Alvarado Hospital, LLC v. Cochran, 2017 U.S. App. LEXIS 15922

Background

Prime Hospitals (16 hospitals) accepted a CMS settlement offer to resolve thousands of denied Medicare "short‑stay" appeals by submitting spreadsheets and signed settlement agreements, allegedly entitling them to 68% of net payable amounts (~$23.2M).
CMS refused to execute the settlement, excluding Prime Hospitals because of alleged ongoing False Claims Act investigations; Prime Hospitals sued in district court for breach of contract and alternatively for declaratory, injunctive, and mandamus relief alleging a secret policy delaying administrative exhaustion.
The Secretary moved to dismiss or transfer, arguing the Tucker Act gives the Court of Federal Claims exclusive jurisdiction over contract claims against the United States.
The district court transferred the entire case to the Court of Federal Claims; Prime Hospitals appealed the transfer order.
The Federal Circuit reviewed whether (1) the Court of Federal Claims has Tucker Act jurisdiction over the asserted breach of a Medicare‑related settlement, and (2) whether the Claims Court has jurisdiction over the alternative equitable/mandamus claims.
The panel majority held the breach‑of‑contract claim belongs in the Court of Federal Claims under the Tucker Act, but declaratory, injunctive, and mandamus claims do not and must remain (or return) to district court; Judge Newman dissented, arguing Medicare’s exclusive review scheme covers the dispute.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Tucker Act (Court of Federal Claims) has jurisdiction over Prime Hospitals’ breach of the alleged CMS settlement agreement	The dispute is enforcement of an express settlement contract with the U.S.; contract law (not Medicare Act) supplies the substance so Tucker Act applies	The Medicare Act’s comprehensive administrative and judicial review scheme governs Medicare reimbursement disputes and preempts Tucker Act jurisdiction	Held: Tucker Act jurisdiction exists for the breach‑of‑contract claim; the Claims Court has exclusive jurisdiction over that monetary claim
Whether the Medicare Act’s judicial‑review scheme precludes Court of Federal Claims jurisdiction because the claim "arises under" Medicare	The settlement enforcement is separate from underlying reimbursement appeals and does not seek review of benefits decisions; it seeks the bargained‑for payment	The claim is ultimately a request for Medicare reimbursement and requires eligibility determinations under Medicare rules, so it "arises under" the Medicare Act	Held: The breach claim does not "arise under" the Medicare Act and is not inextricably intertwined with benefit determinations; therefore Medicare review does not preempt Tucker Act jurisdiction
Whether resolving the contract claim would require applying Medicare law and thus defeat Claims Court jurisdiction	Any needed comparison (e.g., matching spreadsheets, determining "eligible claims") is a contractual issue and does not convert the suit into a Medicare benefits action	Determining eligibility for settlement requires applying Medicare regulations to each claim, making the dispute inseparable from Medicare review	Held: The possibility of applying Medicare law to interpret contract terms does not defeat Tucker Act jurisdiction (Del‑Rio principle)
Whether the Court of Federal Claims has jurisdiction over Prime Hospitals’ alternative claims for declaratory, injunctive, and mandamus relief	These claims are tied to the alleged scheme that prevented exhaustion and seek relief related to processing appeals; plaintiff sought them as alternatives	Tucker Act generally does not permit equitable or mandamus relief in the Claims Court; mandamus jurisdiction is vested in district courts	Held: Claims for declaratory, injunctive, and mandamus relief are not within the Claims Court’s jurisdiction; transfer of those claims was reversed

Key Cases Cited

Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375 (settlement enforcement is a separate basis for jurisdiction)
Holmes v. United States, 657 F.3d 1303 (Fed. Cir.) (Tucker Act jurisdiction for breach of settlement arising from statutory scheme)
Massie v. United States, 166 F.3d 1184 (Fed. Cir.) (settlement enforcement not precluded by underlying statutory remedy)
Pines Residential Treatment Ctr., Inc. v. United States, 444 F.3d 1379 (Fed. Cir.) (settlement breach may be inextricably intertwined with Medicare benefits)
Del‑Rio Drilling Programs, Inc. v. United States, 146 F.3d 1358 (Fed. Cir.) (application of federal law in resolving contracts does not strip Claims Court jurisdiction)
Heckler v. Ringer, 466 U.S. 602 (Medicare Act’s review scheme is the sole avenue for claims arising under the Act)
United States v. Bormes, 568 U.S. 6 (statutory remedial schemes displace Tucker Act jurisdiction)
St. Vincent’s Med. Ctr. v. United States, 32 F.3d 548 (Fed. Cir.) (Medicare reimbursement claims are not cognizable in Claims Court)