ORDER
On Mаy 21, 2012, the Court provided the parties notice that it intended to convert defendants’ Motion to Dismiss Amended Complaint in Part into a Motion for Summary Judgment. [Doc. 63]. A copy of the Proposed Order was attached to this notice. [Doc. 63-1]. Plaintiffs were given fourteen (14) days to show cause why summary judgment was not warranted and to provide evidence creating a genuine issue of material fact. Plaintiffs timely responded by filing a brief and requesting oral argument,
After carefully reviewing plaintiffs’ brief in response, the Court finds that it is essentially a reiteration of arguments previously made on brief. Having already considered and addressed such arguments in the Proposed Order of May 21, 2012, the Court sees no reason to retreat from the Proposed Order. Consequently, the Court hereby ADOPTS its Proposed Order of May 21, 2012. [Doc. 63-1]. Accordingly, defendants’ Motion to Dismiss Amended Complaint in Part [Doc. 23], as converted by the Court into a Mоtion for Summary Judgement, is hereby GRANTED, and the Amended Complaint is hereby DISMISSED.
ORDER
Plaintiffs Southern Rehabilitation Group (“SRG”) and James P. Little, M.D., bring this action against defendants Kathleen Sebelius (“the Secretary”), Cigna Government Services, LLC (“Cigna”), Computer Sciences Corporation, and Q2 Administrators, LLC, alleging fraud and other wrongful misconduct in the processing of their claims to reimbursements under Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq. (“Medicare Act” or “Act”). Pursuant to Rule 12(b)(1) and 12(b)(6) of the Federal Rules of Civil Procedure, defendants move the Court for an Order dismissing the Amended Complaint, in part, for lack of subject matter jurisdiction and/or for failure to state a claim upon which relief can be granted [Doc. 23].
I. FACTUAL AND PROCEDURAL HISTORY
Since June 2001, plaintiffs have provided inpatient rehabilitation healthcare services at Healthsouth Rehabilitation Hospital in Kingsport, Tennessee. Approximately 70% of plaintiffs’ patients are covered by Medicare, and plaintiffs generate approximately 10,000 Medicare claims per year. Plaintiffs billed the services at issuе to Part B Medicare contractor/fiscal intermediary Cigna. In their Amended Complaint, plaintiffs take issue with the way Cigna and the other defendants handled certain groups of claims, claiming that such claims were fraudulently and/or im
Plaintiffs assert a number of Counts in their Amended Complaint. Count I alleges that the Secretary’s factual findings were not based on substantial evidence and must be overturned; Count II alleges statutory violations; Count III alleges defendants violated the constitutional rights of plaintiffs; and Counts IV-IX allege negligence and various other state law causes of action. In addition to seeking reimbursement for services rendered, Plaintiffs seek interest on the unreimbursed claims, as well as injunctive relief and consequential damages in the amount of $1,963,990.00.
On October 13, 2011, the Secretary filed a Motion for Partial Remand [Doc. 46] on Counts I and II pursuant to sentence six of § 405(g) of the Social Security Act, 42 U.S.C. § 405(g), which provides, “The court may, on motion of thе Commissioner for good cause shown ... remand the case to the Commissioner for further action by the Commissioner.... ” The plaintiffs argued that the Court should deny such motion on the grounds that it was nothing more than a ploy to pay them as little as possible so as to get the case dismissed [See Doc. 49]. By Order dated October 18, 2011 [Doc. 47], the Court granted the Secretary’s Motion for Partial Remand. On March 6, 2012, the Secretary notified the Court that, on remand, the defendants agreed to pay the plaintiffs the full amount in dispute for thоse claims in Group 2, Group 3, and Group 4. This amount, totaling $107,171.07, was paid to Plaintiffs on February 24, 2012 [See Doc. 62], In light of the foregoing, it is now defendants’ position that the plaintiffs have received everything they could possibly be entitled to under the Medicare Act [Doc. 61 at 2], The plaintiffs disagree, arguing that they are entitled to further relief [Doc. 49 at 3]. In light of the Secretary’s recent notice filing, and in the interest of judicial economy, the Court sua sponte converts the instant Motion to Dismiss in Part into a motion for summary judgment.
II. SUMMARY JUDGMENT STANDARD
Summary judgment is proper whеre “the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue of material fact and that the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c). In ruling on a motion for summary judgment, the Court must view the facts contained in the record and
The moving pаrty bears the initial burden of demonstrating that no genuine issue of material fact exists. Celotex Corp. v. Catrett, 477 U.S. 317, 323,
The party opposing a Rule 56 motion may not simply rest on the mere allegations or denials contained in the party’s pleadings. Anderson, 477 U.S. at 256,
III. ANALYSIS
a. The Court Lacks Subject Matter Jurisdiction Over Plaintiffs’ State Law Claims (Counts IV-IX).
The specific jurisdictional basis for judicial review of a final decision of the Secretary on a Medicare Part B claim is articulated аt 42 U.S.C. § 1395ff(b)(l)(A). This provision states that “any individual dissatisfied ... shall be entitled to ... judicial review of the Secretary’s final decision after [a] hearing as is provided in section 405(g) of this title.” The referenced “section 405(g)” is the fundamental judicial review provision of the Social Security Act. The text of section 405(g) states, in pertinent part:
Any individual, after any final decision of the [Secretary] made after a hearing to which he was a party ... may obtain a review of such decision by a civil action commenced within sixty days аfter the mailing to him of notice of such decision
Under 42 U.S.C. § 405(h),
Plaintiffs concede that all of their claims are “inextricably intertwined with' their claims for payment” [Doc. 56 at 16], See also Doc. 56 at 19 (“Becausе all of Plaintiffs’ contentions are inextricably intertwined with their action, the District Court has adequate authority to decide [them]”). Notwithstanding this concession, plaintiffs argue that their various state law claims and constitutional claims are properly before the Court on the ground that they have properly exhausted their administrative remedies. Because they have exhausted their administrative remedies, plaintiffs argue, the law permits them to litigate all of their claims before the Court.
Plaintiffs are mistaken. Instructive is the case of Bodimetric Health Services, Inc. v. Aetna Life & Casualty,
Also instructive is the case of Regional Medical Transport, Inc. v. Highmark, Inc.,
To the extent that plaintiffs have obtained the relief sought in those proceedings, plaintiffs are limited to that recovery and cannot obtain more than permitted by the Medicare program by couching their claims as state law challenges. To the extent that plaintiffs are aggrieved by the results of the adminis*739 trative review process, the proper—and only—recourse available is an appeal of the Secretary’s “final decision” in accordance with § 405(g) and the Medicare regulations. 27ms, irrespective of what relief plaintiffs actually obtained in the administrative process, § 105(h) bars judicial review of plaintiffs’ state law tort claims, all of which are “inextricably intertwined” with claims for Medicare benefits.
Id. at 729 (emphasis added).
For the foregoing reasons, the Court concludes that it lacks subject matter jurisdiction over plaintiffs’ state law claims (Counts IV-IX).
b. The Court Lacks Subject Matter Jurisdiction Over Plaintiffs’ Constitutional Claims (Count III).
Plaintiffs contend in their Amended Complaint thаt defendants violated their right to due process and equal protection by, inter alia, undervaluing their services and arbitrarily and capriciously applying the Medicare Act and pertinent regulations. [Doc. 7 at 37-39]. However, as noted, supra, plaintiffs’ concede that all of their claims are “inextricably intertwined with their claims for payment.” [Doc. 56 at 16]. Consequently, the Court lacks subject matter jurisdiction over plaintiffs’ constitutional claims. See Heckler v. Ringer,
Notwithstanding the foregoing, plaintiffs argue that the Court has subject matter jurisdiction to consider their constitutional claims because plaintiffs have successfully channeled some of their claims through the administrative process. Plaintiffs are again mistaken. Instructive on this point is the case of Schweiker v. Chilicky,
c. The Court Lacks Subject Matter Jurisdiction Over Plaintiffs’ Request for Injunctive Relief.
Plaintiffs seek injunctive relief in the following respects: (1) that the Secretary revise the Medicare coding guidelines, and (2) that the Secretary train reviewers in the proper method of applying Medicare’s payment guidelines and documentation requirements as they apply to rehabilitative services. [Doc. 7 at 52-53]. Such relief is unavailable in this litigatiоn.
d. The Court Lacks Subject Matter Jurisdiction Over Plaintiffs’ Claims Relating to Group 1.
Plaintiffs concede that, with regard to their Group 1 claims, they did not pursue such claims to the point of receiving a “final dеcision” by the Secretary, in accordance with § 405(g) and the Medicare Regulations. [Doc. 56 at 15-16]. Plaintiffs allege that they timely requested review from Cigna for the Group 1 claims, but that Cigna never issued them a determination. Consequently, plaintiffs argue that they were unable to appeal these claims to the next level in the administrative process. Plaintiffs also allege that channeling the Group 1 claims through the administrative process would be overly time consuming and, consequently, that the Court should “waivе” the requirement imposed by 42 U.S.C. § 405(g) that requires plaintiffs to receive a final decision from the Secretary prior to seeking judicial review. [Doc. 56 at 13,15].
Turning first to plaintiffs’ contention that Cigna’s inaction prevented them from completing the administrative appeals process: while the Court can appreciate the frustration that plaintiffs must have felt when they submitted the required Group 1 billing paperwork to Cigna and never heard back, this does not excuse them from the requirement that they exhaust thеir administrative remedies. Pursuant to the federal regulations that governed Medicare Part B appeals in 2002, an entity dissatisfied with an initial determination in which a carrier denied a Medicare claim had a right to “request that the carrier review such determination.” 42 C.F.R. § 405.807(a) (2002). If the carrier failed to issue a review determination with reasonable promptness, i.e., within sixty (60) days, id. § 405.802, the recourse for the party seeking review was to request a hearing before a carrier hearing officer. Id. §§ 405.801, 405.821(c). In other words, the рlaintiffs’ recourse in the situation they describe was simply to proceed to invoke the next step of the Medicare administrative appeals process. Evidently plaintiffs did not do this, and such failure does not excuse them from the requirement that
The Court also finds equally unavailing plaintiffs’ request that the Court waive the requirement for a final decision with respect to the Group 1 claims. While waiver of the Medicare Act’s administrative exhaustion requirement is permitted in limited circumstances, see, e.g., Bowen v. City of New York,
The reasons for channeling cases such as the one at bar through the administrative process first are simple. As the Supreme Court has stated,
Exhaustion is generally required as a matter of preventing premature interference with agency processes, so that the agency may function efficiently and so that it may have the opportunity to correct its own errors, to afford the parties and the courts the benefit of its experience and expertise, and to compile a record which is adequate for judicial review.
Weinberger v. Salfi,
e. Plaintiffs’ Challenge to the Secretary’s Final Determination (Groups 2-4) is Moot.
In accordance with § 405(g) and § 405(h), a prerequisite to the Court exercising jurisdiction is that the Medicare system has made a determination adverse to the claimant. Weinberger v. Salfi,
f. Plaintiffs’ Are Not Entitled to Interest.
Plaintiffs claim that, at the minimum, they are entitled to interest on the $107,171.07. Such is not the case.
No interest is payable by the Federal Government except where Congress has expressly authorized it. Library of Congress v. Shaw,
Plaintiffs apparently rely upon the “clean claims” provision of the Medicare statute, at 42 U.S.C. § 1395u(c)(2)(C). [See Doc. 49 at 2]. The “clean claims” provision is concerned with the promptness of Medicare claims processing, and provides for payment of interest when “сlean claims” are not processed on a timely basis. Id.-, see 42 C.F.R. § 405.922 (interest on clean claims payable when initial claim determination is not made promptly). The “clean claims” provision does not apply to a situation in which a Medicare claim, initially denied by the Medicare program, subsequently gets approved for payment at some level of the Medicare claims appeals process. The Medicare Claims Manual makes this point explicitly:
Interest payments are not payable on clean claims initially processed to denial and on which payment is made subsequent to the initial decision as a result of an appeal request. This applies to appeals where more than the applicable number of days elapsed before an initial determination, but the claim was later paid upon appeal.
Medicare Claims Processing Manual, CMS Publication No. 100-04, Ch. 1 (“General Billing Requirements”), § 80.2.2.1.C—(“In-terest Payment on Clean ... Claims Not Paid Timely [:] Detеrmining and Paying Interest [:] Claims Paid Upon Appeal”).
Furthermore, where Congress has intended to authorize the payment of interest in the event of a favorable outcome obtained in a Medicare appeal, Congress has done so. Congress has authorized the payment of interest in a few, very limited circumstances in which payment is obtained through a successful Medicare reimbursement appeal. See, e.g., 42 U.S.C. § 1395oo(f)(l) (providing for interest on claims that are denied by the Provider Reimbursement Review Board, but allowed in a subsequent judicial challenge); 42 U.S.C. § 1395ff(b)(2)(A) (providing for interest when Medicare Appeals Council grants appellant “expedited access to judicial review” because the Medicare Appeals Council “does not have the authority to decide the question of law or regulation relevant to the matter in controversy and ... there is no material issue of fact in dispute”).
The above-referenced limited circumstances do not apply to the instant case. Tо the contrary, the instant matter proceeded as a customary Medicare claims appeal, in which the Medicare Appeals Council evaluated abundant factual evidence in order to determine whether plaintiffs’ Medicare claims satisfied the criteria for payment at the level plaintiffs contended they were due and then rendered a substantive final agency decision on the merits of the case. In such a case, Congress has not authorized the payment of interest. See, e.g., Lifeline Ambulance Serv., Inc. v. Leavitt,
In light of the foregoing, it is clear that plaintiffs are not entitled to interest on the $107,171.07 paid by the Secretary on remand.
IV. CONCLUSION
For the foregoing reasons, it is clear that plaintiffs cannot prevail against the defendants on Counts III-IX. To the extent that plaintiffs have made a viable claim for payment pursuant to Counts III, defendants have effectuated such pay
Notes
. Plaintiffs' request for oral argument is hereby DENIED.
. Downcoding refers to a practice of third-party payers in which thе billing/benefits code has been changed to a less complex or lower cost procedure than was reported.
. 42 U.S.C. § 405(h) provides, "[n]o action against the United States, the Commissioner of Social Security, or any officer or employee thereof shall be brought under section 1331
. It is worth noting that the plaintiffs in Regional Medical Transport, Inc., just as in the instant case, had litigated at least a portion of their claims to the point where the Secretary had rendered a final decision regarding them. Id. at 722.