U.S. v. Univ. Of Mass. Memorial Medical Center, CIV.A. 03-10195-WGY.

• Citation: 296 F.Supp.2d 20
• Decision Date: 19 December 2003
• Docket Number: No. CIV.A. 03-10195-WGY.,CIV.A. 03-10195-WGY.
• Parties: UNITED STATES, Plaintiff, v. UNIVERSITY OF MASSACHUSETTS MEMORIAL MEDICAL CENTER, Defendant.
• Court: United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts

296 F.Supp.2d 20

UNITED STATES, Plaintiff, v. UNIVERSITY OF MASSACHUSETTS MEMORIAL MEDICAL CENTER, Defendant.

No. CIV.A. 03-10195-WGY.

United States District Court, D. Massachusetts.

December 19, 2003.

Nancy Rue, United States Attorney's Office, Boston, MA, for USA, Plaintiff.

Richard P. Ward, Ropes & Gray LLP, Boston, MA, for University Of Massachusetts Memorial Medical Center, Defendant.

MEMORANDUM AND ORDER

YOUNG, Chief Judge.

The United States alleges that the defendant, the University of Massachusetts Medical Memorial Center ("UMass"), improperly received overpayments for outpatient laboratory services provided to Medicare beneficiaries. Seeking to recoup those overpayments, the United States initiated the present suit, asserting common law causes of action for unjust enrichment and payment under mistake of fact, and requesting various equitable remedies including an accounting, disgorgement of improper gains, imposition of a constructive trust, and prejudgment interest. UMass moved to dismiss for lack of subject matter jurisdiction.

I. PROCEDURAL AND REGULATORY BACKGROUND¹

The United States alleges that UMass, in providing and billing for Medicare services, has submitted claims resulting in systematic overpayment. Compl. [Doc. No. 1] ¶¶ 66, 71, 74, 75, 81. The specific claims at issue are those submitted for complete blood counts and for blood chemistry tests performed on an outpatient basis between July 1, 1993, and December 31, 1996. Id. ¶¶ 66, 75. While the parties dispute precisely how these claims were reimbursed, they agree that the Department of Health and Human Services ("HHS"), the agency charged with administering the Medicare program, determined and paid out the reimbursements, and that UMass received them. Id. ¶¶ 75, 86; Def.'s Reply Br. [Doc. No. 14] at 2.

As the United States stated at oral argument on September 11, 2003, its Complaint reflects the findings of a nationwide investigation of Medicare billing conducted by the Department of Justice. Having removed the inquiry from HHS, the United States argues that it is neither appropriate nor necessary to return the matter to the agency to exhaust administrative procedures. See Pl.'s Opp'n [Doc. No. 12] at 10-12 (arguing, inter alia, that "[t]his is because [administrative] remedies are simply inapplicable to claims brought by the United States," and that "[f]rom a factual standpoint, no administrative process is appropriate because the United States' allegations in this case are very simple.").

Citing the United States' failure to exhaust, UMass seeks dismissal or judgment on the pleadings based on a lack of subject matter jurisdiction, on considerations of justiciability, and on the adequacy of legal remedies. Def.'s Mot. to Dismiss. [Doc. No. 9]; Def.'s Mem. in Support [Doc. No. 10] at 1. The Court begins, as it must, by considering its subject matter jurisdiction.

II. DISCUSSION

A. Legal Standard

On a motion to dismiss under Rule 12(b)(1), "the party invoking federal court jurisdiction bears the burden of proving its existence." Pejepscot Indus. Park, Inc. v. Maine Cent. R.R. Co., 215 F.3d 195, 200 (1st Cir.2000). Proper construction of the complaint depends on the nature of the movant's challenge. See Valentin v. Hospital Bella Vista, 254 F.3d 358, 363 (1st Cir.2001). If the challenge is to the sufficiency of the facts supporting jurisdiction, the Court should credit the plaintiff's well-pleaded factual allegations as true and draw all reasonable inferences from them in his favor. Id. If, however, the challenge is to the accuracy of the facts supporting jurisdiction, "the plaintiff's jurisdictional averments are entitled to no presumptive weight; the court must address the merits of the jurisdictional claim by resolving the factual disputes between the parties." Id.

Here, UMass challenges the accuracy of the facts supporting jurisdiction, urging the Court to "determine the relevant actual facts" rather than credit the allegations in the United States' Complaint. Def.'s Mot. to Dismiss at 1. The Court accordingly enjoys "considerable leeway" in deciding any "factbound jurisdictional question[s]." Valentin, 254 F.3d at 364. The Court must weigh the proof and draw reasonable inferences to satisfy itself that subject matter jurisdiction exists. Id.

B. 42 U.S.C. § 405(h)

UMass asserts that Section 405(h) bars an exercise of subject matter jurisdiction over the present action, which seeks review of the Secretary's reimbursement determinations prior to administrative exhaustion. Def.'s Mem. in Support at 7-11. In response, the United States contends that the jurisdictional limits imposed by Section 405(h) apply to actions brought against the United States only. Pl.'s Opp'n at 6-10. In support of this interpretation, the United States contends, inter alia, that requiring it to exhaust the administrative process would be inappropriate and unnecessary. Pl.'s Opp'n at 10-12. The threshold question whether the limits imposed by Section 405(h) apply to actions brought by the United States appears to be one of first impression in this Circuit.²

Before proceeding, the Court emphasizes that this Memorandum does not concern an action brought under the False Claims Act. See 31 U.S.C. §§ 3729-33 (2000). Actions brought under the False Claims Act do not fall within the special competence of HHS. Rather, actions brought under the "expansively" written False Claims Act seek "to reach all types of fraud," committed on all types of agencies. Cook County v. United States ex rel. Chandler, 538 U.S. 119, 123 S.Ct. 1239, 1246, 155 L.Ed.2d 247 (2003) (quoting United States v. Neifert-White Co., 390 U.S. 228, 232, 88 S.Ct. 959, 19 L.Ed.2d 1061 (1968)). Moreover, claims alleging fraud and falsity fall "within the conventional experience of judges." In re Long Distance Telecomm. Litig., 831 F.2d 627, 633 (6th Cir.1987) (quoting Far East Conf. v. United States, 342 U.S. 570, 574, 72 S.Ct. 492, 96 L.Ed. 576 (1952)).

Here, however, the United States seeks to recover overpayments due not to fraud or falsity but to misinterpretation of Medicare regulations. The United States' claims are accordingly "inextricably intertwined" with reimbursement determinations that are the subject of the Secretary's particular experience and expertise. See Heckler v. Ringer, 466 U.S. 602, 614, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984); 42 U.S.C. § 1395g ("The Secretary shall periodically determine the amount which should be paid under this part to each provider of services ...."). Because Section 405(h) has been interpreted to assure the Secretary "greater opportunity to apply interpret, or revise policies, regulations, or statutes," the provision assumes special significance in the present action. Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 13, 120 S.Ct. 1084, 146 L.Ed.2d 1 (2000).

In construing Section 405(h) as it applies here, the Court follows the "familiar canon of statutory construction that the starting point for interpreting a statute is the language of the statute itself." Consumer Prod. Safety Comm'n v. GTE, Sylvania, Inc., 447 U.S. 102, 108, 100 S.Ct. 2051, 64 L.Ed.2d 766 (1980). Section 405(h), as applied to the Medicare Act, provides:

Finality of [Secretary's] decision

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 1331 or 1346 of Title 28 to recover on any claim arising under this subchapter.

42 U.S.C. § 405(h), as applied by 42 U.S.C. § 1395ii.

The second sentence of Section 405(h) provides that "[n]o findings of fact or decision of the [Secretary] shall be reviewed ... except as herein provided." 42 U.S.C. § 405(h). No part of the sentence suggests that review is limited only in actions brought against the United States. Cf. Weinberger v. Salfi, 422 U.S. 749, 757, 95 S.Ct. 2457, 45 L.Ed.2d 522 (1975) (rejecting a narrow interpretation of Section 405(h) as inconsistent with the "sweeping and direct" language of the provision's third sentence). Indeed, if application of the second sentence were limited to actions brought against the United States, it would be largely superfluous because actions "against the United States, the Secretary, or any officer of employee thereof" are independently barred by the third sentence. Cf. id. at 758, 95 S.Ct. 2457 (rejecting an interpretation that relegated the third sentence of Section 405(h) "to a function which is already performed by other statutory provisions").

This Court's reading of Section 405(h) is supported by previous constructions by the Supreme Court and by other lower courts. In Salfi, the Supreme Court concluded that the third sentence of Section 405(h), if properly construed to have independent significance, extended beyond "a codified requirement of administrative exhaustion." Id. at 758, 95 S.Ct. 2457. The Supreme Court's conclusion was based in part on its interpretation of the first two sentences of Section 405(h). Id. at 757-59, 95 S.Ct. 2457. The Supreme Court noted that those sentences, wholly apart from the third sentence, "assure that administrative exhaustion will be required" and more specifically, "prevent review of decisions of the Secretary save as provided in the Act." Id. at 758, 95 S.Ct. 2457. In a footnote,³ the Supreme Court explained that "by virtue of the second sentence," even a "nonfinal" determination by the Secretary "may not be reviewed save pursuant to § 405(g)."⁴ Id. at 759 n. 6, 95 S.Ct. 2457.

Consistently with Salfi, the United States District Court for the District of Idaho concluded that Section 405(h) "does not merely apply to actions brought against the government to recover benefits under the Medicare...