NATIONAL ATHLETIC TRAINERS’ ASSOCIATION, INC., A Texas Non-Profit Organization v. UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES; MICHAEL O. LEAVITT, Secretary of Health and Human Services; MARK MCCLELLAN, Medical Doctor, Administrator, Centers for Medicare & Medicaid
No. 05-11320
United States Court of Appeals, Fifth Circuit
July 3, 2006
FILED July 3, 2006 Charles R. Fulbruge III Clerk
Plaintiff-Appellant,
Defendants-Appellees.
Before HIGGINBOTHAM, DAVIS, and STEWART, Circuit Judges.
CARL E. STEWART, Circuit Judge:
Appellant National Athletic Trainers’ Association, Inc. (“NATA“) appeals from the district court‘s dismissal of its suit for injunctive and declaratory relief for lack of subject matter jurisdiction. NATA brought suit challenging the Secretаry of Health and Human Services‘s (“the Secretary“) implementation of a new rule under the Medicare regulations providing that therapy services administered by athletic trainers incident to physicians’ services are no longer reimbursable under Medicare Part B. The district court concluded that NATA has standing to challenge the new rule;
I. FACTUAL AND PROCEDURAL BACKGROUND
Medicare is a federally funded health insurance program for the elderly and disabled. Medicare Part B, the part of the program at issue here, is a voluntary supplementary medical insurance program covering physicians’ services, outpatient hospital care, and certain other services. Beneficiaries enrolled in Part B are generally entitled to covered “medical and other health services,” including “physician‘s services” and “services and supplies . . . furnished as an incident to a physician‘s professional service.”
in the case of outpatient occupational therapy services or outpatient physical therapy services furnished as an incident to a physician‘s professional services . . . that do not meet the standards and conditions (other than any licensing requirement specified by the Secretary) under the second sentence of section 1395x(p) of this title . . . as such standards and сonditions would apply to such therapy services if furnished by a therapist.
On November 15, 2004, the Secretary of Health and Human Services issued a final rule modifying those portions of the Medicare regulations pertaining to therapy services that are included under the “incident to” coverage of Medicare Part B. The relevant provisions authorize payment for occupational therapy and physical therapy services that are provided “incident to” a physician‘s professional services only if therapy services are provided by an occupational or physical therapist who meets the qualifications provided by
NATA filed suit on May 27, 2005, seeking a declaratory judgment and an injunction against enforcement of the new rule. The Secretary filed a motion to dismiss arguing that NATA lacked standing and that jurisdiction over the claims was precluded by a statutory bar against
II. DISCUSSION
A. Standard of Review
This court reviews questions of standing de novo. Delta Commercial Fisheries Ass‘n v. Gulf of Mex. Fishery Mgmt. Council, 364 F.3d 269, 272 (5th Cir. 2004). We also review a district court‘s grant of a motion to dismiss for lack of subject matter jurisdiction de novo. John Corp. v. City of Houston, 214 F.3d 573, 576 (5th Cir. 2000).
B. Standing
In addition to satisfying the Article III requirements for standing, a plaintiff challenging an administrative agency‘s decision must also show that “the interest sought to be protected by the complainant [is] arguаbly within the zone of interests to be protected or regulated by the statute or constitutional guarantee in question.” Clarke v. Sec. Indus. Ass‘n, 479 U.S. 388, 396 (1987) (quoting Ass‘n of Data Processing Serv. Orgs., Inc. v. Camp, 397 U.S. 150, 153 (1970)). The Supreme Court has explained that
[i]n cases where the plaintiff is not itself the subject of the contested regulatory action, the test denies a right of review if the plaintiff‘s interests are so marginally related to or inconsistent with the purposes implicit in the statute that it cannot reasonably be assumed that Congress intended to permit the suit. The test is not meant to be especially demanding; in particular, there need be no indication of congressional purpose to benefit the would-be plaintiff.
Id. at 399-400 (footnote omitted); see also Corrosion Proof Fittings v. EPA, 947 F.2d 1201, 1209 (5th Cir. 1991).
The Secretary argues that NATA lacks prudential standing because its interest is not within the zone of interests protected by the provision of the statute NATA is challenging. We disagree. The purpose of the amendment appears to be standardizing the quality of therapy services provided to Medicare beneficiaries. Accordingly, the interests protected by the statute are the Medicare beneficiary‘s interest in receiving and the physician‘s interest in providing quality care. NATA‘s interest comports with the physician‘s interest in providing services and the Medicare beneficiary‘s interest in receiving those services. Cf. Am. Chiropractic Ass‘n, Inc. v. Leavitt, 431 F.3d 812, 816 (D.C. Cir. 2005) (“[T]he interests of еnrollees and the interests of chiropractors converge: the chiropractor provides the service, the enrollee receives it, and Medicare provides reimbursement. This is more than enough to satisfy the less-than-demanding zone-of-interest test.“). NATA‘s interest in providing services to Medicare beneficiaries is sufficient to satisfy the zone of interests tests; accordingly, the district court correсtly concluded that NATA has standing to challenge the rule.
C. Subject Matter Jurisdiction
The Medicare Act limits the jurisdiction of federal courts to review claims brought under the Act by requiring that “virtually all legal attacks” be brought through the agency. Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 13 (2000). Specifically,
The parties agree that NATA‘s members cannot obtain administrative rеview because they are neither beneficiaries nor providers, but they disagree as to whether it is sufficient that the claim that NATA is making can be brought by a third party. The Secretary argues that NATA‘s claims do not fall within the Illinois Council exception because physicians that employ athletic trainers can pursue administrative review and, if such a claim is denied, a physician could seek judicial review in federal court and the court would have jurisdiction to determine the validity of the regulation. NATA contends that it is not sufficient that third parties can assert their claims, and that even if it were sufficient, physicians lack incentive to challenge the rule because of statutory penalties and costs of litigation. We first consider whether it is sufficient that a third party can assert the claim.
In American Chiropractic, 431 F.3d 812, an organization representing chiropractors brought suit under
Unlike the chiropractors in American Chiropractic, the athletic trainers here are not service providers, therefore they cannot become assignees of the patients. Nevertheless, the American Chiropractic court сonsidered both the patient‘s and the chiropractor‘s rights to pursue administrative review. Indeed the court identified the question as follows: “The Association denies that its claims in this case could even become the subject of administrative proceedings. The Secretary argues the opposite. The question therefore is whether the Association could get its claims heard administratively and whether it could receive judicial review after administrative channeling.” Id. at 816; see also Am. Chiropractic Ass‘n, Inc. v. Shalala, 131 F. Supp. 2d 174, 176 (D.D.C. 2001) (“At the outset, the Court notes that the analysis of whether requiring administrative review will result in ‘no review at all’ applies to whether a chiropractor or a Medicare enrollee may assert a claim administratively.“), aff‘d in part, rev‘d in part sub. nom, Am. Chiropractic Ass‘n, Inc. v. Leavitt, 431 F.3d 812, 815 (D.C. Cir. 2005). We are not persuaded that the inability to acquire the physician or beneficiary‘s right to administrative review ends our inquiry; “the question is whether, as applied
Thе parties do not dispute that physicians, as providers, can pursue administrative review, and thereafter seek judicial review if necessary; however, they disagree as to whether physicians have the necessary incentive to do so. NATA contends that a physician who submits a reimbursement claim to Medicare for “incident to” therapy services performed by an athletic trainer knowing those sеrvices are not reimbursable could face criminal charges for making false claims or statements and face penalties ranging from imprisonment up to five years and fines of up to $250,000 for an individual or $500,000 for an organization.1 NATA further observes that most of the fraud-related offenses provide grounds for termination from the Medicare program. In addition to the criminal penalties, NATA contends that a physiсian may risk civil liability under the False Claims Act,
In contrast to Illinois Council, defendant here has not contested plaintiffs’ assertions that if plaintiffs’ members were to refer patients for lithotripsy in violation of defendant‘s regulations, they would be subject to statutory penalties of up to $15,000 per bill submitted to CMMS and disgorgement of payments received from hospitals.
Id. at 29. The court also considered the plaintiffs’ inability to represent themselves before the agency, because like the athletic trainers, they were not providers. Id. at 30. The court ultimately concluded that because of the severe penalties and “lack of either direct access or an adequate proxy in the administrative review process,”
Unlike the circumstances presented in American Lithotripsy, the Secretary specifically counters NATA‘s argument that physicians will face these penalties. The Secretary responds that the statutes identified by NATA only apply where a claimant makes a knowing or intentional false stаtement. Accordingly, the Secretary argues that a physician would not violate any of the statutes by submitting a claim for reimbursement for an athletic trainer‘s services, so long as the physician discloses that services were provided by an athletic trainer and that the regulations therefore prohibited reimbursement. The Secretary explains that physicians have means to disclose that a claim is for statutorily excluded services. Specifically, he argues physicians can use a code, the “GY modifier,” to indicate that the item or service is statutorily non-covered or is not a Medicare benefit.
NATA argues that physicians cannot use the “GY” modifier to submit claims for “incident to” therapy services because it is only available for services that are statutorily excluded from reimbursement. In suppоrt of this argument, NATA submitted the affidavit of Renee M. Brown, a
In Illinois Council, 529 U.S. at 21, the plaintiffs argued that “the regulations, as implemented by the enforcement agencies, deny review in practice by (1) insisting that a nursing home with deficiencies present a corrective plan, (2) imposing no further sanction or remedy if it does so, but
With regard tо the possible criminal liability, as the Secretary argues, these statutes require knowing or intentional false statement, an element that would obviously be lacking if a physician disclosed that the services were not reimbursable. See, e.g., United States v. Moore, 37 F.3d 169, 172 (5th Cir. 1994) (“The federal mail fraud statute under which appellants were charged,
We find the civil liability statutes similarly inapplicable. Like the criminal statutes, the False Claims Act applies to knowing false statements. The Act provides that “the terms ‘knowing’ and ‘knowingly’ mean that a person, with respect to information—(1) has actual knowledge of the
NATA argues that the lack of a challenge by a physician thus far demonstrates that physicians lack incentive to challenge the suit. We disagree. The new rule took effect on January 1, 2005, but implementation was delayed until appropriate manual instructions were published, and was further delayed by this litigation. Consequently, a sufficient period of time has not elapsed for us to infer from the lack of a challenge that there will be no challenge. Further, physicians have already demonstrated their concern about the rule through public comments in response to the proposed rule. For example, they argued that “they believe it is their right and within their authority to decide who can provide effective therapy services in their offices” and the AMA urged the agency “to withdraw proposed
III. CONCLUSION
For the foregoing reasons we AFFIRM the district court‘s dismissal of NATA‘s complaint for lack of subject matter jurisdiction.
CARL E. STEWART
UNITED STATES CIRCUIT JUDGE