691 F.3d 649
5th Cir.2012Background
- Plaintiffs challenge Section 6001 of the ACA as applied to physician-owned hospitals and seek injunctive relief.
- The Stark Law lineage restricts Medicare reimbursement where a referring physician has ownership interests.
- Section 6001, as amended, grandfathered physician-owned hospitals but barred expansion without Secretarial approval.
- TSJH paused its planned $30 million expansion due to the new law and the risk of large sunk costs.
- District court denied dismissal and granted summary judgment for the Secretary; court dismissed for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the claims arise under the Medicare Act | Plaintiffs claim constitutional issues and seek advance planning relief | Claims do not arise under the Act unless properly reviewed | Yes; claims arise under the Medicare Act |
| Whether §405(h) channels but delays judicial review rather than precluding it | §405(h) precludes any review unless congressional intent is clear and convincing | §405(h) channels and delays review, not preclude it | §405(h) delays but does not preclude review |
| Whether Illinois Council exception applies to permit review despite channeling | Hardship is widespread and would preclude review | No complete preclusion; hardship not sufficiently widespread | Illinois Council exception does not apply |
| Whether district court lacked subject-matter jurisdiction | Jurisdiction exists if claims arise under federal law and channeling allows review | Channeling statutes deprive courts of jurisdiction absent exception | District court lacked subject-matter jurisdiction; VACATED and DISMISSED |
Key Cases Cited
- Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1 (U.S. 2000) (exhaustion through agency review is required; §405(h) channels review)
- Weinberger v. Salfi, 422 U.S. 749 (U.S. 1975) (constitutional challenges may be channeled via §405(h) unless complete preclusion)
- Heckler v. Ringer, 466 U.S. 602 (U.S. 1984) (Medicare challenges fall under the Act; review balancing hardships)
- Bowen v. Mich. Acad. of Family Physicians, 476 U.S. 667 (U.S. 1986) (no forum if administrative path unavailable, but review under the Act still exists)
- Nat’l Athletic Trainers’ Ass’n, Inc. v. U.S. Dept. of Health & Human Servs., 455 F.3d 500 (5th Cir. 2006) (illustrates limitations of Illinois Council and channeling)
- Council for Urological Interests v. Sebelius, 668 F.3d 704 (D.C. Cir. 2011) (illustrates narrowing of Illinois Council exception)