Anderson v. Sullivan

959 F.2d 690, 1992 U.S. App. LEXIS 4254, 1992 WL 46454
Court of Appeals for the Eighth Circuit·Decided March 13, 1992·No. No. 91-1064·Published·Cited by 27 cases

Opinion

MAGILL, Circuit Judge.

Dr. William E. Anderson, Jr., appeals the dismissal of his claim to force the government to maintain his Medicare reimbursement eligibility during the pendency of his exclusion appeal. The district court1 dismissed the claim for lack of subject matter jurisdiction. Since we find that Anderson’s failure to exhaust his administrative remedies robs this court of subject matter jurisdiction and his claim for mandamus is moot, we affirm.

I.

Anderson practiced medicine in Iowa, receiving reimbursement for services provided under Medicare. On June 9, 1988, the Iowa Foundation for Medical Care — the local peer review organization — recommended to the Inspector General of the Department of Health and Human Services that Anderson be excluded from Medicare reimbursement eligibility for five years.2 The Foundation specifically found that in the cases of four patients, Anderson “grossly and flagrantly” failed to comply with his obligation to provide a professionally recognized standard of care.

[692] The Inspector General, in a letter dated October 7, 1988, accepted the recommendation and excluded Anderson from Medicare eligibility for five years. The Inspector General found not only that Anderson flagrantly violated his obligation to provide quality care, but was unwilling or unable to comply with the requirements of the Act.

Anderson requested a hearing before an administrative law judge. Since Anderson practiced medicine in a rural area, he also was entitled to, and did request, a preliminary hearing before an AU to determine whether he posed a serious risk to Medicare beneficiaries if he continued furnishing services pending the decision on the merits of his exclusion.3 This preliminary hearing was never held. The hearing on the merits was held on July 10, 1989. The AU affirmed the Inspector General’s determination, concluding that a preponderance of the evidence supported the finding that Anderson was unable or unwilling to comply with his obligations under Medicare. Anderson appealed the AU’s decision to the Appeals Council of the Social Security Administration. That appeal is pending.

The exclusion determination made at the AU’s substantive hearing is not before us. Rather, Anderson seeks injunctive, mandamus and declaratory relief to enjoin his exclusion from Medicare participation until he has exhausted his appeals. Specifically, Anderson argues that he should now be granted the preliminary “serious risk” hearing, and that he should remain eligible for Medicare reimbursement pending the completion of this hearing. Anderson maintains that if it is found at his preliminary hearing that he does not pose a serious risk to patients, he should be eligible for Medicare reimbursement throughout the administrative and judicial appeals process. The district court dismissed Anderson’s claims, concluding that Anderson’s failure to exhaust his available administrative remedies deprived the court of subject matter jurisdiction. We agree.

Anderson first contends the court has subject matter jurisdiction under 28 U.S.C. § 1331 (1988), which provides federal court jurisdiction for all actions “arising under the Constitution, laws, or treaties of the United States.”4 We agree with the district court that the Social Security Act precludes general federal subject matter jurisdiction until administrative remedies have been exhausted. The Secretary’s appeal procedure established under the Act provides for review of an AU’s decision by the Appeals Council. 42 C.F.R. § 1004.130 (1991). A claimant may seek review of a final decision of the Secretary in federal court in compliance with 42 U.S.C. § 405(g) (1988). Id. Moreover, the Act statutorily mandates exhaustion of administrative remedies. 42 U.S.C. § 405(h) (1988) (“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 [693] under this subchapter.”). The Supreme Court in Weinberger v. Salfi, 422 U.S. 749, 764, 95 S.Ct. 2457, 2466, 45 L.Ed.2d 522 (1975), interpreted this section to limit federal court jurisdiction on Medicare claims to “final” decisions of the Secretary.

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 an 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.

Id. at 765, 95 S.Ct. at 2467. In Heckler v. Ringer, 466 U.S. 602, 614-15, 104 S.Ct. 2013, 2021, 80 L.Ed.2d 622 (1984), the Supreme Court reaffirmed that “§ 405(g), to the exclusion of 28 U.S.C. § 1331, is the sole avenue for judicial review for all ‘claims arising under’ the Medicare Act.”

Courts explicitly have required exhaustion for challenges to penalties and exclusions rendered under 42 U.S.C. § 1320c-5 (West Supp.1991). Winter v. California Medical Review, Inc., 900 F.2d 1322, 1325 (9th Cir.1990); Lavapies v. Bowen, 883 F.2d 465, 467 (6th Cir.1989); Hussain v. Secretary of Health & Human Resources, 748 F.Supp. 277, 279 (D.N.J.1990) (federal courts have jurisdiction over challenges to sanctions under § 1320c-5 only after the Secretary renders a final decision in the administrative action). In a case involving a related statute, the Eighth Circuit ruled that exhaustion of administrative remedies is required before a provider may challenge an exclusion based on overuse of diagnostic procedures under 42 U.S.C.A. § 1320a-7(b)(6)(B) (West Supp.1991). Thorbus v. Bowen, 848 F.2d 901, 903 (8th Cir.1988).

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Anderson v. Sullivan, 959 F.2d 690, 1992 U.S. App. LEXIS 4254, 1992 WL 46454 (8th Cir. 1992).

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