Starnes v. SchweikerStarnes v. Schweiker
We granted leave to take this interlocutory appeal to settle the question of whether the district court had jurisdiction to decide procedural, substantive and constitutional challenges to benefit levels set by the Secretary of Health and Human Services to guide private insurance carrier benefit determinations under Part B of the Medicare statute. The district court ruled that it had jurisdiction. It exercised its jurisdiction, however, only to grant a preliminary injunction based upon a prima facie showing of a procedural deficiency in the manner in which the Secretary proceeded, reserving judgment on the substantive and constitutional challenges.
We conclude that the district court has jurisdiction either under
I.
Part B of the Medicare Program is a voluntary medical insurance program for the aged and disabled, funded by monthly premiums and contributions from general revenues of the federal government. Part B supplements the general coverage of Part A by insuring against some medical expenses not covered by the latter. Determinations of benefits paid for Part B coverage are made by private insurance carriers employed by the Secretary in accordance with regulations and policy guidelines issued by the Secretary. Persons to whom Part B is applicable are entitled to reimbursement of 80 percent of the “reasonable charge” for covered medical services, including physicians’ services.
Plaintiffs are (a) Medicare beneficiaries enrolled in Part B of the Medicare Program, and (b) physicians and clinics which provide computerized tomography (“CT“) scans to the class of Medicare patients which the Medicare beneficiary plaintiffs represent. Plaintiffs brought this class action to challenge the establishment and implementation by the Secretary of nationwide and regional ceilings or caps on Part B reimbursements for CT head scans. Through several letters or memoranda the Secretary has established a national ceiling on reimbursement for such services. In June 1977, the Regional IV Office (Atlanta) sent letters to all Part B carriers in Region IV proposing that no more than $150 be paid for CT head scans. In December 1977 a memorandum was issued to all Regional Medicare Directors indicating that $150 was a reasonable charge for CT scans. In September 1978 the nationwide caps were adjusted by a letter issued to all insurance carriers which indicated that a reasonable charge for CT scans should range from $157.50 to $172.50, with the amount allowed in a particular case to depend upon whether contrast enhancement was used in the scan.
The named plaintiffs unsuccessfully exhausted their administrative remedies before bringing this action to challenge the directives. They appealed benefit determinations to carrier-appointed hearing officers, the only administrative remedy provided under the Act,
Plaintiffs challenge the cap on a number of grounds. They contend that the Secretary‘s informal letters, directives and memoranda establishing the caps constitute rulemaking without notice and opportunity for comment, in violation of the Administrative Procedure Act.
On March 6, 1980, the district court ruled that it had jurisdiction over all of plaintiffs’ claims, concluded the caps were promulgated in violation of the APA‘s rulemaking requirements, and preliminarily enjoined their implementation nationwide until regulations authorizing such caps were properly promulgated. The district court reaffirmed its jurisdictional holding on April 16, 1982, reserving ruling on plaintiffs’ other contentions, and certified the question for appeal to this court. We granted leave to maintain it.
II.
Plaintiffs allege jurisdiction in the district court by virtue of
A. 42 U.S.C. § 1395ff
As we have previously described,
In two recent cases, the Supreme Court has addressed this scheme. In United States v. Erika, 456 U.S. 201, 102 S.Ct. 1650, 72 L.Ed.2d 12 (1982), it held that
We find nothing in the language of
Erika held that particular carrier benefit determinations are unappealable. The Court phrased the question presented there as whether there is “jurisdiction to review determinations by private insurance carriers of the amount of benefits payable under Part B of the Medicare statute.” 456 U.S. at 205-208, 102 S.Ct. at 1653-1654, 72 L.Ed.2d at 17-18. And it agreed with the position that the United States had taken in the case that “Congress, by enacting the Medicare statute ... specifically precluded review in the Court of Claims of adverse hearing officer determinations of the amount of Part B payments.” 456 U.S. at 206-207, 102 S.Ct. at 1653-1654, 72 L.Ed.2d at 17-18. Moreover, McClure suggests that some degree of judicial oversight of the Part B program is preserved, despite
Erika does, however, compel the conclusion that a plaintiff cannot seek to reopen a benefit determination by challenging a regulation or some other action by the Secretary which influenced it. The suit in Erika was brought by a distributor of kidney dialysis supplies to challenge the implementation by an insurance carrier of a regulation defining the reasonable charge for a service on the basis of its price in the year prior to the year in which the service was rendered. The Court of Claims concluded that the regulation was invalid, and directed the carrier to recalculate benefits owed to the plaintiff by some more accurate method. Erika, Inc. v. United States, 634 F.2d 580, 589 (Ct.Cl.1980). In finding the Court of Claims to be without jurisdiction, then, the Supreme Court implicitly held that a carrier benefit determination could not be reopened even though it was alleged to be unlawful because of some action by the Secretary.
McClure, however, strongly suggests that a benefit determination may be reviewed and reopened when the alleged infirmity is constitutional in nature. In that case the Supreme Court both assumed that it possessed jurisdiction over a due process challenge to the procedures followed in prior determinations and left open the door to future constitutional challenges to benefit determinations when it could be proven that the carrier-appointed hearing officer was biased. 456 U.S. at 195-198, 102 S.Ct. at 1670-1671, 72 L.Ed.2d at 8-9. The issue was not addressed in Erika, for while a constitutional claim had been made below it was held to be insubstantial and was not pressed before the Supreme Court. 456 U.S. at 206 n. 5, 102 S.Ct. at 1653 n. 5, 72 L.Ed.2d at 17 n. 5.
Prior to Erika there was universal agreement that actions by the Secretary and even private carriers could be assailed on constitutional grounds in either a district court, Kechijian v. Califano, 621 F.2d 1 (1 Cir.1980); Pushkin v. Califano, 600 F.2d 486 (5 Cir.1979); Cervoni v. Secretary of Health, Ed. & Welfare, 581 F.2d 1010 (1 Cir.1978); St. Louis Univ. v. Blue Cross Hosp. Serv., 537 F.2d 283 (8 Cir.) cert. den. sub nom. Faith Hospital Assoc. v. Blue Cross Hosp. Serv., Inc., 429 U.S. 977, 97 S.Ct. 484, 50 L.Ed.2d 584 (1976), or the Court of Claims, Bussey v. Harris, 611 F.2d 1001 (5 Cir.1980); Drennan v. Harris, 606 F.2d 846 (9 Cir.1979). We see no reason to depart from this position for there is no indication in the Act‘s legislative history that Congress intended a result so drastic as, by the enactment of
In sum, we hold
B. 42 U.S.C. § 1395ii
Federal question jurisdiction would undoubtedly exist but for the possible bar of
The findings and decisions 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 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.
The precise meaning and scope of
Since Salfi the Supreme Court has had occasion to discuss
Plaintiffs argue that these precedents do not foreclose their contention that
The Home Health Agencies case is one of the most persuasive in this line of authorities. It is also one of the latest and it collects all of the pertinent authorities extant at the time it was decided. There, numerous home health agencies and a trade association attacked the validity of regulations requiring home health agencies to seek medicare reimbursement determinations and payment from government-designated regional intermediaries. Because there was no statutory right of judicial review, they sought to invoke federal question jurisdiction to adjudicate their claims that the Secretary had illegally violated the Medicare Act, the APA and denied them due process in promulgating the regulation. As to the jurisdictional issue, the court of appeals held that, in the absence of a statutory right of judicial review, the district court had federal question jurisdiction to decide the issues on their merits, and, moreover, the lack of a statutory right of judicial review, did not evidence congressional intent to deny federal question jurisdiction. It stressed that there was no legislative history to indicate that, by the enactment of
As we view plaintiffs’ complaint, the gravamen of their action with respect to the alleged violation of APA, the alleged violation of the Medicare Act and the alleged violation of their constitutional rights,4 is to redress those violations. Of course a well-founded complaint in that regard has a secondary effect on the benefits and payments due them. It may well be true that the effect of the preliminary injunction suspending enforcement of the caps granted by the district court entitles plaintiffs to be paid more than they would receive were the caps being enforced. But we do not perceive the suit essentially one to recover benefits; it is a suit to enforce lawful conduct on the part of the Secretary. Cf. Ringer v. Schweiker, 684 F.2d 643, 646 (9 Cir.1982). We hold therefore that federal question jurisdiction existed in the district court.
III.
We recognize that, in deciding that federal question jurisdiction exists to litigate plaintiffs’ procedural challenge, we decide a close case. It may well be that a higher reviewing court may be of the opinion that we have misconstrued
The federal mandamus statute, added by the Mandamus and Venue Act of 1962, provides an independent grant of jurisdiction to compel an officer or employee of the United States to perform a duty owed to the plaintiff. See
We think that these holdings are applicable here. We held in Burnett v. Tolson, 474 F.2d 877 (4 Cir.1973), that mandamus will lie when there is (a) a clear right on the part of the plaintiffs to the relief sought, (b) a clear duty on the part of the defendant to do the act in question, and (c) no other adequate remedy available. These conditions may all be met here, the third being met if we are incorrect in our conclusion that jurisdiction under
Even if jurisdiction rests solely on
AFFIRMED.
Notes
(a) The determination of whether an individual is entitled to benefits under part A or part B of this subchapter, and the determination of the amount of benefits under part A of this subchapter, shall be made by the Secretary in accordance with regulations prescribed by him.
(b)(1) Any individual dissatisfied with any determination under subsection (a) of this section as to--
(A) whether he meets the conditions of section 426 or 426a of this title, or
(B) whether he is eligible to enroll and has enrolled pursuant to the provisions of part B of this subchapter, or section 1395i-2 of this title or section 1819, or
(C) the amount of benefits under part A of this subchapter (including a determination where such amount is determined to be zero)
shall be entitled to a hearing thereon by the Secretary to the same extent as is provided in section 405(b) of this title and to judicial review of the Secretary‘s final decision after such hearing as is provided in section 405(g) of this title.
(2) Notwithstanding the provisions of subparagraph (C) of paragraph (1) of this subsection, a hearing shall not be available to an individual by reason of such subparagraph (C) if the amount in controversy is less than $100; nor shall judicial review be available to an individual by reason of such subparagraph (C) if the amount in controversy is less than $1,000.
(c) Any institution or agency dissatisfied with any determination by the Secretary that it is not a provider of services, or with any determination described in section 1395cc(b)(2) of this title, shall be entitled to a hearing thereon by the Secretary (after reasonable notice and opportunity for hearing) to the same extent as is provided in section 405(b) of this title, and to judicial review of the Secretary‘s final decision after such hearing as is provided in section 405(g) of this title.