 42 U.S.C. § 1395y(b)(2)(A)(ii) ........................................................................................ 3 Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 5 of 21 PageID #: 90 v TABLE OF AUTHORITIES (Continued) 42 U.S.C. § 1395y(b)(2)(B)(ii) ........................................................................................ 4 42 U.S.C. § 1395y(b)(2)(B)(iii) ....................................................................................... 5 42 U.S.C. § 1395y(b)(2)(B)(iv) ........................................................................................ 5 FED. R. CIV. P. 12(b)(1) ............................................................................................ 1, 2 FED. R. CIV. P. 57 ....................................................................................................... 11 FED. R. CIV. P. 82 ....................................................................................................... 12 OTHER Wilson v. The United States, U.S. Ct. Fed. Claims, No. 03-635C (December 4, 2003) .................................. 12 H.R. Rep. No. 96-1167 (1980), reprinted in 1980 U.S.C.C.A.N. 5526, 5752 ................ 3 Omnibus Reconciliation Act of 1980, Pub. L. No. 96-499, § 953, 94 Stat. 2599, 2647.............................................................................................. 3 Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 6 of 21 PageID #: 91 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA ALEXANDRIA DIVISION MARY K. MERCER, FRANKIE K. STEWART, AND CAROLYN ALBRITTON (Individually) ) ) ) CIVIL ACTION NO: 1:16-cv-00873 ) VERSUS ) JUDGE DRELL ) SYLVIA MATTHEWS BURWELL, Secretary of the U. S. Department of Health & Human Services ) ) ) ) MAGISTRATE JUDGE PEREZ-MONTES MEMORANDUM IN SUPPORT OF DEFENDANT’S MOTION TO DISMISS I. INTRODUCTION Before the Court is a Motion to Dismiss Plaintiffs’ Complaint for Declaratory Judgment filed by Defendant Norris Cochran, Acting Secretary of the U.S. Department of Health and Human Services (“the Secretary”), by and through Stephanie A. Finley, the United States Attorney for the Western District of Louisiana, and the undersigned Assistant United States Attorney, pursuant to FED. R. CIV. P. 12(b)(1). This Memorandum is submitted in support of the Motion. Congress has designed a comprehensive administrative review process to handle disputes involving Medicare. Plaintiffs cannot circumvent this extensive statutory scheme by asserting a claim herein. Plaintiffs have failed to allege that their claim has either been presented to the Secretary or that administrative remedies have been exhausted. Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 7 of 21 PageID #: 92 2 The burden is on the Plaintiffs to prove that this Court has jurisdiction over its claim against the Secretary, and they have failed to do so. Plaintiffs’ claim to affect Medicare’s recovery for conditional payments made pursuant to the Medicare Secondary Payer Act should be dismissed pursuant to FED. R. CIV. P. 12(b)(1) because the Court lacks subject matter jurisdiction over the Plaintiffs’ claim against the Secretary. II. PROCEDURAL BACKGROUND On June 22, 2016, the Plaintiffs filed a Complaint for Declaratory Judgment in this matter. Rec. Doc. 1. Within their complaint, the Plaintiffs allege that this court has jurisdiction pursuant to 28 U.S.C. § 1331 and assert that “[t]he basis for jurisdiction herein is federal question as federal question jurisdiction is present where the legal issue is the recovery of conditional payments for Medicare costs under the Medicare as Secondary Payer Act [sic] 42 U.S.C. § 1395y.” Id. at 1. However, the Plaintiffs’ reliance on federal question jurisdiction is misplaced, as the United States, and by extension, the Secretary has not waived sovereign immunity to be sued for the claims presented herein. III. MEDICARE STATUTORY AND REGULATORY SCHEME A. Introduction - Medicare Statutory and Regulatory Scheme The Medicare program, which was enacted in 1965, is a federally funded program of health insurance for the aged, the disabled, and persons suffering from end stage renal disease. See 42 U.S.C. § 1395, et seq. (the “Medicare Act”). The Secretary of the United States Department of Health and Human Services (“the Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 8 of 21 PageID #: 93 3 Secretary”), acting through the Administrator of the Centers for Medicare & Medicaid Services (“CMS”) has overall responsibility for the program and broad authority to “prescribe such regulations as may be necessary to carry out the administration of the insurance programs . . .” 42 U.S.C. § 1395hh(a)(1). In 1980, Congress enacted a series of statutes designed to stem the skyrocketing costs of the Medicare program. See H.R. Rep. No. 96-1167 (1980), reprinted in 1980 U.S.C.C.A.N. 5526, 5752. These statutes – collectively known as the Medicare Secondary Payer (“MSP”) provisions – require liability, automobile, and no-fault insurance to make the primary payment for services rendered to Medicare beneficiaries, leaving the Medicare program to provide benefits only as a “secondary” payer. See Omnibus Reconciliation Act of 1980, Pub. L. No. 96-499, § 953, 94 Stat. 2599, 2647; 42 U.S.C. § 1395y(b) (Supp. IV 1980). The MSP provisions use two mechanisms to protect Medicare funds and ensure that Medicare is the secondary payer. First, these provisions prohibit Medicare from making payments for covered medical items and services if payment has already been made or can reasonably be expected to be made by another source. See 42 U.S.C. § 1395y(b)(2)(A)(i). The provisions direct that Medicare should not pay benefits when “payment has been made, or can reasonably be expected to be made under a workmen’s compensation law or plan of the United States or a State or under an automobile or liability insurance policy or plan (including a self-insured plan) or under no fault insurance.” 42 U.S.C. § 1395y(b)(2)(A)(ii). Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 9 of 21 PageID #: 94 4 Second and relevant to this action, the provisions require that, under certain circumstances, Medicare must be reimbursed for the payments that it does make. “A primary plan, and an entity that receives payment from a primary plan, shall reimburse the appropriate Trust Fund for any payment made by the Secretary under this title with respect to an item or service if it is demonstrated that such primary plan has or had a responsibility to make payment with respect to such item or service.” 42 U.S.C. § 1395y(b)(2)(B)(ii). “A primary plan’s responsibility for such payment may be demonstrated by a judgment, a payment conditioned upon the recipient’s compromise, waiver, or release (whether or not there is a determination or admission of liability) of payment for items or services included in a claim against the primary plan or the primary plan’s insured, or by other means.” Id. This mechanism permits a beneficiary to receive needed medical care, while ensuring that the Medicare Trust Funds will be reimbursed when payment becomes available from another source. CMS regulations make clear that “[i]f [a] beneficiary or other party receives a third party payment, the beneficiary or other party must reimburse Medicare within 60 days.” 42 C.F.R. § 411.24(h) (emphasis added). If reimbursement is not made within sixty days, “the Secretary may charge interest . . . on the amount of the reimbursement until reimbursement is made (at a rate determined by the Secretary in accordance with regulations of the Secretary of the Treasury applicable to charges for late payments).” 42 U.S.C. § 1395y(b)(2)(B)(ii). Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 10 of 21 PageID #: 95 5 When a third party payment is made as a result of a settlement, judgment or award, CMS ordinarily reduces its recovery by a proportionate share of the costs of procuring the settlement, judgment or award. See 42 C.F.R. § 411.37. In the event that the Medicare program is not reimbursed for conditional payments made on a beneficiary’s behalf, the MSP statute affords the United States several avenues of recovery. First, the United States “may bring an action against any or all entities that are or were required or responsible . . . to make payment with respect to the same item or service (or any portion thereof) under a primary plan (and may . . . collect double damages against any such entity).” 42 U.S.C. § 1395y(b)(2)(B)(iii); see also 42 C.F.R. § 411.24(e) (“CMS has a direct right of action to recover from any entity responsible for making primary payment.”). Second, the United States may bring an action against “any entity that has received payment from a primary plan or from the proceeds of a primary plan’s payment to any entity.” 42 U.S.C. § 1395y(b)(2)(B)(iii); see also 42 C.F.R. § 411.24(g) (“CMS has a right of action to recover its payments from any entity, including a beneficiary, provider, supplier, physician, [or] attorney . . . that has received a primary payment.”). Finally, in addition to these direct rights of action, Congress provided the United States with a separate subrogation right: “The United States shall be subrogated (to the extent of payment made under this subchapter for such an item or service) to any right under this subsection of an individual or any other entity to payment with respect to such item or service under a primary plan.” 42 U.S.C. § 1395y(b)(2)(B)(iv); see also 42 C.F.R. § 411.26(a) (“With respect to services for which Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 11 of 21 PageID #: 96 6 Medicare paid, CMS is subrogated to any individual, provider, supplier, physician, private insurer, State agency, attorney, or any other entity entitled to payment by a primary payer.”). B. Administrative Appeals and Right of Judicial Review The Medicare Act authorizes CMS to make determinations regarding a Medicare beneficiary’s obligation to reimburse the Medicare program under the MSP statute and to establish a procedure through which a beneficiary may administratively appeal such a determination. Section 1395ff(a) of the Medicare Act provides that CMS “shall promulgate regulations and make initial determinations with respect to benefits under part A or part B of [the Medicare program] in accordance with those regulations” prescribed by it. 42 U.S.C. § 1395ff(a)(1). In accordance with this directive, CMS has promulgated regulations specifying the types of determinations it makes with respect to Medicare benefits that confer administrative appeal rights upon individuals. See 42 C.F.R. §§ 405.900, et seq., 405.801, et seq. Such determinations include a determination as to the amount and existence of a conditional payment recovery claim, where Medicare makes conditional payments under the Medicare Secondary Payer provisions and pursues recovery from an applicable plan. See 42 C.F.R. § 405.924(16). Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 12 of 21 PageID #: 97 7 1. The Requirement of Presentment and Exhaustion A Medicare beneficiary who is dissatisfied with a CMS determination regarding their entitlement to benefits or any recovery for payments that have been made on the beneficiary’s behalf has recourse to a carefully crafted administrative appeals process. Section 1395ff(b)(1) of the Medicare Act provides that “[a]ny individual dissatisfied with any initial determination [regarding, inter alia, the amount of benefits under part A or part B] shall be entitled to reconsideration of the determination, and . . . a hearing thereon by the Secretary [of Health and Human Services] . . . and to judicial review of the Secretary’s final decision after such hearing . . .” 42 U.S.C. § 1395ff(b)(1)(A). A beneficiary’s right to challenge a Medicare overpayment determination includes, among other things, the right to request reconsideration, a hearing before an Administrative Law Judge (“ALJ”), and a review of an unfavorable ALJ decision before the Medicare Appeals Council. 42 C.F.R. § 405.904. In order to avail themselves of the administrative appeals process, beneficiaries must follow the strict time frames set forth in the regulations. See 42 C.F.R. § 405.942 (after initial determination, 120 days to file for redetermination); 42 C.F.R. § 405.962 (after redetermination, 180 days to file for reconsideration); 42 C.F.R. § 405.1014 (60 days after reconsideration to request a hearing before an ALJ); 42 C.F.R. § 422.1102 (60 days after ALJ decision to file for review by the Medicare Appeals Council); 42 C.F.R. § 405.1130 (60 days after the MAC review to file for judicial review). Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 13 of 21 PageID #: 98 8 2. The Requirement of a Final Decision Prior to Seeking Judicial Relief An individual who 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). As explained in detail below, the Medicare Act makes clear that 42 U.S.C. § 405(g) is the sole avenue for judicial review of claims relating to Medicare overpayment determinations. See 42 U.S.C. § 1395ii. The “final decision” requirement of 42 U.S.C. § 405(g) consists of two elements – first, a non-waivable requirement that a claim for benefits be presented to the Secretary and, second, a requirement that the administrative procedures prescribed by statute and regulations be exhausted prior to judicial review, which can be waived under certain limited circumstances. See Matthews v. Eldridge, 424 U.S. 319, 328 (1976). The first of these requirements (known as “presentment”) is non-waivable because “absent [the submission of] a claim, there can be no ‘decision’ of any type, [a]nd some decision by the Secretary is clearly required by [§ 405(g)].” Id. Moreover, the fact that a Medicare beneficiary does not yet have a “claim” to present (e.g., a beneficiary has not undergone a particular procedure or the Secretary has not yet taken enforcement action) does not relieve the beneficiary or provider of the obligation to satisfy the presentment requirement. See Shalala v. Ill. Council for Long Term Care, Inc., 529 U.S. 1, 15 (2000); Heckler v. Ringer, 466 U.S. 602, 622 (1984); Buckner v. Heckler, 804 F.2d 258, 260 (4th Cir. 1986). As explained above, the Medicare Act and its implementing regulations provide for an administrative mechanism whereby a beneficiary may contest an agency determination as to the Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 14 of 21 PageID #: 99 9 amount and existence of a conditional payment recovery claim. See 42 U.S.C. § 1395ff(b); 42 C.F.R. § 405.900, et seq. The Supreme Court addressed the implications of Section 405(h) in Shalala v. Ill. Council for Long Term Care, Inc. (Ill. Council), supra. In that case, a nursing home association brought a pre-enforcement (and, by definition, pre-exhaustion) challenge to certain Medicare regulations, alleging federal question jurisdiction and arguing that the regulations violated the Medicare Act, the APA, and various constitutional provisions. Id., 529 U.S. at 7. The Court framed the question presented as whether “the [42 U.S.C. § 405(h)] bar appl[ies] when one who might later seek money or some other benefit from (or contest the imposition of a penalty by) the agency challenges in advance (in a § 1331 action) the lawfulness of a policy, regulation or statute that might later bar recovery (or authorize the imposition of the penalty).” Id. 529 U.S. at 10 (emphasis in original). In answering this question in the affirmative, the Court relied heavily on its prior decisions in Salfi1 and Ringer. Id. 529 U.S. at 11-12. The Court found that it was “unable to distinguish” the facts of those cases from the facts of the case before it: Those cases themselves foreclose distinctions based upon the “potential future” versus the “actual present” nature of the claim, the “general legal” versus the “fact-specific” nature of the challenge, the “collateral” versus “noncollateral” nature of the issues, or the “declaratory” versus “injunctive” nature of the relief sought. Nor can we accept a distinction that limits the scope of § 405(h) to claims for monetary benefits. Claims for money, claims for other benefits, claims of program eligibility, and claims that contest a sanction or remedy may all similarly rest upon individual fact-related circumstances, may all 1 Weinberger v. Salfi, 422 U.S. 749, 762 (1975). Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 15 of 21 PageID #: 100 10 similarly dispute agency policy determinations, or may all similarly involve the application, interpretation, or constitutionality of interrelated statutory or regulatory provisions. There is no reason to distinguish among them in terms of the language or . . . purposes of § 405(h). Id., 529 U.S. at 13-14. The Court noted that “the bar of § 405(h) reaches beyond ordinary administrative law principles of ‘ripeness’ and ‘exhaustion of administrative remedies,’ . . . doctrines that in any event normally require channeling a legal challenge through the agency.” Id., 529 U.S. at 12. The Court held Section 405(h) “demands the ‘channeling’ of virtually all legal attacks through the agency, . . . assur[ing] the agency greater opportunity to apply, interpret, or revise policies, regulations, or statutes without possibly premature interference by different individual courts . . . .” Id., 529 U.S. at 13 (emphasis added). In so ruling, the Court reiterated its prior holding that, under the Medicare statute, exhaustion of administrative remedies is a jurisdictional prerequisite, and flatly rejected the association’s protests that federal question jurisdiction should lie because applicable regulations limited the extent to which the agency could review and rule upon certain challenges. Id., 529 U.S. at 23. As discussed above, obtaining a final decision of the Secretary made after a hearing is the statutory requirement for this Court to have subject matter jurisdiction over a Medicare claim such as the MSP claim the Plaintiffs present. See Salfi, 422 U.S. at 764; Section 405(g). Plaintiffs have neither presented a claim nor obtained a final decision of the Secretary after a hearing on their claims, and absent Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 16 of 21 PageID #: 101 11 presentment there can be no waiver of the exhaustion requirement. Section 405(g) is the only means by which Plaintiffs may obtain judicial review of their claims. Plaintiffs have not fulfilled the Section 405(g) jurisdictional prerequisites, thus the Court may not exercise jurisdiction over their claims. IV. LAW AND ARGUMENT The Court Lacks Subject Matter Jurisdiction of Plaintiff=s Claim: There Has Been No Exhaustion of Administrative Remedies, No Waiver of Sovereign Immunity and Consequently, No Conferring of Subject Matter Jurisdiction. Because Federal Courts are courts of limited jurisdiction, matters are presumed to lie outside their jurisdiction. The burden of establishing otherwise lies with the party asserting jurisdiction. Kokkonen v. Guardian Life Ins. Co., 511 U.S. 375, 377 (1994). The Supreme Court has made clear that A[w]ithout jurisdiction the court cannot proceed at all in any cause. . . . The requirement that jurisdiction be established as a threshold matter springs from the nature and limits of the judicial power of the United States and is inflexible and without exception.@ Steel Co. v. Citizens for a Better Environment, 523 U.S. 83, 94 (1998) (internal citations and quotation marks omitted); See also Rivera v. Railroad Ret. Bd., 262 F.3d 1005, 1008 (9th Cir. 2001) (stating Athe Supreme Court has instructed lower courts to resolve jurisdictional issues before reaching the merits of a cause.@) Plaintiffs’ complaint asserts that jurisdiction is present in this case under 28 U.S.C. ' 13312. However, subject matter jurisdiction of claims arising under 2 Plaintiffs seek declaratory relief pursuant to 28 U.S.C. § 2201 and FED. R. CIV. P. 57; however, these ancillary and procedural devices also do not confer federal jurisdiction. Skelly Oil Co. v. Phillips Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 17 of 21 PageID #: 102 12 Medicare is granted only by 42 U.S.C. ' 405(g), which provides that A[a]ny individual, after a final decision of the [Secretary] made after a hearing to which he is a party. . . . may obtain review of such decision by a civil action commenced within sixty days after the mailing. . . . of notice of such decision. . . .@ Section A405(g). . . . is the sole avenue for judicial review for all claims[s] arising under the Medicare Act.@ Heckler v. Ringer, 466 U.S. 602, 615 (1984). All claims with respect to which the Medicare Act provides Athe standing and substantive basis for the presentation of the claim@ arise under the Act.3 Section 1395ff of the Medicare Act incorporates 42 U.S.C. § 405(g) by reference. Relatedly, Section 1395ii, which incorporates by reference 42 U.S.C. ' 405(h), bars judicial review in any manner other than that prescribed in Section 405(g). Affiliated Professional Home Health Care Agency v. Shalala, 164 F.3d 282, 285 (5th Cir. 1999). Specifically, “No action against the United States, the Commissioner of Social Petroleum Co., 339 U.S. 667, 671 (1950); Aetna Life Insurance Company v. Haworth, 300 U.S. 227, 240 (1937), overruled on other grounds by Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1067- 68 (Fed. Cir. 1998); Public Service Commission of Utah v. Wycoff, 344 U.S. 237, 241-242 (1952); see also FED. R. CIV. P. 82 (federal rules shall not be construed to extend or limit subject matter jurisdiction). 3 Weinberger v. Salfi, 422 U.S. 749, 760-761 (1975) (holding that claim for Social Security benefits arose under the Social Security Act because the Act provided both the standing and substantive basis for the presentation of claim); Heckler v. Ringer, 466 U.S. 602, 620, 624 (1984) holding that claim for medicare benefits Aarise under@ the Medicare Act if Athe Medicare Act provides both the substance and the standing for Plaintiff=s claims,@ or in other words, where the claim is Ainextricably intertwined@ with the Medicare Act); See also Nygren v. United States, 2003 WL 21487201, *2, (W.D. Wash. April 11, 2003); Bird v. Thompson, 2003 WL 21537748, *3, (S.D.N.Y. July 8, 2003); Truett v. Bowman, 288 F. Supp. 2d 909, 911-912 (W.D. Tenn., 2003); Maresh v. Thompson, 2003 WL 22659385 (N.D. Tex. Nov. 3, 2003) (holding that issue of whether Medicare paid more for Plaintiff=s case than it was required to pay in light of tort settlement Aarises under@ the Medicare Act); Baughan v. Thompson, 2003 WL 22295354 (W.D. Va. Sept. 30, 2003) (holding that Plaintiff=s claims, via declaratory judgment action, that Secretary had no claim against proceeds of insurance settlement for reimbursement of Medicare benefits paid for Plaintiff=s treatment arose under federal Medicare law); Wilson v. The United States, U.S. Ct. of Fed. Claims, No. 03-635C, Dec. 4, 2003. Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 18 of 21 PageID #: 103 13 Security, or any officer or employee thereof shall be brought under Section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.” 42 U.S.C. ' 405(h). Under proper circumstances not present here, Section 405(g) can provide a federal district court with jurisdiction and, in that limited respect, waive sovereign immunity with respect to claims that arise under the Medicare Act. However, before proceeding to court, beneficiaries and providers must first satisfy the non-waivable and non-excusable requirement of presenting their claims to the Secretary and then exhausting their administrative remedies in order to obtain a final decision from the Secretary. Affiliated Professional Home Health Care Agency v. Shalala, 164 F.3d at 285; Matthews v. Eldridge, 424 U.S. 319, 328 (1976). Thus Section 405(g) is the sole avenue for judicial review of Aall claims arising under the Medicare Act.@ Heckler v. Ringer, 466 U.S. 602, 615 (1984). In this case, Plaintiffs’ complaint contains no representations whatsoever with respect to having satisfied either the presentment or the exhaustion of remedies prongs of the jurisdictional test such that the Secretary is amenable to the present action. In fact, the express exhaustion requirements of Section 405(g) have not been met. There has been, therefore, no waiver of sovereign immunity and, consequently, no conferring of subject matter jurisdiction on the court. Thus, the Plaintiffs’ complaint against the Secretary must be dismissed.4 4 For the same reason that there has been no waiver of sovereign immunity, there are no justiciable issues for the court to consider and no Acase or controversy@ under Article III. Federal courts may not resolve questions posited in a vacuum but only those arising in a Acase or controversy.@ In re S.L.E. Inc., 674 F.2d 359, 363 (5th Cir. 1982). AThe basic rationale for the ripeness doctrine is to Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 19 of 21 PageID #: 104 14 V. CONCLUSION In asserting its claim for declaratory relief, the Plaintiffs must establish subject matter jurisdiction in this Court. The Medicare claim involved in this case is subject to the requirements of the Medicare Act, but the Plaintiffs have not satisfied the Medicare Act=s requirement that Medicare insurance claims be presented to HHS, and all denials of claims be appealed to the Secretary of HHS through a statutorily prescribed appeal process, before seeking judicial relief. By not presenting their claim or seeking administrative review, the Plaintiffs have not exhausted their administrative remedies, which Congress mandates as a jurisdictional prerequisite before the Plaintiffs may seek judicial relief. For the foregoing reasons, the Secretary respectfully requests that this Court dismiss the Plaintiffs’ Complaint for Declaratory Judgment, without prejudice, because the Court does not possess subject matter jurisdiction to entertain the claim against the Secretary as set forth in the complaint. Respectfully submitted, STEPHANIE A. FINLEY United States Attorney BY: s/Karen J. King KAREN J. KING (#23508) Assistant United States Attorney 800 Lafayette Street, Suite 2200 Lafayette, Louisiana 70501 prevent the courts, through the avoidance of premature adjudication, from entangling themselves in abstract disagreements over administrative policies and also to protect agencies from judicial interference until an administrative decision has been formalized and its effects felt in a concrete way by the challenging parties.@ Nextel Communications of the Mid-Atlantic, Inc. v. City of Margate, 305 F.3d 188, 192-193 (3rd Cir. 2002) quoting Abbot Labs v. Gardner, 387 U.S. 136, 148-149 (1967), overruled on other grounds, Califano v. Sanders, 430 U.S. 99, 105 (1977). Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 20 of 21 PageID #: 105 15 Telephone: (337) 262-6618 Facsimile: (337) 262-6693 Email: karen.king@usdoj.gov Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 21 of 21 PageID #: 106 UNITED STATES DISTRICT COURT WESTERN DISTRICT OF LOUISIANA ALEXANDRIA DIVISION MARY K. MERCER, FRANKIE K. STEWART, AND CAROLYN ALBRITTON (Individually) ) ) ) CIVIL ACTION NO: 1:16-cv-00873 ) VERSUS ) JUDGE DRELL ) SYLVIA MATTHEWS BURWELL, Secretary of the U. S. Department of Health & Human Services ) ) ) ) MAGISTRATE JUDGE PEREZ-MONTES O R D E R The Court having before it Defendant’s Motion to Dismiss Plaintiffs’ Complaint for Declaratory Judgment, and upon due consideration, now therefore: IT IS HEREBY ORDERED, ADJUDGED, AND DECREED that the Defendant’s motion is GRANTED. IT IS FURTHER ORDERED, ADJUDGED AND DECREED that the Plaintiffs’ Complaint against the Secretary of the U.S. Department of Health and Human Services be and the same is hereby DISMISSED without prejudice. THUS DONE AND SIGNED at Alexandria, Louisiana, this ____ day of ______________________, 2017. HONORABLE DEE D. DRELL UNITED STATES DISTRICT JUDGE Case 1:16-cv-00873-DDD-JPM Document 15-2 Filed 02/09/17 Page 1 of 1 PageID #: 107