OPINION
Oakland Medical Group, P.C., is a Michigan corporation that provides a range of medical services, including clinical laboratory services, at multiplе locations. Dr. Harold Margolis is an Oakland shareholder. The Secretary of Health and Human Services, through the Health Care Financing Administration, revoked Oakland’s certification to perform laboratory testing, thereby rendering Oakland ineligible to receive Medicare payments. Before exhausting their administrative remedies, Oakland and Margolis brought a lawsuit in the Eastern District of Michigan (1) challenging the substance of the decision to revoke Oakland’s certification and (2) сlaiming that the Secretary’s failure to continue Medicare payments while Oakland sought review of the revocation deci
I.
The Clinical Laboratory Improvement Amendments of 1988, 42 U.S.C. § 263a, and implementing regulations, 42 C.F.R. Part 493, regulate all clinical laboratory services in the United States. Only laboratories that have a valid laboratory testing certificate under the 1988 Amendments may perform laboratory testing. 42 U.S.C. § 1395x(s)(16) (West 2002). Moreover, under the Medicare Act, a laboratory’s certification under the 1988 Amendments is a precondition to its eligibility to receive Medicare payments for diagnostic testing. See 42 C.F.R. § 493.1842(a)(1) (West 2002); see also 42 U.S.C. § 1395w-2.
Through the Health Care Financing Administration, the Secretary of Health and Human Serviсes may impose sanctions, including suspension of Medicare payments, on any laboratory that does not comply with the 1988 Amendments. . 42 U.S.C. § 1395w-2.
Before cancеling a laboratory’s approval to receive Medicare payments, the Secretary provides written notice of the rationale for his aсtion and the effective date. See 42 C.F.R. § 493.1842(b) (West 2002). Moreover, the Secretary offers the laboratory an “[ojpportunity to submit written evidence or other informatiоn” that would argue against cancellation of its approval to receive Medicare payments. Id.
The regulations for the 1988 Amendments provide that а laboratory dissatisfied with a certificate revocation decision may appeal. See 42 C.F.R. § 493.1844(a)(3), (f)(2) (West 2002). Generally, such an appeal forestalls certificate revocation, which “is not effective until after a hearing decision by an Administrative Law Judge is issued.” 42 C.F.R. § 493.1844(d)(2)(i); see also 42 C.F.R. § 493.1840(e)(1) (West 2002). A request for a hearing, however, does not delay withdrawal of approval for Medicare payments. • 42 C.F.R. § 493.1842(b) (“This sanction may be imposed before the hearing that may be requested by a laboratory, in accordance with the appeals procedures set forth in §§ 493.1844.”); 42 C.F.R. § 493.1844(d)(3).
II.
Effective pursuant to an Administrative Law Judge decision on July 19, 2000, the Secretary revoked the laboratory testing certificate of one of Oakland’s laboratories. After determining Oakland’s ownership of the laboratory, the Secretary revokеd the laboratory testing certificates of all the Oakland-owned laboratories. The Secretary also withdrew its Medicare payment approval for all Oakland-owned laboratories.
Before exhausting their administrative remedies, Oakland and Margolis filed a lawsuit in the Eastern District of Michigan to enjoin the Secretary from withdrawing Oakland’s permission to receive Medicare payments. The district court dismissed the complaint for lack of subject matter jurisdiction.
III.
We review
de novo
the district court’s determination that it lacked subject matter jurisdiction over plaintiffs’ claim.
See Agrawal v. Paul Revere Life Ins. Co.,
A.
Under the Medicare Act, an institution “dissatisfied with a determination by the Secretary [to cancel its eligibility to re-
The Medicare Act limits judicial review of the Secretary’s decisions under either 28 U.S.C. § 1331 (federal question) or 28 U.S.C. § 1346 (United States as defendant) to the methods articulated in section 405(g):
No findings of fact or decision of the Commissioner of Social Security shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.
42 U.S.C.A. § 405(h) (West 2002) (incorporated into the Medicare Act pursuant to 42 U.S.C. § 1395ii). Thus, section 405(h) “ ‘channels most, if not all, Medicare claims through the special review system’ of an administrative hearing and ‘purports to make exclusive the judicial review method set forth in section 405(g).’ ”
Cathedral Rock of North College Hill, Inc. v. Shalala,
Here, Oakland and Margolis challenge the Secrеtary’s decision to cancel Oakland’s eligibility for Medicare payments. Thus, absent an applicable exception, section 405(h) precludes the distriсt court from exercising subject matter jurisdiction over their claim.
B.
Section 405(g)’s exhaustion requirement may be waived where a plaintiffs claim is “entirely collatеral” to his substantive claim of entitlement and he makes a colorable claim that he could not obtain full relief through retroactive benefits awarded in a post-deprivation hearing.
Mathews v. Eldridge,
In Cathedral Rock, a nursing facility challenged the Secretary’s determination that it was not in compliance with Medicare regulations and claimed that the Fifth Amendment’s Due Process Clause mandated a hearing before the cancellation of its Medicare payment eligibility. This court found' that the plаintiffs procedural due process claim was entirely collateral and, therefore, turned to the issue of whether the nursing facility made “a colorable claim that full relief would not be possible if it was awarded retroactive relief through a post-deprivation hearing.” Id. at 364.
Relying on the factors articulated by the Supreme Court in
Eldridge
for determining whether procedural duе process requires a pre-termination hearing, the
Cathedral
Rock. court determined that the nursing facility did not state a cognizable due process claim.
See id.
at 365-66 (сoncluding that the nursing facility was not constitutionally entitled to a pre-termi-nation hearing). The
Eldridge
factors are: (1) “the private interests that will be affected by the official action”; (2) “the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of the additional оr
Application of the Eldridge factors here reaffirms the soundness of the
Cathedral Rock
decision: First, although the economic impact of canceling Medicare eligibility is significant, “a provider’s financial need to be subsidized for the care of its Medicare patients is only incidental to the purpose and design of the [Medicare] program.”
Cathedral Rock,
Because Oakland does not have a due process right to a pre-termination hearing, plaintiffs do not state a colorable constitutional claim.
IV.
For the foregoing reasons, we AFFIRM the judgment of the district court.