American Academy of Dermatology v. Department of Health & Human Services

• Decision Date: 07 August 1997
• Docket Number: No. 97-2229,97-2229
• Court: U.S. Court of Appeals — Eleventh Circuit
• Parties: , Medicare & Medicaid Guide P 45,549, 11 Fla. L. Weekly Fed. C 286 AMERICAN ACADEMY of DERMATOLOGY; Florida Society of Dermatology; Seniors Coalition, Inc., Plaintiffs-Appellants, v. DEPARTMENT of HEALTH & HUMAN SERVICES, through Donna Shalala, Secretary of the United States Department of Health and Human Services; Health Care Financing Administration; Bruce Vladeck, Administrator of Health Care Financing Administration; Blue Cross/Blue Shield of Florida, Inc., Defendants-Appellees.

Page 1495

118 F.3d 1495

53 Soc.Sec.Rep.Ser. 786, Medicare & Medicaid Guide

P 45,549,

11 Fla. L. Weekly Fed. C 286

AMERICAN ACADEMY of DERMATOLOGY; Florida Society of

Dermatology; Seniors Coalition, Inc., Plaintiffs-Appellants, v. DEPARTMENT of HEALTH & HUMAN SERVICES, through Donna

Shalala, Secretary of the United States Department of Health

and Human Services; Health Care Financing Administration;

Bruce Vladeck, Administrator of Health Care Financing

Administration; Blue Cross/Blue Shield of Florida, Inc.,

Defendants-Appellees.

No. 97-2229.

United States Court of Appeals, Eleventh Circuit.

Aug. 7, 1997.

Dana G. Bradford, II, Rebecca B. Creed, Jacksonville, FL, Esther R. Scherb, Maureen E. Mahoney, Richard P. Bress, Lathan and Watkins, P. Robert Rigney, Jr., American Academy of Dermatology, Stuart S. Kurlander, Washington, DC, for Plaintiffs-Appellants.

Ralph Lee, Assistant U.S. Attorney, Jacksonville, FL, Tamra Phipps, Assistant U.S. Attorney, Tampa, FL, for Defendants-Appellees.

Appeal from the United States District Court for the Middle District of Florida.

Before BARKETT, Circuit Judge, HILL, Senior Circuit Judge, and HOWARD ^*, Senior District Judge.

BARKETT, Circuit Judge:

Appellants, the American Academy of Dermatology, et al., appeal from the district court's order dismissing the instant action for lack of subject matter jurisdiction. Appellants filed suit against the United States Department of Health and Human Services ¹ alleging violations of Part B of the Medicare Act, 42 U.S.C. §§ 1395j-1395w-4. On appeal, appellants argue that the district court erred in holding that it lacked subject matter jurisdiction over this action due to appellants' failure to present their claims to the United States Secretary of Health and Human Services and exhaust administrative remedies. We AFFIRM.

I. BACKGROUND

Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq., commonly known as the Medicare Act, established programs that provide medical benefits to the elderly and disabled. These programs are administered by the United States Secretary of Health and Human Services ("the Secretary"). The Medicare Act is divided into three parts. Part A provides insurance primarily for the costs of hospital and related post-hospital care and is funded by social security taxes. 42 U.S.C. §§ 1395c-1395i-4. Part B is a voluntary program that provides supplemental insurance to cover other health care costs, including physicians' services. 42 U.S.C. §§ 1395j-1395w-4. It is funded by monthly premiums paid by beneficiaries and contributions made by the government to the Federal Supplementary Medical Insurance Trust Fund. 42 U.S.C. § 1395t. Part C contains miscellaneous provisions and definitions. 42 U.S.C. §§ 1395x-1395ccc. This case concerns the coverage of physicians' services under Part B.

The Secretary is authorized by statute to contract with private insurance carriers to make determinations concerning the rates and amounts for payment of Part B claims. See 42 U.S.C. § 1395u. The Secretary has delegated to Blue Cross & Blue Shield of Florida, a private insurance carrier ("the Carrier"), the authority to approve and pay medically necessary and proper claims for benefits covered by Part B of the Medicare program in the State of Florida. On November 18, 1996, the Carrier issued a Local Medical Review Policy ("LMRP") setting specific limitations on Medicare coverage for the treatment of premalignant skin lesions known as actinic keratoses ("AK").

Appellant American Academy of Dermatology is a national professional medical society for physicians specializing in diseases of the skin. Appellant Florida Society of Dermatology is the principal organization of dermatologists in the State of Florida. Members of both associations participate in the Medicare program and accept assignment of their reimbursement claims from Medicare-covered patients. Additionally many of those members treat patients with AK. Appellant The Seniors Coalition, Inc., is a national nonprofit public advocacy group that seeks to promote and protect the economic well-being and quality of life of senior citizens. A significant number of its Florida members are Medicare beneficiaries who have AK.

Appellants filed suit seeking a temporary restraining order and preliminary and permanent injunctive relief to block the implementation and enforcement of the LMRP. Appellants alleged, inter alia, that the LMRP had been unlawfully promulgated, and that its standards conflict with the requirements of the Medicare Act and the Medicare Carriers Manual by denying coverage for the medically necessary removal or destruction of asymptomatic AK.

The district court denied appellants' motion for a temporary restraining order. Following a hearing on appellants' motion for a preliminary injunction, the district court dismissed the suit for lack of subject matter jurisdiction. The court held that appellants must present their claims to the Secretary and exhaust their administrative remedies pursuant to 42 U.S.C. §§ 405(g) & 1395ff(b)(1) before the court may exercise subject matter jurisdiction. ² It is this determination that we review, specifically, whether physicians and patients are required to present their claims to the Secretary and exhaust administrative remedies before the court may exercise subject matter jurisdiction to review an LMRP under Part B of the Medicare Act.

II. DISCUSSION

Judicial review of benefit determinations under the Medicare Act is authorized by 42 U.S.C. § 1395ff(b)(1), ³ which provides for judicial review only after the Secretary renders a final decision on the claim, in the same manner as is provided in 42 U.S.C. § 405(g) for claims arising under the Social Security Act. ⁴ Judicial review of Medicare Act claims is circumscribed by 42 U.S.C. § 405(h) ⁵, which provides that § 405(g), to the exclusion of 28 U.S.C. § 1331, is the sole avenue for judicial review for all claims for benefits "arising under" the Medicare Act. See Heckler v. Ringer, 466 U.S. 602, 614-15, 104 S.Ct. 2013, 2020-21, 80 L.Ed.2d 622 (1984).

On its face, § 405(g) provides for judicial review only after a "final decision" by the Secretary. The Supreme Court has explained that this "final decision" requirement consists of two elements--(1) "presentment": a nonwaivable, jurisdictional prerequisite that a benefits claim must be presented to the Secretary and (2) "exhaustion": a waivable prerequisite that a claimant fully pursue all available administrative remedies before seeking judicial review. ⁶ See Ringer, 466 U.S. at 617, 104 S.Ct. at 2022; Mathews v. Eldridge, 424 U.S. 319, 328, 96 S.Ct. 893, 899, 47 L.Ed.2d 18 (1976).

In Heckler v. Ringer, 466 U.S. at 614-20, 627, 104 S.Ct. at 2020-24, 2027, the Supreme Court held that presentment and exhaustion under § 405(g) constituted a jurisdictional prerequisite to judicial review of Medicare Act claims that were "essentially" claims for benefits. The Court considered a challenge by potential Medicare beneficiaries to a decision by the Secretary that certain Medicare Part A claims regarding a procedure known as bilateral carotid body resection ("BCBR") would not be reimbursed under the Medicare Act. See id. at 607, 104 S.Ct. at 2017. Three claimants in the case had undergone BCBR surgery, but a fourth plaintiff, Ringer, had not yet undergone the surgery. Id. at 609-10, 104 S.Ct. at 2018-19. The complaint sought (1) declaratory relief that the new policy of the Secretary regarding BCBR surgery contravened the Medicare Act, (2) an injunction ordering the Secretary to instruct the Medicare intermediaries to pay BCBR claims, and (3) an injunction barring the Secretary from requiring claimants to pursue individual administrative appeals in order to obtain payment. Id. at 611, 104 S.Ct. at 2019.

The Court determined that the claims of the three plaintiffs who had already undergone the surgery were "inextricably intertwined" with what was in essence a claim for benefits under the Medicare Act, id. at 624, 104 S.Ct. at 2026, and thus may be brought only in accordance with the requirements of § 405(g). Because those plaintiffs had failed to exhaust administrative remedies as required by § 405(g), the court held that their claims were premature. Id. at 618-19, 104 S.Ct. at 2023-24. As to Ringer's claim, the Court likewise characterized it "as essentially one requesting the payment of benefits for BCBR surgery, a claim cognizable only under § 405(g)." Id. at 620, 104 S.Ct. at 2024. Thus, Ringer was required to "pursue his claim under [§ 405(g) ] in the manner which Congress has provided." ⁷ Id. at 622, 104 S.Ct. at 2025. The Court held that because he had not given the Secretary "an opportunity to rule on a concrete claim for reimbursement," he had not complied with the nonwaivable presentment requirement of § 405(g). Id. at 622, 104 S.Ct. at 2025. The court so held even though Ringer, like appellants in the present case, had not yet undergone the surgery and hence did not yet have a reimbursable Part A claim to present to the Secretary.

We find that Ringer is dispositive of the instant case. The declaratory and injunctive relief sought in that case ordering the Secretary to instruct Medicare intermediaries to refrain from implementing a policy against reimbursing BCBR claims and to pay those claims is indistinguishable, as a practical matter, from the relief sought by the appellants in this case. As noted above, the appellants in this case, prior to the performance of the medical procedures in question, seek a temporary restraining order and preliminary and permanent injunctive relief enjoining the Secretary from refusing to reimburse claims for AK removals deemed uncovered under the LMRP. Thus, this case clearly involves claims for benefits under the Medicare Act of the kind that are only cognizable under § 405(g). ⁸ Accordingly, the requirements of presentment and exhaustion must be met prior to the exercise of judicial...