Temple University Hospital v. Secretary United States Dept, 2 F.4th 121

Background

Temple University Hospital (located in Philadelphia) applied for and on Feb. 21, 2020 was granted reclassification into the New York City CBSA for FY2021–FY2023, which carried a substantially higher wage index.
In 2018 OMB redrew CBSA boundaries, moving Monmouth County out of the New York City CBSA into a new New Brunswick CBSA; the Secretary later adopted those changes and implemented a most-proximate-county reassignment policy.
After the Secretary adopted OMB’s revisions in the FY2021 final rule, the agency reassigned Temple to the New Brunswick CBSA (lower wage index), reducing its Medicare wage-index reimbursement.
Temple then applied for and obtained a separate reclassification into the Vineland–Bridgeton CBSA starting FY2022 and had a statutory deadline (June 24, 2021) to withdraw that reclassification.
Instead of first presenting its wage-index dispute to the Provider Reimbursement Review Board (PRRB), Temple sued the Secretary and other agency officials in district court; the district court granted summary judgment to the Secretary (upholding the reassignment under Chevron).
The Third Circuit, exercising appellate jurisdiction over the district court’s final decision, vacated that judgment and remanded with instructions to dismiss for lack of subject-matter jurisdiction because Temple failed to pursue administrative adjudication as required by the Medicare Act’s channeling provisions.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether federal courts have subject-matter jurisdiction over Temple’s challenge to the CBSA reassignment given the Medicare Act’s channeling requirement	Temple argued it could invoke federal-court jurisdiction (e.g., via §1331) to vindicate its statutory 3‑year reclassification right	Secretary argued the Medicare Act (via §405(h)/§1395ii and §1395oo) channels reimbursement disputes to the PRRB and strips federal-question jurisdiction absent administrative exhaustion	Court held Temple’s claim arises under the Medicare Act and federal-question jurisdiction is barred by the channeling requirement; no jurisdiction
Whether the narrow Illinois Council exception (no meaningful administrative review) applies	Temple argued the exception applies because administrative review would be futile or would prevent full relief (given subsequent Vineland reclassification and COVID-19 timing)	Secretary argued the exception is narrow and Temple has an adequate administrative avenue and eventual judicial review through the PRRB	Court held the exception did not apply: Temple has an administrative remedy and possible judicial review, so channeling stands
Whether alternative statutes (Declaratory Judgment Act, APA, mandamus, All Writs Act) supply jurisdiction	Temple invoked these statutes as bases for district-court jurisdiction or relief	Secretary argued none supply an independent grant of subject-matter jurisdiction or are available because administrative remedies exist	Court held none provide independent jurisdiction; mandamus unavailable because adequate administrative remedies exist
Whether the District Court’s Chevron-based upholding of the reassignment should be reviewed on the merits	Temple contested Chevron deference and sought reversal on Chevron grounds	Secretary defended Chevron deference and the reassignment policy	Court did not reach Chevron merits because it found lack of subject-matter jurisdiction and instructed dismissal of the complaint

Key Cases Cited

Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1 (administrative presentation/channeling requirement before judicial review)
Heckler v. Ringer, 466 U.S. 602 (scope of Medicare channeling and exhaustion)
Good Samaritan Hosp. v. Shalala, 508 U.S. 402 (wage-index challenges can be raised through PRRB appeals)
St. Francis Med. Ctr. v. Shalala, 32 F.3d 805 (3d Cir. recognition that §1395oo permits challenging payment calculation methods)
Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (agency deference framework discussed by parties)
Bellevue Hosp. Ctr. v. Leavitt, 443 F.3d 163 (agency discretion to adopt or depart from OMB CBSA delineations)