Council for Urological Interests v. Sebelius
754 F. Supp. 2d 78
D.D.C.2010Background
- CUI sues CMS and HHS Secretary under APA and RFA challenging Stark Act-based revisions.
- Laser urology joint ventures purchase equipment and provide treatment but face reimbursement restrictions.
- CMS 2001 regulations allowed per-procedure payments under arrangement with hospitals; 2009 revisions expand DHS and ban per-procedure payments.
- CUI argues the revisions prohibit physician-owned joint ventures from providing laser treatments via 'under arrangement' contracts.
- Dispute centers on whether Illinois Council exception to § 405(h) applies, allowing federal question review despite channeling.
- Court holds § 405(h) bars review; Illinois Council exception inapplicable after analyzing feasibility and incentives.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 405(h) deprive jurisdiction over APA/RFA claims? | CUI argues Illinois Council exception applies; direct review blocked otherwise. | Providers cannot show proxy access; Illinois Council applies; no jurisdiction. | § 405(h) bars jurisdiction; Illinois Council exception inapplicable. |
| Scope of Illinois Council inquiry | Inquiry should focus on plaintiff-specific ability to obtain review. | Inquiry is broader, focusing on the regime's effect on all covered parties. | Inquiry is plaintiff-specific; Illinois Council applies to CUI's circumstances. |
| Are proxies or intermediaries feasible to present claims? | Hospitals could proxy via test claims; practical impediments exist due to Stark. | No payment test claims allowed; hospitals can act as proxies; review feasible. | Hospitals could present a no-payment test claim; proxy incentives not dispositive. |
| Do Stark sanctions create effective denial of review? | Compliance pressure would deter challenges; could dissolve joint ventures. | No payment claims avoid sanctions; sanctions do not preclude review. | Sanctions not shown to cause effective denial of review; Illinois Council not satisfied. |
Key Cases Cited
- Illinois Council on Long-Term Care, Inc. v. Shalala, 529 U.S. 1 (U.S. Supreme Court, 2000) (channeling rule with hardship exceptions to review)
- American Chiropractic Ass'n, Inc. v. Leavitt, 431 F.3d 812 (D.C. Cir. 2005) (proxy incentives not determinative in Illinois Council)
- Colorado Heart Inst. v. Johnson, 609 F. Supp. 2d 30 (D.D.C. 2009) (persuades proxy incentives not required for jurisdictional analysis)
- American Lithotripsy Soc'y v. Thompson, 215 F. Supp. 2d 23 (D.D.C. 2002) (early approach to 405(h) and channeling considerations)
- Atl. Urological Assocs. v. Leavitt, 549 F. Supp. 2d 20 (D.D.C. 2008) (no-payment claims and administrative challenge viability)
- Triad at Jeffersonville, LLC v. Leavitt, 563 F. Supp. 2d 1 (D.D.C. 2008) (delay hardship analysis in Illinois Council context)
- National Athletic Trainers' Ass'n, Inc. v. HHS, 455 F.3d 500 (5th Cir. 2006) (circuits split on proxy incentives and review viability)