Center for Dermatology and Ski v. Sylvia Mathews Burwell
770 F.3d 586
7th Cir.2014Background
- Dr. Robert V. Kolbusz, a participating Medicare dermatologist, was indicted for Medicare fraud in October 2012; the Secretary then imposed fraud-prevention procedures including payment suspension, and Kolbusz withdrew from the Medicare program.
- Kolbusz submitted two batches of claims: (1) 783 claims for services Oct 4–Dec 31, 2012 (55 denied and redetermined against him; reconsideration pending), and (2) ~2300 claims after Jan 1, 2013 (many with no initial determination; ~250 denied and denied on reconsideration and pending before an ALJ).
- Kolbusz sued the HHS Secretary and contractors seeking a writ of mandamus to compel processing of these claims, asserting federal-question, Medicare Act, and mandamus jurisdiction.
- The Secretary moved to dismiss under Fed. R. Civ. P. 12(b)(1) for lack of subject-matter jurisdiction, arguing Kolbusz failed to exhaust Medicare administrative remedies; the district court granted the motion.
- On appeal, the Seventh Circuit affirmed, holding Kolbusz had not exhausted the four-step Medicare appeals process and therefore mandamus jurisdiction was lacking.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether mandamus jurisdiction exists before exhaustion of Medicare administrative remedies | Kolbusz: mandamus available because he challenges Secretary’s claim-processing "procedures," not claim merits, and statutory timing requires processing within 45 days | Secretary: Ringer and circuit precedent require exhaustion of administrative remedies before mandamus; claims under fraud review are not "clean" and have no mandatory processing deadline | Court: Mandamus requires exhaustion; Kolbusz failed to exhaust, so no subject-matter jurisdiction |
| Whether 42 U.S.C. §1395ff(a)(2)(A) creates a mandatory 45-day processing deadline excusing exhaustion | Kolbusz: statute requires government to process claims within 45 days, so administrative delay justifies mandamus | Secretary: statute only directs Secretary when promulgating regulations; regulations set 30-day initial-determination goal and exempt "unclean" (fraud-subject) claims from the deadline | Court: Kolbusz misreads statute; fraud-designated (unclean) claims are exempt, so statute does not excuse exhaustion |
| Whether the procedural/substantive distinction permits immediate mandamus for procedural claims | Kolbusz: his challenge is procedural so mandamus is appropriate without full exhaustion | Secretary: exhaustion still required even for procedural claims under Ringer and circuit precedent | Court: Procedural/substantive distinction does not circumvent exhaustion requirement; prior cases confirm exhaustion applies |
| Whether mandamus is appropriate remedy for alleged processing delays | Kolbusz: seeks writ to compel claim processing | Secretary: administrative appeals are the proper remedy; statute/regulations provide alternate remedies (e.g., interest) | Court: Mandamus inappropriate absent exhaustion; other remedies and administrative process remain available |
Key Cases Cited
- Heckler v. Ringer, 466 U.S. 602 (1984) (mandamus proper only after exhaustion and when defendant owes clear nondiscretionary duty)
- Burnett v. Bowen, 830 F.2d 731 (7th Cir. 1987) (mandamus available for procedural Social Security/Medicare claims only after full administrative exhaustion)
- Michael Reese Hosp. & Med. Ctr. v. Thompson, 427 F.3d 436 (7th Cir. 2005) (applies Ringer; exhaustion is prerequisite to mandamus jurisdiction)
- Ancillary Affiliated Health Servs., Inc. v. Shalala, 165 F.3d 1069 (7th Cir. 1998) (exhaustion requirement applies regardless of characterization as due process or procedural claim)