108 Fed. Cl. 321
Fed. Cl.2012Background
- AAA Pharmacy's Medicare billing privileges were revoked, triggering alleged regulatory violations and loss of business.
- NSC/CMS process allowed a hearing and administrative review; delays allegedly caused by the NSC and CMS.
- Plaintiff filed suit seeking damages for takings and due process claims, plus breach of implied-in-fact contract.
- District Court previously dismissed some related claims as FTCA-related or lacking exhaustion, and suggested transfer to Tucker Act court.
- Defendant moved to dismiss for lack of jurisdiction, arguing Medicare Act provides a comprehensive review scheme preempting Tucker Act jurisdiction.
- Court ruled in part: dismissed state-law and Secretary Sebelius claims and breach-of-implied-in-fact contract; allowed takings claim to proceed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does Tucker Act jurisdiction exist for plaintiff's takings claim? | Tucker Act permits money damages for government takings not arising under the Act. | Medicare Act's comprehensive review precludes Tucker Act jurisdiction over related claims. | Takings claim not precluded; Tucker Act jurisdiction exists. |
| Are claims against Secretary Sebelius and state-law claims dismissed? | Claims include actions by Secretary and state-law theories. | Court lacks jurisdiction over individual officials and state-law claims. | Claims against Secretary Sebelius and all state-law claims dismissed. |
| Is the breach-of-implied-in-fact-contract claim preempted or inadequately pled? | Regulations constitute contractual obligations; failure to follow them breaches implied contract. | No contract with the government; claim falls under Medicare Act review. | Dismissed under RCFC 12(b)(6) for failure to plead a valid contract with the Government. |
| Does the Medicare Act preempt the takings claim or allow it to proceed as regulatory taking? | Delay in revocation process caused a regulatory taking of business profits. | Comprehensive Act review framework preempts such claims arising under Medicare. | Takings claim survives as not arising under Medicare; preemption not applied to this claim. |
Key Cases Cited
- St. Vincent’s Med. Ctr. v. United States, 2 F.3d 550 (Fed.Cir.1994) (comprehensive Medicare review preempts Tucker Act jurisdiction)
- Heckler v. Ringer, 466 U.S. 602 (Supreme Court 1984) (broad meaning of 'arises under' Medicare claims)
- Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1 (Supreme Court 2000) (exhaustion and administrative channels required for Medicare claims)
- Do Sung Uhm v. Humana, Inc., 620 F.3d 1134 (9th Cir.2010) (breach-of-contract claim preemption example; backdoor benefits claim)
- Hanlin v. United States, 316 F.3d 1325 (Fed.Cir.2003) (regulations imposing obligation do not create implied-in-fact contract)
- Ardary v. Aetna Health Plans of Cal., Inc., 98 F.3d 496 (9th Cir.1996) (collateral denial of benefits not arising under Medicare Act; no exhaustion required)
- Appolo Fuels, Inc. v. United States, 381 F.3d 1338 (Fed.Cir.2004) (extraordinary delay in administrative process and Penn Central framework)
- Penn Central Transp. Co. v. City of New York, 438 U.S. 104 (Supreme Court 1978) (three-factor test for regulatory takings)