Cumberland County Hospital System, Inc. v. Burwell, 816 F.3d 48

Background

Cape Fear Valley Health System (Hospital System) had over 750 Medicare reimbursement appeals pending >90 days before OMHA, involving about $12.3 million, amid an agency backlog exceeding hundreds of thousands of appeals.
The Hospital System filed for a writ of mandamus compelling HHS/Secretary to assign and have ALJs decide its appeals within the Medicare Act’s 90-day ALJ-decision deadline (42 U.S.C. § 1395ff(d)(1)(A)), and sought a declaratory judgment that HHS’s delays violated federal law.
HHS conceded a massive backlog (published HHS figures reached 480,000–800,000 appeals), blamed increased appeals and limited congressional funding, and noted proposed budgetary/process fixes; OMHA staffing made a speedy disposition infeasible.
The district court dismissed under Rule 12(b)(6): (1) plaintiff lacked a clear and indisputable right to mandamus enforcement of the 90‑day ALJ deadline; and (2) equitable/discretionary relief was inappropriate because judicial intervention would interfere with the agency’s institutional role and priorities.
The Fourth Circuit affirmed, holding that the Medicare statutory scheme provides an administrative escalation remedy (bypass to the Departmental Appeals Board and ultimately court) rather than a mandamus‑enforceable right to an ALJ decision within 90 days, and that separation‑of‑powers and institutional competence weigh against the requested relief.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
1. Does the Medicare Act create a mandamus‑enforceable right to an ALJ decision within 90 days?	The Act’s mandatory language ("shall...render a decision" within 90 days) creates a clear, indisputable right enforceable by mandamus.	The 90‑day requirement is part of a broader administrative scheme; Congress provided escalation remedies if deadlines are missed, not immediate court enforcement.	No. The statute gives deadlines but not an indisputable right to judicially enforce an ALJ decision within 90 days via mandamus.
2. Is the provided escalation remedy (bypass to DAB/court) an adequate statutory remedy that precludes mandamus?	Escalation is discretionary and would force appellants to forgo creating an ALJ record; thus it’s inadequate as an exclusive remedy.	Escalation is the remedy Congress provided; parties can create their record earlier (at QIC) and may bypass levels if deadlines are missed.	Yes. Escalation to the Departmental Appeals Board (and ultimately court) is the statutory remedy Congress provided and undermines mandamus entitlement.
3. Should equitable/discretionary mandamus relief be granted despite backlog and alleged agency mismanagement?	Judicial intervention is needed to prevent indefinite delay and harm to provider operations.	Court intrusion would disrupt the statutory administrative process, displace agency priority setting, and produce no net gain (just reorder queues).	Denied. Separation‑of‑powers, institutional competence, and equity counsel against mandamus; political branches should address backlog.
4. Can plaintiff obtain declaratory relief that HHS’s delays violate federal law?	Sought a declaration that HHS’s delay violates the Medicare Act.	Declaratory relief depends on a viable substantive claim; no mandamus claim means no independent basis.	Denied. Declaratory claim dismissed because it rests on the rejected mandamus theory; the Declaratory Judgment Act supplies no independent substantive right.

Key Cases Cited

Kerr v. U.S. Dist. Court for the N. Dist. of Cal., 426 U.S. 394 (describing mandamus as an extraordinary remedy)
Gustafson v. Alloyd Co., 513 U.S. 561 (statutes must be read as a coherent regulatory scheme)
King v. Burwell, 135 S. Ct. 2480 (statutory text must be read in context of overall scheme)
FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (courts should not interpret statutory provisions in isolation)
Heckler v. Ringer, 466 U.S. 602 (administrative remedies and exhaustion in Medicare context)
In re Barr Labs., 930 F.2d 72 (deference to agency priority‑setting; courts slow to assume command over agency choices)
Medtronic Inc. v. Mirowski Family Ventures, LLC, 134 S. Ct. 843 (Declaratory Judgment Act is procedural and does not create substantive rights)