843 F. Supp. 2d 1218
S.D. Ala.2012Background
- GOS Operator runs Gordon Oaks Healthcare Center, a Mobile, Alabama skilled nursing facility, under a Medicare provider agreement with the Secretary of Health and Human Services.
- The Secretary intends to terminate Gordon Oaks’s Provider Agreement based on six months of CMS on-site surveys (July 2011–January 2012) finding not substantial compliance.
- CMS issued a January 19, 2012 termination notice stating the agreement would terminate at midnight January 21, 2012, with limited post-termination patient payments to assist transfers.
- GOS invoked the administrative appeals process for each deficiency finding and sought expedited hearings; no expedited hearing had occurred, and a pretermination hearing was not provided.
- GOS sued January 19, 2012 seeking to preserve the status quo pending administrative review, seeking preliminary injunctive relief; TRO was entered and later extended, now subject to Rule 65 analysis.
- Court proceedings address jurisdiction under §405(h) channeling and the merits of GOS’s procedural due process and ultra vires challenges, ultimately denying the preliminary injunction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether §405(h) channeling bars federal-question jurisdiction | GOS contends claims do not arise under Medicare Act | Government argues channeling applies to compel agency review | Channeling applies; court retains jurisdiction under collateral Eldridge analysis |
| Whether GOS’s claims arise under the Medicare Act for §405(h) purposes | Claims arise under Medicare Act | Claims do not arise under the Act | Court finds claims arise under the Medicare Act in broad sense but resolved under Eldridge analysis |
| Whether the Illinois Council “no review at all” exception applies | No meaningful review if review is postponed | Exception applies in some serious hardships | Illinois Council exception not satisfied; court uses Eldridge collateral exception instead |
| Whether GOS is entitled to a preliminary injunction on the merits | Procedural due process and ultra vires claims show likelihood of success | No likelihood of success on merits | No substantial likelihood of success on any asserted ground; injunction denied |
Key Cases Cited
- Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (U.S. 2000) (channeling and exhaustion framework for Medicare claims)
- Illinois Council on Long Term Care, Inc. v. Shalala, 529 U.S. 1 (U.S. 2000) (context of no-review-at-all and collateral claim considerations (Illinois Council))
- Mathews v. Eldridge, 424 U.S. 319 (U.S. 1976) (collateral arguments and exhaustion waivers under 405(g) and 405(h) analysis)
- Lifestar Ambulance Service, Inc. v. United States, 365 F.3d 1293 (11th Cir. 2004) (Medicare channeling and collateral review considerations)
- O’Bannon v. Town Court Nursing Center, 447 U.S. 773 (U.S. 1980) (no due process pretermination right for Medicare providers)
- Vencor Nursing Centers, L.P. v. Shalala, 63 F. Supp. 2d 1 (D.D.C. 1999) (OBRA amendments and intermediate sanctions context)
- Cathedral Rock of North College Hill, Inc. v. Shalala, 223 F.3d 354 (6th Cir. 2000) (provider process protections and termination authorities)
- Northlake Community Hospital v. United States, 654 F.2d 1234 (7th Cir. 1981) (due process in Medicare provider terminations)