MEMORANDUM OPINION 1
Thе plaintiff, Power Mobility Coalition (the “Coalition”), “is a national, non-profit association whose membership includes manufacturers and suppliers of motorized scooters and power wheelchairs.” Complaint for Declaratory and Injunctive Relief (“Compl.”) ¶ 4. On behalf of its memberships, the plaintiff request that this Court issue a preliminary injunction that would enjoin the enforcement of the new regulations promulgated by the Department of Health and Human Services (“HHS”) through its Interim Final Rule entitled Conditions for Payment of Power Mobility Devices, Including Power Wheelchairs and Power-Operated Vehicles, (“PMD payment rule”), 70 Fed.Reg. 50,-940, and adopted on August 26, 2005 (to be codified at 42 C.F.R. pt. 410). Plaintiffs Motion for Preliminary Injunctive Relief (“Pl.’s Mot.”), [D.E. # 3] at 1; Compl. at 1. The plaintiffs jurisdictional basis for filing this action in this Court are 28 U.S.C. §§ 1331, 1361, 2201-2202 (2000) and the Administrative Procedure Act, 5 U.S.C. §§ 701-706 (2000). Compl. at 2. The plaintiff alleges that the Interim Final Rule, which became effective оn October 25, 2005, was issued without notice and the opportunity for comment, and -will radically change the procedures for obtaining reimbursement for motorized wheelchairs and scooters (known as power mobility devices or PMDs) under the Medicare program. Pl.’s Mot. at 1; Compl. at 2. The plaintiff also contends that the rule is arbitrary, capricious, and not in accordance with law in violation of the Administrative Procedure Act, 5 U.S.C. §§ 553, 706, and the Medicare Act, 42 U.S.C. §§ 1395hh(b), 1395(m)(j)(2) (2000). Compl. at 1-2.
Specifically, the plaintiff proclaims that “[ujnder current Medicare procedures, which reflect specific congressional direction, claimants submit a standardized form to HHS that contains information tailored to identify whether a beneficiary’s motorized wheelchair or scooter is reimbursable under the program.” Pl.’s Mot. at 1-2. However, according to the plaintiff, the new regulations eliminate this standardization approach and establish a highly discretionary, and much more costly system, in which the plaintiffs members are required to collect and review patients’ medical records to determine whether the records establish eligibility for the use of PMDs to the satisfaction of HHS. Id. at 2.
On the other hand, the defendants opine that “[t]he new rule is not defective because it has been first issued as an interim final rule with a comment period rather than as a notice of proposed rulemaking.” Defendants’ Memorandum in Opposition to Plaintiffs Motion for Preliminary Injunction (“Defs.’ Opp’n”) at 2-3. They contend that “[the rule] is exempt from the notice and comment requirements of the APA because portions of it merely conform
For the reasons discussed below, the plaintiffs motion is denied.
1. Background
The Medicare Act was established under Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395hhh, and provides for the payment of covered medical care services, equipment, and supplies provided to eligible aged and disabled persons. Defs.’ Opp’n at 3. The statute consists of three main parts; however, this case involves only Part B, as the plaintiff is an association that represents durable medical equipment (“DME”) “suppliers.” Id. (citing 42 U.S.C. § 1395x(d); 42 C.F.R. § 400.202.). Part B of the Medicare Act provides supplementary medical insurance for covered medical services, such as doctors’ visits, diagnostic testing, and covered medical supplies, such as DME. Id. (citing 42 U.S.C. §§ 1395j to 1395w-4, 42 C.F.R. Part 410.) 2 In administering Part B, the Administrator of the Center for Medicare and Medicaid Services (“CMS”) acts through private fiscal agents called “carriers.” Id. at 1; 4 (citing 42 U.S.C. § 1395u; 42 C.F.R. Part 421, Subparts A and C, and 42 C.F.R. § 421.5(b)). Carriers are private entities, generally insurance companies, that contract with the Secretary of Health and Human Services (“the Secretary”) to perform a variety of functions, such as making coverage determinations in accordance with the Medicare Act, applicable regulations, the Medicare Part B Supplier Manual, the publicly available Program Integrity Manual (“PIM”), the regional Durable Medical Equipment Regional Carriers (“DMERCs,” “DMER carriers,” or “carriers”) manual, and other guidance materials. Id. Carriers also determine reimbursement rates and allowable payments, conduct audits of the claims submitted for payment, and adjust payments and payment requests. Id. Once a carrier reсeives a claim for services rendered, the carrier pays the Medicare beneficiary on the basis of an itemized bill, and pays the Medicare supplier based on an assignment of benefits executed by the beneficiary. Id. (citing 42 U.S.C. § 1395u(b)(3)(B)). These carrier functions are prescribed by regulation, ie., 42 C.F.R. § 421.200. Id. at 4. DMER carriers process claims for DME (including PMDs) payments within designated regions of the country. 3
As indicated, Part B coverage extends to DME products, including wheelchairs used in the patient’s “home,” which includes institutions other than hospitals or skilled nursing facilities.
Id.
at 7 (internal citations omitted). Customized wheelchairs are covered so long as they are “uniquely
Under the prior regulation that the new regulation replaces, suppliers had to submit a form, known as a Certificate of Medical Necessity (“CMN”), to the regional Medicare DMER carriers for payment for certain DME items. Id. at 7 (citing 42 U.S.C. § 1395m(j)(2)(B) (defining the CMN)). In addition to the CMN, the Secretary has always required suppliers to furnish information sufficient to support payments authorized under Medicare Part B. Id. at 7-8 (citing 42 U.S.C. § 1395Z (e) 2000). This requirement continues under the new rule. Id. at 7. “Consistent with these mandates, the Secretary — through the regional carriers — issued several directives advising suppliers that they were required in some instances to provide medical documentation in addition to the CMNs in order to substantiate compliance with the ‘reasonable and necessary’ requirement of the Act.” Id. at 8 (citing Declaration of John F. Warren (“Warren Deck”) dated October 25, 2005, Exhibit (“Ex.”) A (DMERCs’ instructions to carriers)). 4
“In 2003, Congress enacted the Medicare Prescription Drug, Improvement, and Modernization Act of 2003,” (“Medicare Modernization Act” or “MMA”), id. at 9, which is codified in 42 U.S.C. § 1395m(a)l(E). Title III of that Act, entitled “Combatting Waste, Fraud, and Abuse,” seeks to address and ameliorate fraud related to, inter alia, Medicare claims for PMDs. H.R. Conf. Rep. 108-391 at 575, reprinted in 2003 U.S.C.C.A.N. 1808, 1944 (discussing “ ‘those covered items for which there has been a proliferation of use, consistent findings of charges for covered items that are not delivered, or consistent findings of falsification of documentation to provide for payment of such covered items’ (emphasis in original)).” 5 Defs.’ Opp’n at 10. In pertinent part, the Act provides:
E) Clinical conditions for coverage
(I) In general
The Secretary shall establish standards for clinical conditions for payment for covered items under this subsection.
(ii) Requirements
The standards established under clause (i) shall include the specifieation of types or classes of covered items that require, as a condition of payment under this subsection, a face-to-face examination of the individual by a physician (as defined in section 1395x(®)(l) of this title, a physician assistant, nurse practitioner, or a clinical nurse specialist (as those terms are defined in section 1395x(aa)(5))) of this title and a prescription for the item.
(iii) Priority of establishment of standards
In establishing the standards under this subparagraph, the Secretary shall first establish standards for those covered items for which the Secretary determines there has been a proliferation of use, consistent findings of charges for covered items that are not delivered, or consistent findings of falsification of documentation to provide for payment of such covered items under this part.
(iv) Standards for power wheelchairs Effective on the date of the enactment of this subparagraph, in the case of a covered item consisting of a motorized or power wheelchair for an individual, payment may not be mаde for such covered item unless a physician (as defined in section 1395x®)(l)), a physician assistant, nurse practitioner, or a clinical nurse specialist (as those terms are defined in section 1395x(aa)(5)) has conducted a face-to-face examination of the individual and written a prescription for the item.
(v)Limitation on payment for covered items
Payment may not be made for a covered item under this subsection unless the item meets any standards established under this subparagraph for clinical condition of coverage.
42 U.S.C. A. § 1395m(a)(l)(E) (West Supp.2005).
6
In response to the enactment of the Medicare Modernization Act (“MMA”), on August 26, 2005, the CMS adopted the Interim Final Rule, which is being challenged in this action. Defs. Opp’n at 11. The rule had a 90 day comment period that expired on November 25, 2005, at 5:00 p.m.
Id.
at 11. The rule is an attempt to conform the CMS’s regulations to 42 U.S.C. § 1395m(a)(l)(E) of the MMA.
Id.
at 11-12. The rule imposes two requirements. First, “a face-to-face examination of the [beneficiary] must be conducted by a physician, a physician assistant, a nurse practitioner or a clinical nurse specialist.”
Id.
at 12. Second, “payment may not be made for a power wheelchair unless the physician or treating practitioner has written a prescription for the- item.”
Id.
Additionally, “[u]nder the new system envisioned by the PMD payment rule, physicians and treating practitioners will be compensated for the required face-to-face examination, and for the additional work necessary to complete a written prescription and prepare pertinent parts of the medical record.”
Id.
(citing PMD payment rule, 70 Fed.Reg. at 50,941).
7
According to the defendants,
II. Analysis
A. Preliminary Injunction Factors
1. Likelihood of Success on the Merits
The plaintiff claims that a preliminary injunction against enforcement of the new rule is warranted because there is a strong likelihood that its challenge to the rule will succeed on the merits. PL’s Mot. at 11. The plaintiff cites two reasons for its purported likelihood of success on the merits: (1) the Secretary unlawfully failed to follow notice and comment rulemaking procedures in promulgating the rule, id. at 12-19, and (2) the rule is arbitrary, capricious and contrary to law. Id. at 19-24. The dеfendants disagree with both positions, Defs.’ Opp’n at 27-42, and also argues that this Court does not have jurisdiction over the plaintiffs claims, id. at 20-26.
As its initial position, the defendants contend that the plaintiff has failed to meet “its burden to establish subject matter jurisdiction because jurisdiction of its underlying claim in this Court is barred by statute.” Id. at 20. Specifically, the defendants posit that § 405(h) of the Medicare Act, 42 U.S.C. § 405(h), “bars subject matter jurisdiction over all claims arising under the Medicare statute absent two requirements: presentment of a claim to the Secretary, which may not be waived, and exhaustion of administrative remedies, which is waivable by the Secretary.” Id. at 21 (citing 42 U.S.C. § 405(h), incorporated into the Medicare Act by 42 U.S.C. § 1395Ü). They further contend “that even if the Court could consider the plaintiffs underlying APA claims, [the][p]lain-tiff is not likely to prevail.” Id. at 20.
a. Jurisdiction Under the Medicare Act
“The Medicare Act establishes a comprehensive remedial scheme, providing both administrative hearing rights for aggrieved providers ... and judicial review of the Secretary’s final decisions.”
Lifestar Ambulance Serv., Inc. v. United States,
(g) Judicial review
Any individual, after any final decision of the Commissioner of Social Security made after a hearing to which he was a party, irrespective of the amount in controversy, may obtain a review of such decision by a civil action commenced within sixty days after the mailing to him of notice of such decision or within such further time as the Commissioner of Social Security may allow. Such action shall be brought in the district court of the United States for the judicial district in which the plaintiff resides, or has his principal place of business, or, if he does not reside or have his principal place of business within any such judicial district, in the United States District Court for the District of Columbia ....
42 U.S.C. § 405(g) (2000). The Medicare statute “ ‘demands the ‘channeling’ of virtually all legal attacks thrоugh the [HHS] before a health care provider may seek judicial review of a claim arising under the Medicare statute.’ ”
Lifestar,
The findings and decision of the [Secretary] after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision of the [Secretary] shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, the [Secretary], or any officer or employee thereof shall be brought under section 1881 [authorizing federal jurisdiction over federal questions] or 18k6 [authorizing federal jurisdiction over claims against the United States as defendant] of title 28 to recover on any claim arising under [the Medicare Act].
The plaintiff agrees that “when a plaintiff brings a claim relating to Medicare under the general federal-question jurisdictional statute, 28 U.S.C. § 1331, the claim must first proceed through the administrative process .... ” Plaintiffs Reply in Support of its Motion for Preliminary Injunctive Relief (“PL’s Reply”) at 3. However the plaintiff claims that this prerequisite to judicial review is not applicable if “doing so ‘would not simply channel review through the agency, but would mean no review at all.’ ”
Id.
(citing
Illinois Council,
The plaintiff relies on
McNary v. Haitian Refugee Ctr., Inc.
(e) Administrative and judicial review
(1) Administrative and judicial review There shall be no administrative or judicial review of a determination respecting an application for adjustment of status under this section except in accordance with this subsection.
(2) Administrative review
(A) Single level of administrative appellate review
The Attorney General shall establish an appellate authority to provide for a single level of administrative appellate review of such a determination.
(B) Standard for review
Such administrative appellate review shall be based solely upon the administrativе record established at the time of the determination on the application and upon such additional or newly discovered evidence as may not have been available at the time of the determination.
(3) Judicial review
(A) Limitation to review of exclusion or deportation
There shall be judicial review of such a denial only in the judicial review of an order of exclusion or deportation under section 1105a of this title.
(B) Standard for judicial review
Such judicial review shall be based solely upon the administrative record established at the time of the review by the appellate authority and the findings of fact and determinations contained in such record shall be conclusive unless the applicant can establish abuse of discretion or that the findings are directly contrary to clear and convincing facts contained in the record considered as a whole.
Haitian Refugee Ctr.,
First, the Court noted that judicial review of an agency decision is confined to the administrative record, which is made in the initial proceeding at the decision making level. Id. And, one of the plaintiffs central attacks on INS procedures was that it did “not allow applicants to assemble adequate records.” Id. Therefore, the Court agreed with the District Court’s finding that
because of the lack of recordings or transcripts of [legalization office] interviews and the inadequate opportunity for SAW applicants to call witnesses or present other evidence on their behalf, the administrative appeals unit of the INS, in reviewing decisions of legalization offices and regional processing facilities, and the courts of appeals, in reviewing SAW denials in the context of deportation prоceedings, have no complete or meaningful basis upon which to review application determinations.
Id.
Second, “because there [was] no provision for direct judicial review of the denial of SAW status ..., most aliens denied SAW status can ensure themselves review in courts of appeals only if they voluntarily surrender themselves for deportation.”
Id.
And, as the Supreme Court noted, “that price is tantamount to a complete denial of judicial review for most undocumented aliens.”
Id.
at 497,
In contrast to the narrow statutory provision at issue in
Haitian Refugee Center,
the Supreme Court has characterized the Medicare Act’s § 405(h) bar to § 1331 ju-
Similarly, in the earlier case of
Wein-berger v. Salfi,
the Supreme Court construed the “claim arising under” language of the Social Security Act “quite broadly to include any claims in which both the standing and the substantive basis for the presentation of the claims [was] the Social Security Act.”
From a reading of these cases, in addition to the clear language of § 405(h), this Court concludes that it cannot entertain § 1331 jurisdiction in this case unless and until the plaintiff exhausts its administrative remedies. As discussed above, “[s]ection 405(h) purports to make exclusive the judicial review method set forth in § 405(g).”
Illinois Council,
2. Irreparable Harm
The plaintiff claims that “members of the Coalition would suffer irreparable injury if the injunction is not granted.” Pl.’s Mot. at 11. Specifically the plaintiff alleges that “[t]he Rule will inflict irrecoverable, severe, and immediate economic loss upon Coalition members who depend upon timely and reliable Medicare reimbursement in their businesses.” Id. at 25. The plaintiff claims that the documentatiоn requirements of the new Rule (1) abolishes the CMN and (2) fails to provide meaningful criteria by which suppliers can reliably predict whether the CMS and its contractors have documentation that adequately supports prescriptions for PMDs. Id. at 27. In other words, according to the plaintiff, suppliers will be unable to make any educated prediction about whether they will be reimbursed for the cost of providing a PMD pursuant to a doctor’s prescription. Id. Moreover, the plaintiff contends that the increased record-gathering and maintenance costs associated with the new rule, and related delays in obtaining reimbursement, and the uncertainty about whether claims will be paid is likely to put Coalition members out of business. Id. at 28 (citation omitted). The plaintiff also opines that the losses that will be sustained by these suppliers will be irreparable because lost sales on mobility devices and denied claims for reimbursement cannot be recouped from patients. Id. (citation omitted).
On the other hand, according to the defendants, the plaintiffs motion should be denied because it has not shown imminent, certain and irreparable injury. Defs.’ Opp’n at 14-15. Moreover, putting aside the plaintiffs evidentiary deficiencies, the defendants argue that the plaintiffs “central claim is not credible [because its members] will not be imminently and certainly forced out of business if they abide by the PMD payment rule and its documentation
“[Irreparable harm to the moving party is ‘the basis of injunctive relief in the federal courts.’ ”
Almurbati v. Bush,
Here, the plaintiff has not demonstrated that irreparable injury is
“certain, great and actual
— not theoretical — and
imminent,
creating a clear and present need for extraordinary equitable relief to prevent harm.”
Wisconsin Gas Co.,
As explained at oral argument, and in the brief submitted by counsel for the defendants, the additional burdens imposed by the new rule are primarily placed on the physicians and other practitioners who are required to conduct face-to-face examinations of potential beneficiaries, provide a written prescription for PMDs, and produce documentation from potential beneficiaries’ medical records showing medical necessity for the use of PMDs. Defs.’ Opp’n at 12. The only “additional burden” placed upon the providers of PMDs is the requirement that they have supporting documentation prior to submitting a claim to the CMS. Id. The plaintiffs complaint, at bottom, is therefore to its obligations to “maintain the prescription and the supporting documentation” and to make those documents available “to [the] CMS and its agents upon request.” Pl.’s Mot. at 10. These requirements can hardly be considered significant or unreasonable. Although the plaintiff will have to find space to store this documentation, it would appear that maintaining this information may actually help facilitate claims reimbursement, rather than generate denials, when questions about the necessity for DMEs are raised. .It is therefore the Court’s conclusion that based on the entire record before the Court at this time, the plaintiffs claim of irreparable harm is far too speculative to .merit injunctive relief. Accordingly, the plaintiff has not satisfied its burden of establishing irreparable harm. 12
III. Conclusion
Based upon the foregoing analysis, the Plaintiffs Motion for Preliminary Injunc-tive Relief must be denied because (1) the plaintiff is not likely to succeed on the merits because this Court is barred by statute from having subject matter jurisdiction in this case and, (2) the plaintiff has not met its burden of establishing irreparable harm.
Notes
. This memorandum opinion is being issued to supplement the oral ruling made at that October 25, 2005 hearing on the Plaintiffs Motion for Preliminary Injunctive Relief.
. Part A authorizes payment for covered inpatient hospital care and related services, 42 U.S.C. §§ 1395c to 1395i-5; 42 C.F.R. Part 409, and Part C authorizes beneficiaries to obtain services through HMOs and other "managed care” arrangements, 42 U.S.C. §§ 1395w-21 to 1395w-28, 42 C.F.R. Part 422.1. Defs.’Opp’n at 2.
. Carriers have other responsibilities such as issuing bulletins to medical providers and suppliers, detailing coverage requirements, explaining limitations of coverage definitions, and medical necessity definitions, along with other pertinent matters. Defs.’ Opp'n at 4 (citation omitted).
. "The CMN itself is a limited, standard document, that requests (1) identifying information about the supplier and the beneficiary, (2) a description of the DME supplied, and (3) other administrative information 'other than information relating to the beneficiary’s medical condition, which could be provided by the supplier, and limited medical information required to be completed by a physician.’ ’’ Defs.’ Opp’n at 8. The CMN is considered limited because oftentimes more than the CMN is needed in order for Medicare to pay the claim. For example, "[a] valid certification by a physician may be a CMN, where permitted, or a prescription or a physician order for an item of DME.” Id. And "PMDs are a distinct, and expensive form of DME. [Thus,] [o]nly a small subset of Medicare beneficiaries who are eligible for payment for a wheelchair of some sort are eligible for reimbursement of a power operated wheelchair.” Id. at 9.
. "The Act followed, and responded to, a proliferation of fraud and abuse in the PMD market. Indeed, 'DMERCs and the [HHS] Office of the Inspector General have identified fraud cases involving power wheelchairs that were not supplied, not medically necessary, or both.' ” Id. at 10 (citation omitted).
. It is this Court’s practice to cite solely the United States Code. However, the Medicare Modernization Act of 2003 is not yet codified in the United States Code or any supplement thereto, but rather is only codified in the annotated version of the United States Code. Accordingly, with respect to the MMA, this Court will have to cite the annotated version of the United States Code throughout this opinion.
. "By permitting treating practitioners to conduct the face-to-face examination, [the MMA] effectively removed [the] CMS' [previous] regulatory requirement that a beneficiary must be seen by a specialist in physical medicine, orthopedic surgery, neurology, or rheu-
. "A Medicare supplier dissatisfied with the resolution of a claim must present its grievance through the designated administrative appeals process and exhaust the administrative remedies available to it.” Def.'s Opp’n at 5 (citing 42 U.S.C. § 1395u(b)(3)(C); 42 U.S.C. § 1395ff(b)) (incorporating by reference 42 U.S.C. § 405(b)); see. also 42 C.F.R. §§ 405.801 et seq., 405.901 et seq (describing the administrative appeals process for Part B). “The Medicare Act’s review scheme is established through four statutory provisions: 42 U.S.C. § 405(b), 42 U.S.C. § 405(g), 42 U.S.C. § 405(h), and 42 U.S.C. § 1395cc(h).” Id. at 6. "Section 405(b) provides that any individual dissatisfied with a dеtermination of the Secretary is entitled to 'notice and opportunity for a hearing with respect to' the determination.” Id. (quoting 42 U.S.C. § 405(b)). "Once this administrative process is exhausted, judicial review of the Secretary’s 'final decision’ is available as provided in 42 U.S.C. § 405(g) (incorporated by reference in 42 U.S.C. § 1395ff(b)(1)(a)), which provides that anyone dissatisfied with a ‘final decision ... made after a hearing to which he was a party may obtain ... review of such decision by’ filing an action in federal district court.” Id. (citing 42 U.S.C. § 405(g)). "Section 405(h) renders the administrative and judicial review procedures under Section 405(b) and (g) exclusive.” Id.
. The plaintiff also asserts that this Court has jurisdiction pursuant to the general mandamus statute, 28 U.S.C. § 1361, the Declaratory Judgment Act, 28 U.S.C. § 2201-2202, and
. ■ With respect to the plaintiff's position that "[t]he process of appealing a carrier’s disal-lowance of a PMD claim commonly takes two to three years,” Pl.'s Reply at 4, counsel for the defendant represented, at oral argument, that the delay would not be as long as the plaintiff has indicated. Counsel also noted that the Secretary has the option of waiving the exhaustion of administrative remedies in order to expedite judicial review, if necessary.
. Mr. Sidak is a visiting Professor of Law at the Georgetown University Law Center and the founder of Criterion Economics, an economic consulting firm. Hal J. Singer is the President of Criterion Economics.
. Because “a plaintiff's failure to meet its burden of establishing irreparable harm is sufficient, in itself, to deny emergency relief,”
CityFed Fin. Corp.,
