MEMORANDUM OPINION AND ORDER
Plaintiff, AAA Pharmacy, Inc. (“AAA”), seeks $6,000,000 in damages claiming a taking of its property, a violation of its due process rights under the Fifth and Fourteenth Amendments, and a breach of an implied-in-fact contract, stemming from the revocation of its Medicare billing privileges. Plaintiff argues that Defendant’s revocation of its Medicare billing privileges and its undue delay in adjudicating Plaintiffs administrative claim and restoring those privileges resulted in the loss of Plaintiffs business.
Defendant seeks dismissal pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims (“RGFC”), arguing that this Court lacks subject-matter jurisdiction over Plaintiffs claims because the comprehensive review process set forth under the Social Security Act, 42 U.S.C. § 1395cc (Supp. V 2005), preempts Tucker Act jurisdiction here. 28 U.S.C. § 1491
Background
Medicare Statutes and Regulations
Under the Supplementary Medical Insurance Benefits for the Aged and Disabled (“Medicare Part B”) program, the elderly and persons with disabilities are provided limited coverage for items such as durable medical equipment, prosthetic devices, pros-thetics, orthotics, and оther supplies (“DME-POS”). 42 U.S.C. § 1395x(n); 42 C.F.R. Part 414, Subpart D (2005). Medicare Part B is administered by private organizations known as earners. 42 C.F.R. §§ 414.200-414.232 (2005). Carriers contract with and are overseen by the Centers for Medicare and Medicaid Services (“CMS”), a division of the United States Department of Health and Human Services (“HHS”). Carriers process reimbursement claims for DMEPOS that Medicare suppliers provide to beneficiaries. 42 C.F.R. § 421.210(e).
Carriers also administer DMEPOS supplier enrollment applications, acting as National Supplier Clearinghouses (“NSC”) for specific regions on behalf of HHS. 42 C.F.R. § 421.210(е) (2005); 42 C.F.R. § 424.57(a) (2009).
A NSC not only processes applications for billing privileges and issues billing numbers, but also monitors the enrolled suрpliers to ensure these suppliers continue to comply with regulatory standards. 42 C.F.R. § 424.57(b) and (c). If such standards are not met, a NSC that monitors a supplier, acting as a delegee of the Government, will, together with CMS, revoke a supplier’s billing number. 42 C.F.R. § 424.57(d); 42 C.F.R. § 405.874(b).
After a supplier receives notification that its billing privileges will be revoked, the supplier may request a hearing before a neutral party within 90 days. 42 C.F.R. § 405.874(b). A NSC must schedule a hear
Factual Background
Plaintiff was a pharmacy operating as a DMEPOS supplier in Oklahoma with Medicare billing privileges. Compl. ¶9. On or around December 15, 2005, Plaintiff received notice that its billing number would be revoked for failure to comply with nine standards in the regulations implementing the Medicare Act. 42 C.F.R. § 424.57(c); Compl. ¶¶ 11-19. The NSC overseeing Plaintiffs billing privileges informed Plaintiff that its billing number would be revoked 15 days later. Compl. ¶ 11. On December 29, 2005, Plaintiff timely requested а hearing from the NSC Hearing and Appeals Department to appeal the revocation, claiming AAA was in compliance with all nine standards. Compl. ¶ 21. Prior to the hearing, in February 2006, the NSC overseeing Plaintiffs billing privileges determined AAA was in compliance with seven of the nine allegedly violated standards, after the NSC received Plaintiffs corrective action plan. Only two violations were left at issue — a violation of Supplier Standard One for noncomplianee with Nevada state regulations and Supplier Standard Five for failure to аdvise beneficiaries of their option to rent or purchase certain medical equipment. Compl. ¶ 24.
Even though CMS’ regulation, § 405.874(c), requires that a hearing be scheduled within one week after the request, the NSC overseeing Plaintiffs billing privileges did not conduct a hearing until March 24, 2006, some three months later. Compl. ¶ 29.
Plaintiff alleges that by the time its privileges were reinstated, the pharmacy had been forced to close. Compl. ¶ 31. Plaintiff contends that the revocation forced the entire pharmacy out of operation, because for approximately 100 days, from December 30, 2005, to April 10, 2006, Plaintiff lost the ability to bill Medicare for the items that Plaintiff provided to Medicare beneficiaries. Plaintiff alleges it was effectively unable to conduct business during this time:
Plaintiff had not done any business with Medicare and Medicaid beneficiaries due to the late December 2005 revocation of its provider agreemеnt and billing number. Therefore, Plaintiff had to close its doors for good. Plaintiff had gone over three months without being able to do business with the majority of its clients. Because of the government contractor’s actions and inactions, Plaintiff closed its doors, terminated its employees, returned the inventory, and let the leases on the building go.
Compl. ¶ 32. Plaintiff claims that a majority of its business came from servicing Medicare beneficiaries, but it does not specify what percentage of its business constituted providing DMEPOS to Medicare beneficiaries.
On Novembеr 1, 2007, Plaintiff filed a lawsuit against the NSC overseeing Plaintiffs billing privileges — Blue Cross and Blue Shield of South Carolina, along with its subsidiary, Palmetto GBA, L.L.C. — and employ
The District Court found it lacked subject-matter jurisdiction over 13 claims. AAA Pharmacy, Inc. v. Palmetto GBA, L.L.C., No. CIV-07-1221-F,
The District Court dismissed the remaining takings and due process claims without prejudice, to allow Plaintiff to revise these claims and bring them in this Court. Id. at *6. The District Court stated:
If plaintiff wishes to re-allege its takings claim as a claim against the United States only for money damages, or ... to amend [their breach of implied contract claim] to allege a breach of contract claim against the United States only for money damages ... any such amended claims will likely be transferred to the United States Court of Claims under the Tucker Act....
Id.
Plaintiff now brings two claims in this Court, alleging that: (1) Defendant effected a taking of its property by failing to follow procedures in 42 C.F.R. § 405.874, resulting in a loss of Plaintiffs business, and (2) Defendant breached an implied-in-fact contract between Plaintiff and the Government when the Government failed to adhere to mandatory procedures under the Medicare Act. Compl. ¶¶ 34-39; Pl.’s Resp. to Def.’s Mot. to Dismiss (“Pl.’s Resp.”) ¶20. Plaintiff requests monetary damages for “the loss of the business and the loss of continued income over a ten year period.”
Discussion
Plaintiff bears the burden of establishing subject-matter jurisdiction. Reynolds v. Army & Air Force Exch. Serv.,
The United States Court of Federal Claims “is a court of limited jurisdiction.” Fullard,
The Tucker Act confers jurisdiction upon the Court to hear claims “against the United States founded either upon the Constitution, or any Act of Congress or any regulation of an executive department, or upon any express or implied contract with the United States, or for liquidated or unliq-uidated damages in cases not sounding in tort.” 28 U.S.C. § 1491(a)(1). The Act provides a waiver of sovereign immunity enabling a plaintiff to sue the United States for money damages. United States v. Mitchell,
The Court Does Not Possess Jurisdiction Over Claims Against the Secretary of the U.S. Department of Health and Human Serviсes or Claims Based on State Law
Plaintiff named Secretary Sebelius and the United States as Defendants. The Court only possesses jurisdiction to hear claims against the United States. See 28 U.S.C. § 1491. The Tucker Act does not grant this Court jurisdiction over suits against individual federal officials. Pikulin v. United States,
In addition to federal constitutional and statutory claims, Plaintiff also alleges the federal Government violated the takings clause of the Oklahoma Constitution. However, this Court does not have jurisdiction over claims founded upon state law. Souders v. S.C. Pub. Serv. Auth.,
Plaintiff Has Failed to Allege an Actionable Breach of Contract Claim
Defendant argues that the Medicare Act’s comprehensive review process preempts the Court’s Tucker Act jurisdiction over Plaintiffs breach of contract claim. Plaintiff alleges that this Court has jurisdiction over its claim for breach of an implied-in-fact contract, asserting:
When NSC failed to set the fair hearing within one week of the receipt of the request for hearing, it violated Plaintiffs due process guaranteed by [42 C.F.R. § 405.874] and the Constitution. 42 C.F.R. § 405.874 is one of the many regulations that govern the conduct of Plaintiff and Defendant under the Medicare program. These regulations became mandatory when Plaintiff received its enrollment in Medicare. The application of regulations are contractual in nature through the Medicare agreеment, and Defendant’s failure to follow them is a breach of an implied in fact contract.
Compl. ¶ 36.
The Tucker Act’s grant of jurisdiction is preempted where Congress has enacted “a precisely drawn, comprehensive and detailed scheme of review in another forum. ...” St. Vincent’s Med. Ctr. v. United States,
The Medicare statute provides for a hearing and judicial review when a supplier’s billing privilege is revoked. 42 U.S.C. § 1395cc(j)(2); CMS Pub. 100-08, Change Request 3601. Under Medicare’s statutory regime, judicial review of a claim that arises under the Medicare Act is afforded only after the Secretary makes a final decision on such claim, with judicial review to be conducted in a United States District Court. 42 U.S.C. 1395cc(h)(l)(A); 42 U.S.C. § 405(g). Section 405(g) states “[a]ny individual, after any final decision of the Commissioner ... made after a hearing to which he was a party ... may obtain a review of such decision by a civil action ... [and] [s]uch action shall be brought in the district court of the United States.” Under § 405(g), a party must exhaust administrative remedies before seeking judicial review. The Supreme Court has found that any action that “arises under” the Medicare Act must be channeled through the Act’s prescribed administrative review channel before judicial review. Shalala v. Ill. Council on Long Term Care, Inc.,
Whether one characterizes this breach of contract claim as being preempted by the Medicare Act or as failing to state a claim upon which relief can be granted, Plaintiffs claim is subject to summary dismissal. In Do Sung Uhm v. Humana, Inc., the Ninth Circuit found that a breach of contract claim was preempted by the Act’s comprehensive review procedure because the breach of contract claim “at bottom” was “merely [a] creatively disguised claim for benefits.”
Here, although Plaintiff is not seeking benefits, its breach of contract claim is predicated solely on Defendant’s alleged failure to follow Medicare regulations. While it is clear that this Court has jurisdiction ovеr a breach of contract claim against the United States, Plaintiff has failed to allege the elements of a contract with the Government—offer, acceptance, consideration, and authoi’ity of a Government agent. See Hanlin v. United States,
Only when statutes or regulations have clearly expressed the Government’s intent to enter into a contractual arrangement with program participants have courts found an implied-in-fact contract. See, e.g., Grav v. United States,
Plaintiff’s Takings Claim
Plaintiff alleges that the Government effected a taking of Plaintiffs business when the Government failed to comply with procedural time limits for resolving Plaintiffs aрpeal in violation of Medicare Act regulations. 42 C.F.R. § 405.874; Compl. ¶35.
The Takings Clause states that private property shall not be taken for public use without just compensation. U.S. Const, amend. V, cl. 4. The Government may commit a taking of private property either by physical invasion or by regulation. Lucas v. S.C. Coastal Council,
Even when a Government action does not render property valueless, it may still amount to a compensable taking of property. Rith Energy, Inc. v. United States,
To determine whether a claimant suffered a partial taking, the Federal Circuit applies the test articulated by the Supreme Court in Penn Central. Maritrans Inc. v. United States,
Courts have recognized that an extraordinary delay in the regulatory process may give rise to takings liability. Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Planning Agency,
Although Plaintiff has characterized its claim as a regulatory taking, Defendant contеnds that this claim arises under the Medicare Act and that Tucker Act jurisdiction is preempted.
“Courts have consistently found preemption of Tucker Act jurisdiction where Congress has enacted a precisely drawn, comprehensive and detailed scheme of review in another forum....” St. Vincent’s Med. Ctr. v. United States,32 F.3d 548 , 550 (Fed.Cir.1994). In St. Vincent’s, we held that the Medicare Act’s “comprehensive administrative and district court review procedures” give rise to such preemption.*331 Id. at 549. In doing so, we explained that under the Medicare scheme, “a provider seeking judicial review of a denial of reimbursement must first bring its claim before the PRRB. The PRRB will either conduct a hearing concerning the reimbursement dispute or, if the PRRB determines that it lacks authority to rule upon the challenge, it will certify the case for expedited judicial review, which makes available immediate judicial review in the district courts in lieu of an administrative hearing.” Id. (citing 42 U.S.C. § 1395oo(f)(l); 42 C.F.R. § 1842). We concluded that “[bjecause the Medicare Act contains its own comprehensive administrative and judicial review scheme, there is no Tucker Act jurisdiction over Medicare reimbursement claims.” Id. at 549-50.
Although a claim may be predicated on the dеnial of Medicare benefits, it may be wholly collateral to a claim for benefits and thus not arise under the Medicare Act. Ardary v. Aetna Health Plans of Cal., Inc.,
Conclusion
Defendant’s Motion to Dismiss is GRANTED IN PART as follows:
1. The Court DISMISSES Plaintiffs claims against Secretary Sebelius and all claims based upon state law.
2. The Court DISMISSES Plaintiffs breach of implied-in-fact contract claim pursuant to Rule 12(b)(6).
3. The Court DENIES Defendant’s Motion to Dismiss Plaintiffs takings claim for lack of subject-matter jurisdiction.
Notes
. The Social Security Act is the name of the Act under which the Medicare program is authorized, but it is often referred to as the Medicare Act.
. This background describing the Social Security Act, the Medicare Program, and its implementing regulations, is derived from 42 U.S.C. ch. 7, subch. XVIII, and 42 C.F.R. ch. IV, subch. B. Since 2005, the Act’s implementing regulations have been amended on a number of occasions. See, e.g., Medicare and Medicaid Program; Regulatory Provisions to Promote Program Efficiency, Transparency, and Burden Reduction, 77 Fed. Reg. 29028 (May 16, 2012); Medicare Program; Hospital Outpatient Prospective Payment System and CY 2007 Payment Rates, 71 Fed. Reg. 68228 (Nov. 24, 2006). In this opinion, the Court refers to the regulations in place at the time of the revocation of Plaintiff's Medicare billing privilеges. None of the amendments affect the Court’s analysis.
. 42 C.F.R. § 421.210(e)(3) states: "CMS may contract for the performance of National Supplier Clearinghouse functions through a contract amendment to one of the DME regional carrier contracts or through a contract amendment to any Medicare carrier contract.”
42 C.F.R. § 424.57(a) was amended in 2009 to state: "National Supplier Clearinghouse (NSC) is the contractor that is responsible for the enrollment and re-enrollment process for DMEPOS suppliers.” Prior to 2009, the regulation did not include this definition.
.42 C.F.R. § 424.57(d) provides: "Failure to meet standards. CMS will revoke a supplier’s billing privileges if it is found not to meet the standards in paragraphs (b) and (c) of this section."
42 C.F.R. § 405.874(b) states in pertinent part: "[i]f the National Supplier Clearinghouse disallows an entity’s request for a billing number or revokes, with the concurrence of CMS, an entity’s billing number, the National Supplier Clearinghouse notifies the entity by certified mail.”
. The administrative law judge serves on the Medicare Appeals Council, a unit within HHS.
. The factual background is derived from the Complaint and its attachments and the exhibits to Dеfendant's Motion to Dismiss.
.The record does not indicate the cause for the delay.
. Plaintiff claims damages began accruing on approximately December 30, 2005, some six years before filing the instant suit.
. Defendant sought dismissal for lack of jurisdiction based on preemption. Def.’s Mot. at 10-15. This Court recognizes that, in general, sua sponte Rule 12(b)(6) dismissals are erroneous if parties have not been afforded notice that the complaint insufficiently states a claim and an opportunity to amend the complaint. See Chute v. Walker,
. Additionally, Plaintiff alleges the Government’s action violated the Fourteenth Amendment. However, Fourteenth Amendment claims apply only to state government and not thе United States. Souders,
. Defendant correctly points out that this Court lacks jurisdiction to consider Plaintiffs claim that its due process rights were violated. See Crocker v. United States,
. This Court makes no finding on the merits of Plaintiff’s taking claim at this juncture.