Oakland Med v. HHS

• Court: Court of Appeals for the Sixth Circuit
• Decided: July 31, 2002
• Docket: 01-1201
• Status: Published

Opinion

5(&200(1'(' )25 )8//7(;7 38%/,&$7,21 3XUVXDQW WR 6L[WK &LUFXLW 5XOH 

(/(&7521,& &,7$7,21  )(' $SS 3 WK &LU )LOH 1DPH DS

81,7('67$7(6&28572)$33($/6 )257+(6,;7+&,5&8,7 BBBBBBBBBBBBBBBBB

2$./$1' 0(',&$/ *5283 ; 3& +$52/' 0$5*2/,6  '2   1R 3ODLQWLIIV$SSHOODQWV  !  Y   6(&5(7$5< 2) +($/7+ $1'  +80$1 6(59,&(6 +($/7+  &$5( ),1$1&,1*   $'0,1,675$7,21  'HIHQGDQW$SSHOOHH  1 $SSHDOIURPWKH8QLWHG6WDWHV'LVWULFW&RXUW IRUWKH(DVWHUQ'LVWULFWRI0LFKLJDQDW'HWURLW 1R²-RKQ&RUEHWW2¶0HDUD'LVWULFW-XGJH 6XEPLWWHG-XQH 'HFLGHGDQG)LOHG-XQH %HIRUH0$57,1&KLHI&LUFXLW-XGJH.(,7+DQG .(11('<&LUFXLW-XGJHV

7KLV GHFLVLRQ ZDV RULJLQDOO\ LVVXHG DV DQ ³XQSXEOLVKHG GHFLVLRQ´ ILOHG RQ -XQH   2Q -XO\   WKH FRXUW GHVLJQDWHG WKH RSLQLRQ DV RQH UHFRPPHQGHG IRU IXOOWH[W SXEOLFDWLRQ

  2DNODQG0HGLFDO*URXSHWDOY 1R 1R 2DNODQG0HGLFDO*URXSHWDOY  6HFUHWDU\RI+HDOWKDQG+XPDQ6HUYV 6HFUHWDU\RI+HDOWKDQG+XPDQ6HUYV

BBBBBBBBBBBBBBBBB (additional citation and internal punctuation omitted). Second, "the risk of erroneous deprivation of provider status &2816(/ is quite manageable." Cathedral Rock, 223 F.3d at 365 (quoting Northlake, 654 F.2d at 1242). Finally, the 21 %5,()  )UHGHULFN % %HOODP\ .HLWK - 6ROWLV government has a strong interest in expediting provider- 9$1'(5 0$/( %(//$0< *,/&+5,67 9$1'( termination procedures because: (1) "[t]he Secretary’s 9866( &$))(57<'HWURLW0LFKLJDQIRU$SSHOODQWV responsibility for insuring the safety and care of elderly and %DUEDUD)$OWPDQ81,7('67$7(6'(3$570(172) disabled Medicare patients is of primary importance," and +($/7+$1'+80$16(59,&(6&KLFDJR,OOOLQRLVIRU (2) ³WKHJRYHUQPHQWKDVDVWURQJLQWHUHVWLQPLQLPL]LQJWKH $SSHOOHH H[SHQVHVRIDGPLQLVWHULQJWKH0HGLFDUHSURJUDP´&DWKHGUDO 5RFN)GDWTXRWLQJ1RUWKODNH)GDW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¶VFHUWLILFDWLRQWRSHUIRUPODERUDWRU\WHVWLQJ WKHUHE\ UHQGHULQJ 2DNODQG LQHOLJLEOH WR UHFHLYH 0HGLFDUH SD\PHQWV%HIRUHH[KDXVWLQJWKHLUDGPLQLVWUDWLYHUHPHGLHV 2DNODQG DQG 0DUJROLV EURXJKW D ODZVXLW LQ WKH (DVWHUQ 'LVWULFW RI 0LFKLJDQ  FKDOOHQJLQJ WKH VXEVWDQFH RI WKH GHFLVLRQWRUHYRNH2DNODQG¶VFHUWLILFDWLRQDQGFODLPLQJ WKDW WKH 6HFUHWDU\¶V IDLOXUH WR FRQWLQXH 0HGLFDUH SD\PHQWV ZKLOH 2DNODQG VRXJKW UHYLHZ RI WKH UHYRFDWLRQ GHFLVLRQ YLRODWHG WKH 'XH 3URFHVV &ODXVH RI WKH )LIWK $PHQGPHQW 7KHGLVWULFWFRXUWGLVPLVVHGWKHLUODZVXLWIRUODFNRIVXEMHFW PDWWHUMXULVGLFWLRQ:H$)),50 , 7KH &OLQLFDO /DERUDWRU\ ,PSURYHPHQW $PHQGPHQWV RI 86&†DDQGLPSOHPHQWLQJUHJXODWLRQV &)53DUWUHJXODWHDOOFOLQLFDOODERUDWRU\VHUYLFHVLQWKH 8QLWHG6WDWHV2QO\ODERUDWRULHVWKDWKDYHDYDOLGODERUDWRU\  2DNODQG0HGLFDO*URXSHWDOY 1R 1R 2DNODQG0HGLFDO*URXSHWDOY  6HFUHWDU\RI+HDOWKDQG+XPDQ6HUYV 6HFUHWDU\RI+HDOWKDQG+XPDQ6HUYV

benefits awarded in a post-deprivation hearing. 0DWWKHZVY WHVWLQJFHUWLILFDWHXQGHUWKH$PHQGPHQWVPD\SHUIRUP (OGULGJH424 U.S. 319, 330-32, 96 S.Ct. 893, 47 L.Ed.2d 18 ODERUDWRU\WHVWLQJ86&†[V :HVW (1976); see also Cathedral Rock, 223 F.3d at 361-62. 0RUHRYHUXQGHUWKH0HGLFDUH$FWDODERUDWRU\¶VFHUWLILFDWLRQ XQGHUWKH$PHQGPHQWVLVDSUHFRQGLWLRQWRLWVHOLJLELOLW\ In Cathedral Rock, a nursing facility challenged the WRUHFHLYH0HGLFDUHSD\PHQWVIRUGLDJQRVWLFWHVWLQJ6HH Secretary’s determination that it was not in compliance with &)5 † D  :HVW  VHH DOVR  86& Medicare regulations and claimed that the Fifth Amendment’s †Z Due Process Clause mandated a hearing before the cancellation of its Medicare payment eligibility. This court 7KURXJK WKH +HDOWK &DUH )LQDQFLQJ $GPLQLVWUDWLRQ WKH found that the plaintiff’s procedural due process claim was 6HFUHWDU\ RI +HDOWK DQG +XPDQ 6HUYLFHV PD\ LPSRVH entirely collateral and, therefore, turned to the issue of VDQFWLRQVLQFOXGLQJVXVSHQVLRQRI0HGLFDUHSD\PHQWVRQDQ\ whether the nursing facility made "a colorable claim that full ODERUDWRU\WKDWGRHVQRWFRPSO\ZLWKWKH$PHQGPHQWV relief would not be possible if it was awarded retroactive 86&†Z relief through a post-deprivation hearing." Id. at 364. %HIRUH FDQFHOLQJ D ODERUDWRU\¶V DSSURYDO WR UHFHLYH Relying on the factors articulated by the Supreme Court in 0HGLFDUHSD\PHQWVWKH6HFUHWDU\SURYLGHVZULWWHQQRWLFHRI Eldridge for determining whether procedural due process WKH UDWLRQDOH IRU KLV DFWLRQ DQG WKH HIIHFWLYH GDWH  6HH  requires a pre-termination hearing, the Cathedral Rock court &)5†E:HVW0RUHRYHUWKH6HFUHWDU\ determined that the nursing facility did not state a cognizable RIIHUV WKH ODERUDWRU\ DQ ³>R@SSRUWXQLW\ WR VXEPLW ZULWWHQ due process claim. See id. at 365-66 (concluding that the HYLGHQFH RU RWKHU LQIRUPDWLRQ´ WKDW ZRXOG DUJXH DJDLQVW nursing facility was not constitutionally entitled to a pre- FDQFHOODWLRQRILWVDSSURYDOWRUHFHLYH0HGLFDUHSD\PHQWV,G termination hearing). The Eldridge factors are: (1) "the private interests that will be affected by the official action"; 7KHUHJXODWLRQVIRUWKH$PHQGPHQWVSURYLGHWKDWD (2) "the risk of an erroneous deprivation of such interest ODERUDWRU\GLVVDWLVILHGZLWKDFHUWLILFDWHUHYRFDWLRQGHFLVLRQ through the procedures used, and the probable value, if any, PD\DSSHDO6HH&)5†D I :HVW of the additional or substitute procedural safeguards"; and   *HQHUDOO\ VXFK DQ DSSHDO IRUHVWDOOV FHUWLILFDWH UHYRFDWLRQ ZKLFK ³LV QRW HIIHFWLYH XQWLO DIWHU D KHDULQJ (3) "the Government’s interest, including the function GHFLVLRQ E\ DQ $GPLQLVWUDWLYH /DZ -XGJH LV LVVXHG´   involved and the fiscal and administrative burdens that the &)5 † G  L VHH DOVR  &)5 additional or substitute procedural requirement would entail." † H  :HVW   $ UHTXHVW IRU D KHDULQJ Eldridge, 424 U.S. at 335. KRZHYHUGRHVQRWGHOD\ZLWKGUDZDORIDSSURYDOIRU0HGLFDUH Application of the Eldridge factors here reaffirms the SD\PHQWV&)5†E³This sanction may be soundness of the Cathedral Rock decision: First, although the imposed before the hearing that may be requested by a economic impact of canceling Medicare eligibility is laboratory, in accordance with the appeals procedures set significant, "a provider’s financial need to be subsidized for forth in §§ 493.1844."&)5†G  the care of its Medicare patients is only incidental to the purpose and design of the [Medicare] program." Cathedral Rock, 223 F.3d at 364-65 (quoting Northlake Community Hosp. v. United States, 654 F.2d 1234, 1242 (7th Cir. 1981))  2DNODQG0HGLFDO*URXSHWDOY 1R 1R 2DNODQG0HGLFDO*URXSHWDOY  6HFUHWDU\RI+HDOWKDQG+XPDQ6HUYV 6HFUHWDU\RI+HDOWKDQG+XPDQ6HUYV

,,  LQFRUSRUDWHG LQWR WKH 0HGLFDUH $FW SXUVXDQW WR  86&†LL (IIHFWLYHSXUVXDQWWRDQ$GPLQLVWUDWLYH/DZ-XGJHGHFLVLRQ RQ-XO\WKH6HFUHWDU\UHYRNHGWKHODERUDWRU\WHVWLQJ 7KH0HGLFDUH$FWOLPLWVMXGLFLDOUHYLHZRIWKH6HFUHWDU\¶V FHUWLILFDWH RI RQH RI 2DNODQG¶V ODERUDWRULHV  $IWHU GHFLVLRQVXQGHUHLWKHU86&†IHGHUDOTXHVWLRQRU GHWHUPLQLQJ 2DNODQG¶V RZQHUVKLS RI WKH ODERUDWRU\ WKH 86&†8QLWHG6WDWHVDVGHIHQGDQWWRWKHPHWKRGV 6HFUHWDU\UHYRNHGWKHODERUDWRU\WHVWLQJFHUWLILFDWHVRIDOOWKH DUWLFXODWHGLQVHFWLRQJ 2DNODQGRZQHGODERUDWRULHV7KH6HFUHWDU\DOVRZLWKGUHZLWV 0HGLFDUH SD\PHQW DSSURYDO IRU DOO 2DNODQGRZQHG No findings of fact or decision of the Commissioner of ODERUDWRULHV Social Security shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No %HIRUHH[KDXVWLQJWKHLUDGPLQLVWUDWLYHUHPHGLHV2DNODQG action against the United States, the Commissioner of DQG 0DUJROLV ILOHG D ODZVXLW LQ WKH (DVWHUQ 'LVWULFW RI Social Security, or any officer or employee thereof shall 0LFKLJDQWRHQMRLQWKH6HFUHWDU\IURPZLWKGUDZLQJ2DNODQG¶V be brought under section 1331 or 1346 of Title 28 to SHUPLVVLRQWRUHFHLYH0HGLFDUHSD\PHQWV7KHGLVWULFWFRXUW recover on any claim arising under this subchapter. GLVPLVVHG WKH FRPSODLQW IRU ODFN RI VXEMHFW PDWWHU MXULVGLFWLRQ 42 U.S.C.A. § 405(h) (West 2002) (incorporated into the Medicare Act pursuant to 42 U.S.C. § 1395ii). Thus, section ,,, 405(h) "‘channels most, if not all, Medicare claims through the special review system’ of an administrative hearing and :HUHYLHZGHQRYRWKHGLVWULFWFRXUW¶VGHWHUPLQDWLRQWKDWLW ‘purports to make exclusive the judicial review method set ODFNHGVXEMHFWPDWWHUMXULVGLFWLRQRYHUSODLQWLIIV¶FODLP6HH forth in section 405(g).’" Cathedral Rock of North College Agrawal v. Paul Revere Life Ins. Co., 205 F.3d 297, 299 (6th Hill, Inc. v. Shalala, 223 F.3d 354, 358-59 (6th Cir. 2000) Cir. 2000) (quoting Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1, 8-9, 120 S.Ct. 1084, 146 L.Ed.2d 1 (2000)) $ (internal punctuation omitted). 8QGHUWKH0HGLFDUH$FWDQLQVWLWXWLRQ³Gissatisfied with a Here, Oakland and Margolis challenge the Secretary’s determination by the Secretary [to cancel its eligibility to decision to cancel Oakland’s eligibility for Medicare receive Medicare payments] . . . shall be entitled to a hearing payments. Thus, absent an applicable exception, section thereon by the Secretary . . . and to judicial review of the 405(h) precludes the district court from exercising subject Secretary’s final decision after such hearing as is provided in matter jurisdiction over their claim. section 405(g)." 42 U.S.C.A. § 1395cc(h)(1). Section 405(g) provides: "Any individual, after any final decision of the % [Secretary] . . . may obtain a review of such decision by a civil action commenced within sixty days after the mailing to Section 405(g)’s exhaustion requirement may be waived him of notice of such decision or within such further time as where a plaintiff’s claim is "entirely collateral" to his the [Secretary] may allow."   86&$ † J :HVW substantive claim of entitlement and he makes a colorable claim that he could not obtain full relief through retroactive