St. Francis Medical Center v. Shalala , 32 F.3d 805 ( 1994 )


Menu:
  •                                                                                                                            Opinions of the United
    1994 Decisions                                                                                                             States Court of Appeals
    for the Third Circuit
    8-5-1994
    St. Francis Medical Center v. Shalala, et al.
    Precedential or Non-Precedential:
    Docket 93-3405
    Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_1994
    Recommended Citation
    "St. Francis Medical Center v. Shalala, et al." (1994). 1994 Decisions. Paper 104.
    http://digitalcommons.law.villanova.edu/thirdcircuit_1994/104
    This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
    University School of Law Digital Repository. It has been accepted for inclusion in 1994 Decisions by an authorized administrator of Villanova
    University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
    UNITED STATES COURT OF APPEALS
    FOR THE THIRD CIRCUIT
    ____________
    No. 93-3405
    ____________
    ST. FRANCIS MEDICAL CENTER,
    Appellant
    v.
    DONNA E. SHALALA, Secretary of the
    Department of Health and Human Services,
    BRUCE C. VLADECK, Administrator,
    Health Care Financing Administration; and
    JACK MARTIN, Chairman, Provider
    Reimbursement Review Board
    ____________________
    ON APPEAL FROM THE UNITED STATES DISTRICT COURT
    FOR THE WESTERN DISTRICT OF PENNSYLVANIA
    ____________________
    (D.C. Civil No. 89-02452)
    Argued: March 2, 1994
    Before:   SLOVITER, Chief Judge, ALITO, Circuit Judge,
    and PARELL, District Judge*
    (Opinion Filed:     August 9, 1994)
    STEPHEN P. NASH, ESQ.
    MELINDA J. ROBERTS, ESQ. (ARGUED)
    DAVID W. THOMAS, ESQ.
    JACQUELINE O. SHOGAN, ESQ.
    Nash and Company
    700 Westinghouse Building
    Pittsburgh, PA 15222
    Attorneys for Appellant
    * The Honorable Mary Little Parell, United States District Court
    Judge for the District of New Jersey, sitting by designation.
    FRANK W. HUNGER
    Assistant Attorney General
    Civil Division
    THOMAS W. CORBETT, JR.
    United States Attorney
    PAUL J. BRYSH
    Office of United States Attorney
    633 United States Post Office
    and Courthouse Building
    Pittsburgh, PA 15219
    BARBARA H. FISHER
    Department of Health & Human Services
    6325 Security Boulevard
    500 East High Rise Building
    Baltimore, MD 21207
    GERARD KEATING (ARGUED)
    Department of Health & Human Services
    Health Care Financing Division
    330 Independence Avenue, S.W.
    Washington, D.C. 20201
    Attorneys for Appellees
    ____________________
    OPINION OF THE COURT
    ____________________
    ALITO, Circuit Judge:
    St. Francis Medical Center (SFMC) is a provider of
    health care services covered under Part A of Title XVIII of the
    Social Security Act, 42 U.S.C. § 1395 et. seq., which is commonly
    known as the Medicare Act.   SFMC appeals from a district court
    order dismissing its amended complaint for lack of jurisdiction
    under 28 U.S.C. § 1331.   We affirm.
    I.
    A.   Before 1982, Medicare providers were reimbursed for
    the "reasonable cost" of covered services.    See Sacred Heart
    Medical Ctr. v. Sullivan, 
    958 F.2d 537
    , 540 (3d Cir. 1992).
    "Under this regime, hospitals and other health care providers had
    little incentive to curb operating costs and render services more
    economically, for the federal government bore the financial
    burden of increases."    
    Id. (footnote omitted).
      "In 1982,
    Congress determined that the Medicare Program should be modified
    to provide hospitals with better incentives to render services
    more economically.    Accordingly, in the Tax Equity and Fiscal
    Responsibility Act of 1982 (TEFRA) Congress amended the [Social
    Security Act] by imposing a ceiling on the rate of increase of
    inpatient operating costs recoverable by a hospital."    
    Id. (footnote omitted).
    "Under TEFRA, a hospital may receive no more than the
    ``target amount' of per patient costs."    St. Francis
    Medical Ctr. v. Sullivan, 
    962 F.2d 1110
    , 1111 (3d Cir.
    1992) (St. Francis I).          The statute provided:
    "``target amount' means with respect to a hospital for a
    particular 12-month cost reporting period -- (i) in the
    case of the first reporting period for which this
    subsection is in effect, the allowable operating costs
    of inpatient hospital services . . . recognized . . .
    for such hospital for the preceding 12-month cost
    reporting period."    [42 U.S.C. §] 1395ww(b)(3)(A).    For
    each reporting period subsequent to the initial period,
    the target amount was increased by a specified
    percentage.   Section 1395ww(b)(3)(A).   Under this
    system, hospitals were obligated to absorb operating
    costs in excess of their target amounts, but they
    received bonuses if their operating costs were less
    than their targeted amounts.   Section 1395ww(b)(1)(A).
    Sacred Heart Medical 
    Ctr., 958 F.2d at 540
    .
    TEFRA also directed the Secretary to provide for
    exemptions from, and exceptions or adjustments to, the TEFRA
    limits (see 42 U.S.C. § 1395ww(b)(3)(A)), and the Secretary has
    done so.   Before 1991, 42 C.F.R. § 413.40(g) (1990), which bore
    the heading "Exceptions," permitted the Health Care Financing
    Administration (HCFA)1 to "adjust a hospital's operating costs .
    . . upward or downward" if the hospital could "show that it
    incurred unusual costs (in either a cost reporting period subject
    to the ceiling or the hospital's base period) due to
    extraordinary circumstances beyond its control" (42 C.F.R. §
    413.40(g)(2) (1990)) or if the hospital had experienced a change
    in its "case mix" (42 C.F.R. § 413.40(g)(3) (1990)).    In
    addition, 42 C.F.R. § 413.40(h), which bore the heading
    "Adjustments," provided in pertinent part:
    1
    . The Secretary has delegated considerable administrative
    responsibility for the Medicare Program to the HCFA. See Sacred
    Heart Medical 
    Ctr., 958 F.2d at 540
    n.4.
    HCFA may adjust the amount of the operating costs
    considered in establishing cost per case for one or
    more cost reporting periods, including both periods
    subject to the ceiling and the hospital's base period,
    to take into account factors that could result in a
    significant distortion in the operating costs of
    inpatient hospital services.
    42 C.F.R. § 413.40(h)(1) (1990).
    In 1991, these provisions were combined to form what is
    now 42 C.F.R. § 413.40(g) (1993).   Under this provision, the HCFA
    "may adjust the amount of the operating costs considered in
    establishing the rate-of-increase ceiling for one or more cost
    reporting periods, including both periods subject to the ceiling
    and the hospital's base period, under the circumstances specified
    below."    Subsequent provisions state that such adjustments may be
    granted for essentially the same reasons listed in the previous
    version of the regulations.    See 42 C.F.R. § 413.40(g)(2)-(3)
    (1993).2
    2
    .   These provisions state:
    (2) Extraordinary circumstances. HCFA may make an
    adjustment to take into account unusual costs (in
    either a cost reporting period subject to the ceiling
    or the hospital's base period) due to extraordinary
    circumstances beyond the hospital's control. These
    circumstances include, but are not limited to, strikes,
    fire, earthquakes, floods, or similar unusual
    occurrences with substantial cost effects.
    (3) Comparability of cost reporting periods -- (i)
    Adjustment for distortion. HCFA may make an adjustment
    to take into account factors that would result in a
    significant distortion in the operating costs of
    inpatient hospital services between the base year and
    the cost reporting period subject to the limits.
    The Secretary now interprets 42 C.F.R. § 413.40(g)
    (1993) to mean that a provider may obtain two different types of
    "base period inpatient operating cost adjustments."     Appellees'
    Br. at 7.    According to the Secretary, the first type is "cost
    year-specific" and may raise a provider's target amount for the
    purpose of recovering that year's costs but not for the purpose
    of calculating bonus payments.    
    Id. at 7-9.
      The second type of
    adjustment, the Secretary explains, results in "a permanent
    adjustment to the base period inpatient operating costs used to
    calculate the TEFRA limit," and "any permanent increase in the
    limit would come into play under the TEFRA bonus provision
    beginning only with the fiscal year after the one for which any
    permanent base period relief [is] granted."     
    Id. at 8-9.
      SFMC
    argues vigorously that the Secretary's recognition of this second
    type of adjustment represents a recent change in position that
    was taken for purposes of litigation.
    In 1983, Congress largely replaced the TEFRA system
    with a "prospective payment system" (PPS) (see Sacred Heart
    Medical 
    Ctr., 958 F.2d at 540
    ), but certain types of hospitals
    and hospital units were excluded from the PPS.     See 42 U.S.C. §
    1395ww(b), and (d)(1)(A)-(B); 42 C.F.R. §§ 412.20(b), 412.22(b).
    Among the excluded units were distinct part rehabilitation units.
    See 42 U.S.C. § 1395ww(d)(1)(B); 42 C.F.R. §§ 412.23, 412.30.
    B.   SFMC operates a general acute-care hospital that
    includes a rehabilitation unit.    For TEFRA purposes, the
    hospital's base period ended on June 30, 1985.   During this
    period, SFMC's fiscal intermediary concluded that SFMC did not
    have a distinct part rehabilitation unit under the applicable
    regulations "since less than 75% of its patients required
    intensive rehabilitation.   The intermediary terminated the
    provider as a distinct part rehabilitation unit and the Health
    Care Financ[ing] Administration . . . upheld that decision.      To
    comply with the 75% rule, the Medical Center transferred some of
    its ``non-qualifying' patients from the rehabilitation unit to its
    acute care facility.   This transfer was completed in the year
    ending July 30, 1986 . . . ."   St. Francis 
    I, 962 F.2d at 1112
    .
    Because this transfer was not completed until after the base
    period ended, SFMC maintains,
    certain "non-qualifying" patients were included on the
    original 1985 cost report for the Medical Center's
    rehabilitation unit, but then were transferred out of
    that unit by 1986. The absence of these "non-
    qualifying" patients from the group of patients treated
    by the unit in 1986 meant that the Medical Center's
    average patient costs were higher in 1986 than the
    estimates of those costs derived from the 1985 base
    year cost report. In addition, the base year cost
    report did not include costs associated with a physical
    expansion project completed in 1986.
    
    Id. at 1113.
    SFMC sought relief under 42 C.F.R. § 413.40(g) and (h)
    for the cost reporting period ending June 30, 1986.   Although the
    intermediary recommended partial relief, the HCFA denied SFMC's
    requests.   The HCFA concluded that SFMC's transfer of
    nonqualifying patients out of the rehabilitation unit after the
    base period did not constitute "an extraordinary circumstance
    beyond the hospital's control" but resulted from a "management
    decision" to claim the transferred patients as rehabilitation
    cases in the base year.    App. at 24-25.   The HCFA also concluded
    that an adjustment was not warranted by the hospital's building
    program.   
    Id. at 24-25.
      The HCFA noted that expansion is usually
    undertaken to accommodate "increased utilization," which in turn
    tends to "offset any impact on a target rate."     
    Id. at 24.
    However, in SFMC's case, the HCFA observed, "while an expansion
    program was being implemented, the size of the rehabilitation
    unit was being decreased."    
    Id. SFMC appealed
    to the Provider Reimbursement Review
    Board (PRRB), but the PRRB held that it lacked jurisdiction to
    hear the appeal because, among other things, SFMC had not
    satisfied the $10,000 amount-in-controversy requirement in 42
    U.S.C. § 1395oo(f). The PRRB wrote:
    Under Section 1878(a) Title XVIII, Social Security Act,
    as amended, [42 U.S.C. § 1395oo(a)], and 42 C.F.R.
    405.1835 and 1841, a provider has a right to a hearing
    before the Board with respect to costs claimed on a
    timely filed cost report if it is dissatisfied with the
    final determination of the intermediary . . . , and the
    amount in controversy is $10,000, or more, and the
    request for hearing was filed within 180 days of the
    date of the final determination . . . . [T]he amount
    in controversy for the issues you wish to raise is less
    than $10,000. Since the above statutory requirement is
    a prerequisite to a provider's right to a hearing, the
    Board finds that it does not have jurisdiction over
    this appeal and hereby dismisses the appeal of the
    subject year.
    App. at 32.3
    SFMC then filed this action in district court.
    Asserting that the district court had jurisdiction under 42
    U.S.C. § 1395oo(f), SFMC's complaint alleged that the PRRB had
    "wrongfully declined jurisdiction" and that the fiscal
    intermediary and the HCFA had erred in denying SFMC's requests
    "to amend and/or reopen its 1985 cost report."   App. at 62.   The
    complaint sought a declaration that the intermediary, the HCFA,
    and the PRRB had acted improperly.   
    Id. In addition,
    the
    complaint requested that the court order that SFMC be given
    permission to amend its 1985 cost report; that the intermediary,
    the HCFA, and the PRRB "recalculate [SFMC's] base year cost per
    discharge in accordance with its amended cost report"; and that
    SFMC be awarded "the sums due it pursuant to the amended cost
    3
    . While the PRRB denied jurisdiction over SFMC's claims for
    fiscal year 1985, it exercised jurisdiction over SFMC's claims
    for fiscal year 1986. These claims were settled, and SFMC was
    granted reimbursement for its full inpatient operating costs for
    fiscal years 1986 through 1988. App. at 36, 46-50; Appellant's
    Br. at 12. This reimbursement totalled $1,117,355. App. at 37-
    38. With respect to bonus payments, the settlement stated:
    The Provider agrees that no exception awarded under 42
    C.F.R. 413.40(g) by virtue of this settlement or any
    HCFA decision related to the capital expansion program
    shall entitle the Provider to any TEFRA incentive
    payments or other payments in excess of final audited
    costs. The parties make no agreement with respect to
    the appropriateness of any TEFRA incentive payments or
    other payments in excess of final audited costs should
    an adjustment be awarded under 42 C.F.R. 413.40(h).
    
    Id. at 39-40.
      SFMC subsequently dismissed its 1986 PRRB appeal.
    
    Id. at 259.
    report, together with interest thereon" and attorney's fees.      
    Id. at 62-63.
    The Secretary moved to dismiss the case for lack of
    jurisdiction, contending that SFMC had not met the $10,000
    amount-in-controversy requirement in 42 U.S.C. §1305oo(f).     The
    magistrate judge to whom the case had been referred rejected this
    argument and therefore recommended that this motion be denied and
    that the case be remanded to the PRRB.    The magistrate judge did
    not find that SFMC was seeking to recover $10,000 or more for the
    cost reporting period at issue, i.e., the period ending on June
    30, 1986.    Instead, the magistrate judge concluded:
    The PRRB attempts to isolate each year involved to
    determine whether it meets the $10,000.00 requirement,
    but the claim requires the board to look at the years
    1985 through 1988 as a whole because they are
    inextricably connected, since the base year is the
    foundation for a continuing inaccuracy in plaintiff's
    reimbursements from Medicare. Plaintiff easily meets
    the $10,000.00 jurisdictional amount as defined in 42
    C.F.R. Section 405.1839(a)(2) for the years l986, 1987
    and 1988, for which the TEFRA rate of increase limits
    are determined by the 1985 cost report. It is
    unreasonable and inefficient to require plaintiff to
    file annually for an exception to the TEFRA limits when
    a recalculation of the base year cost report, if proven
    to be inaccurate, would obviate the problem.
    App. at 71-72.   The district court accepted the magistrate
    judge's recommendation.
    On appeal, a divided panel of our court reversed and
    held that SFMC had not satisfied the $10,000 amount-in-
    controversy requirement.    Noting that "[t]he ``amount in
    controversy' is defined by [42 U.S.C. § 1395oo(a)(1)(A)(i)] as
    ``the amount of total program reimbursement due to the provider
    for the items and services furnished to individuals for which
    payment may be made . . . for the period covered by such
    report,'" the panel held that a single provider may not
    "aggregate claims over several cost reports in order to satisfy
    the amount in controversy requirement of § 1395oo(a)."     St.
    Francis 
    I, 962 F.2d at 1114
    , 1115 (emphasis supplied in St.
    Francis I).    However, in response to SFMC's argument that the
    district court had jurisdiction under 28 U.S.C. § 1331, the panel
    remanded the case to the district court so that SFMC could
    petition for leave to amend its complaint to assert jurisdiction
    under that 
    provision. 962 F.2d at 1117
    .   In doing so, however,
    the panel made clear that it was not deciding whether SFMC's
    claims could "properly be asserted under this jurisdictional
    provision."    
    Id. at 1117
    n.10.
    On remand, SFMC was granted leave to file an amended
    two-count complaint that asserted jurisdiction under 28 U.S.C. §
    1331.   Count I of the amended complaint alleged:
    The methodology, or lack of methodology, utilized by
    HCFA to deny to St. Francis Medical Center a base year
    adjustment (to achieve comparability between cost
    reporting periods) has resulted in HCFA's imposition of
    improper and unreasonable reimbursement ceilings (TEFRA
    Ceilings) upon the Medical Center's rehabilitation
    unit.
    App. at 212.   Count II alleged that SFMC's equal protection
    rights had been violated because it had been treated differently
    from providers "whose post-base year costs for post-base year
    cost reporting periods . . . are undistorted."    
    Id. at 213.
    Counts I and II of the amended complaint sought essentially the
    same relief as SFMC's prior complaint.    
    Id. at 213-15.
    The defendants moved to dismiss, and the magistrate
    judge recommended that the motion be granted on the ground that
    42 U.S.C. § 405(h) precluded the exercise of jurisdiction under
    28 U.S.C. § 1331.    The district court agreed and dismissed the
    amended complaint.    This appeal followed.
    II.
    Under the Medicare Act, 42 U.S.C. § 1395oo(f)(1), a
    provider has "the right to obtain judicial review of any final
    decision" of the PRRB by means of a civil action filed in
    district court.    In St. Francis I, however, our court held that
    SFMC could not obtain judicial review under this provision
    because it had not satisfied the $10,000 amount-in-controversy
    requirement of 42 U.S.C. § 1395oo(a).    SFMC thus turned to 28
    U.S.C. § 1331 as an alternative avenue for obtaining review, but
    SFMC's reliance on this provision raises other jurisdictional
    problems.
    The Medicare Act, 42 U.S.C. § 1395ii, incorporates 42
    U.S.C. § 405(b), which provides in relevant part:
    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) (emphasis added).     Therefore, if SFMC's
    amended complaint seeks "to recover on [a] claim arising under
    [the Medicare Act]," this provision deprives the district court
    of jurisdiction under 28 U.S.C. § 1331.
    As the District of Columbia Circuit has noted,
    resolution of this jurisdictional issue requires us to consider
    two lines of Supreme Court precedent:     the "Salfi-Ringer line"
    and the "Erika-Michigan Academy line."    See National Kidney
    Patients Ass'n v. Sullivan, 
    958 F.2d 1127
    , 1130 (D.C. Cir. 1992),
    cert. denied, 
    113 S. Ct. 966
    (1993).    We will consider each of
    these lines separately.
    A.   If the "Salfi-Ringer line" controls, the decision
    of the district court dismissing SFMC's complaint was clearly
    correct.   In Weinberger v. Salfi, 
    422 U.S. 749
    (1975), the Court
    considered an action brought on behalf of a class of persons who
    had been denied Social Security benefits pursuant to a provision
    of the Social Security Act that permitted a widow or stepchild to
    obtain benefits only if that claimant had become the wife or
    stepchild of the deceased at least nine months before his death.
    A three-judge court held that this statutory requirement was
    unconstitutional, but the Supreme Court concluded that 42 U.S.C.
    § 405(h) deprived the lower court of jurisdiction to entertain
    the suit under 28 U.S.C. § 1331.   The Court rejected the
    proposition that section 405(h) merely requires exhaustion of
    administrative remedies (422 U.S. at 757), as well as the
    argument that the plaintiffs' claims arose under the Constitution
    rather than the Social Security Act.    
    Id. at 760.
      The Court
    wrote:
    It would, of course, be fruitless to contend that
    appellees' claim is one which does not arise under the
    Constitution, since their constitutional arguments are
    critical to their complaint. But it is just as
    fruitless to argue that this action does not also arise
    under the Social Security Act. For not only is it
    Social Security benefits which appellees seek to
    recover, but it is the Social Security Act which
    provides both the standing and the substantive basis
    for the presentation of their constitutional
    contentions. Appellees sought, and the District Court
    granted, a judgment directing the Secretary to pay
    Social Security benefits. To contend that such an
    action does not arise under the Act whose benefits are
    sought is to ignore both the language and the substance
    of the complaint and judgment. This being so, the
    third sentence of § 405(h) precludes resort to federal-
    question jurisdiction for the adjudication of
    appellees' constitutional contentions.
    
    Id. at 760-61.
       The Court thus held that individuals wishing to
    challenge the duration-of-relationship requirement were required
    to proceed under 42 U.S.C. § 405(g) rather than under 28 U.S.C. §
    1331.    
    See 422 U.S. at 763-67
    .
    In Heckler v. Ringer, 
    466 U.S. 602
    (1984), the
    plaintiffs were individuals who wanted Medicare to pay Part A
    benefits4 for a surgical procedure known as bilateral carotid
    4
    .   As we recently explained:
    Medicare coverage is primarily divided into two
    parts. Part A covers all inpatient hospital expenses
    through an insurance plan. See 42 U.S.C. §§ 1395c to
    body resection (BCBR).   The Secretary through the HCFA adopted a
    policy that "no payment [was] to be made for Medicare claims
    arising out of the BCBR surgical procedure when performed to
    relieve respiratory distress."    
    Id. at 607;
    see also 
    id. at 608.
    Asserting jurisdiction based in part on 28 U.S.C. § 1331, the
    plaintiffs filed suit, contending that the Secretary's policy
    violated "constitutional due process and numerous statutory
    
    provisions." 466 U.S. at 610
    .   The Supreme Court held, however,
    that jurisdiction under 28 U.S.C. § 1331 was not available, and
    the Court specifically rejected the distinction that the court of
    appeals had drawn between substantive and procedural 
    claims. 466 U.S. at 614-15
    .   "[T]o be true to the language of the statute,"
    (..continued)
    1395i-4. All Medicare-eligible patients receive this
    benefit. . . .
    Part B covers certain physician services, hospital
    outpatient services, and other health services not
    covered under Part A. See 42 U.S.C. §§ 1395j to 1395w-
    4(j). Part B coverage is not freely or automatically
    available to all Medicare-eligible patients. To obtain
    this coverage, Medicare-eligible patients must first
    enroll in the Part B insurance program by paying
    insurance premiums ("Part B insurance premiums"). See
    §§ 1395o-1395s. Once this is done, the federal
    government pays 80% of the "reasonable costs" of
    outpatient hospital services and 80% of the "reasonable
    charges" for physician services rendered to the
    insured. §13051. The Part B patients themselves must
    pay the remaining 20% of the charges for the reasonable
    outpatient hospital services and physician services
    (co-payments or coinsurance), as well as an annual
    deductible. Id.; § 1395cc(a)(2)(A).
    Pennsylvania Medical Soc'y v. Snider, No. 93-7775 (3d Cir. July
    22, 1994), slip op. at 4.
    the Court wrote, "the inquiry in determining whether § 405(h)
    bars federal-question jurisdiction must be whether the claim
    ``arises under' the Act, not whether it lends itself to a
    ``substantive' rather than a ``procedural' 
    label." 466 U.S. at 615
    .
    Turning to the case at hand, the Court concluded that
    the plaintiffs' "challenge to the Secretary's BCBR payment policy
    ``[arose] under' the Medicare Act."   
    Id. at 615
    (brackets added).
    The Court found it inconsequential that the plaintiffs "sought
    only declaratory and injunctive relief and not an actual award of
    benefits as well" because "[f]ollowing the declaration which
    respondents seek from the Secretary -- that BCBR surgery is a
    covered service -- only essentially ministerial details will
    remain before respondents would receive reimbursement."    
    Id. Instead of
    invoking 28 U.S.C. § 1331 or the mandamus statute, the
    Court held, claimants wishing to challenge the Secretary's BCBR
    policy were required to proceed under 42 U.S.C. § 
    405(g). 466 U.S. at 617
    .
    If Salfi and Ringer are controlling in this case, there
    can be little doubt that the district court lacked general
    federal-question jurisdiction.   The Medicare Act provides "both
    the standing and substantive basis" for SFMC's claims.    
    Salfi, 422 U.S. at 761
    .   Moreover, SFMC "sought . . . a judgment
    directing the Secretary to pay [Medicare] benefits."     
    Id. Accordingly, under
    these precedents, SFMC's claim "arises under"
    the Medicare Act for purposes of section 405(h).     See 
    Ringer, 466 U.S. at 615
    ; 
    Salfi, 422 U.S. at 760-61
    ; In re Univ. Medical Ctr.,
    
    973 F.2d 1065
    , 1073 (3d Cir. 1992); Abington Memorial Hosp. v.
    Heckler, 
    750 F.2d 242
    , 244 (3d Cir. 1984), cert. denied, 
    474 U.S. 863
    (1985).     Under these precedents, it makes no difference that
    SFMC asserted constitutional and procedural claims.      See 
    Ringer, 466 U.S. at 615
    ; 
    Salfi, 422 U.S. at 761
    .
    B.   SFMC makes little attempt to distinguish Salfi or
    Ringer.   Instead, SFMC relies on the Supreme Court's later
    decision in Bowen v. Michigan Academy of Family Physicians, 
    476 U.S. 667
    (1986), which concerned a regulation governing payments
    under Part B of the Medicare program.    This regulation permitted
    carriers to establish separate prevailing charges for specialists
    and nonspecialists performing the same services.     An association
    of physicians and several individual doctors challenged the
    regulation on constitutional and statutory grounds, but the
    Secretary contended that "Congress ha[d] forbidden judicial
    review of all questions affecting the amount of benefits payable
    under Part B of the Medicare program."     
    Id. at 669.
      In making
    this argument, the Secretary relied on United States v. Erika,
    Inc., 
    456 U.S. 201
    (1982), in which the Court had held that the
    Medicare Act precluded any judicial review of a carrier's
    decision concerning the amount awarded on a Part B claim.      The
    Secretary also argued that 42 U.S.C. § 405(h) bolstered this
    conclusion.
    The Supreme Court, however, disagreed.   Beginning with
    "the strong presumption that Congress intends judicial review of
    administrative action" (476 U.S. at 670), the Court held that
    neither the Medicare Act nor 42 U.S.C. § 405(h) demonstrated with
    the requisite clarity that Congress intended to preclude all
    judicial review of "any action taken under Part B of the Medicare
    
    program." 476 U.S. at 673
    .   The Court held that the portion of
    the Medicare Act governing review of Part B determinations, as
    interpreted in Erika, "simply does not speak to challenges
    mounted against the method by which such amounts are to be
    determined rather than the determinations themselves."     
    Id. at 675
    (emphasis in original).     The Court then concluded that,
    whereas a carrier's decision concerning the amount of a Part B
    claim was not subject to any form of judicial review, those Part
    B matters that a carrier cannot decide -- "including challenges
    to the validity of the Secretary's instructions and regulations"
    -- are not insulated from review under the Medicare Act.     
    Id. at 678.
    As for 42 U.S.C. § 405(h), the Court wrote that it
    would not "indulge the Government's assumption that Congress
    contemplated review by carriers of ``trivial' monetary claims
    . . . but intended no review at all of substantial statutory and
    constitutional challenges to the Secretary's administration of
    Part B of the Medicare 
    program." 476 U.S. at 680
    (footnote
    omitted).    The Court found insufficient evidence to show that
    Congress meant to take this "extreme position."    
    Id. In subsequent
    cases involving Part B of the Medicare
    program, we explained that "Erika and Michigan Academy define the
    ends of a continuum."    American Ambulance Serv. v. Sullivan, 
    911 F.2d 901
    , 905 (3d Cir. 1990); see also Medical Fund-Phila.
    Geriatric Ctr. v. Heckler, 
    804 F.2d 33
    , 38 (3d Cir. 1986).      We
    elaborated:
    At one end are disputes over amount computations at
    issue in a particular case. At the other are disputes
    arising from the Secretary's rules, regulations and
    instructions which are applied by the Hearing Officer.
    A Hearing Officer is not at liberty to disregard these
    rules. . . . "[M]atters which Congress did not delegate
    to private carriers, such as challenges to the validity
    of the Secretary's instructions and regulations, are
    cognizable in courts of law." Michigan 
    Academy, 476 U.S. at 680
    , 106 S. Ct. at 2140-41 (emphasis in
    original).
    American Ambulance 
    Serv., 911 F.2d at 905
    .
    Contrary to SFMC's argument, we do not believe that
    Michigan Academy supports its reliance on general federal-
    question jurisdiction in this case.   Michigan Academy concerned
    the availability of general federal-question jurisdiction to
    review the validity of a Part B regulation.    Under Part B, a
    carrier cannot review the legality of such a regulation (see
    Michigan 
    Academy, 476 U.S. at 675-76
    , 680) and, as Erika held, a
    carrier's determination of the amount of a Part B payment is not
    reviewable.    Thus, if general federal-question jurisdiction had
    not been available in Michigan Academy, the plaintiffs in that
    case would have had no avenue for challenging the validity of the
    regulation under which their payments were calculated.
    By contrast, the Medicare Act provides avenues by which
    a provider seeking Part A payments may contest both the amount of
    its payments and the methods by which those payments are
    calculated.   If the provider seeks review of a reimbursement
    determination and does not wish to challenge a provision of the
    Act or regulations, it may, upon compliance with the
    jurisdictional requirements imposed by statute, take an appeal to
    the PRRB (see 42 U.S.C. § 1395oo(f)(1)).   Alternatively, if the
    provider wishes to challenge a provision of the Act or a
    regulation, it may seek a determination by the PRRB that the
    Board lacks the authority to decide the question (see 42 U.S.C. §
    1395oo(f)(1)) and then obtain judicial review.   See Good
    Samaritan Hosp. v. Shalala, 
    113 S. Ct. 2151
    , 2156 (1993);
    Bethesda Hosp. Ass'n v. Bowen, 
    485 U.S. 399
    , 401-02 (1988).
    Since a provider seeking Part A payments has these
    avenues of review available under the Medicare Act, the
    presumption that Congress did not intend to foreclose judicial
    review, which was central to the decision in Michigan Academy, is
    inapplicable.   And in the absence of that presumption, we read 42
    U.S.C. § 405(h), as incorporated into the Medicare Act and as
    interpreted in Salfi and Ringer, to mean that SFMC may not assert
    its claim under 28 U.S.C. § 1331.
    In Westchester Management Corp. v. United States HHS,
    
    948 F.2d 279
    (6th Cir. 1991), cert. denied, 
    112 S. Ct. 1936
    (1992), the Sixth Circuit considered a case quite similar to the
    one before us.   Noting that 42 U.S.C. § 1395oo(f)(1) provided "an
    avenue of judicial review for the type of challenge that [the
    provider] assert[ed]," the court stated that "the Michigan
    Academy exception applies only when there is no other avenue of
    judicial 
    review." 948 F.2d at 282
    . The court continued:
    Congress has expressly provided for judicial review
    of the type of claim that Westchester Management
    asserts, when the claim exceeds the $10,000 amount-in-
    controversy requirement. Congress created a special
    procedure by which a provider that, unlike Westchester
    Management, is entitled to a Board hearing may demand
    that the Board determine whether it has authority to
    pass on a relevant legal question, such as the validity
    of an instruction of the Secretary. If it determines
    that it lacks authority, the provider may proceed
    directly to court for judicial review of its legal
    challenge. See 42 U.S.C. § 1395oo(f)(1). If we were
    to accept Westchester Management's construction of
    Michigan Academy -- that there is always jurisdiction
    under 28 U.S.C. §§ 1331 and 1346 for challenges to
    instructions, rules, and regulations, but not for
    amount determinations -- this special procedure,
    created by 42 U.S.C. § 1395oo(f)(1), would become
    superfluous.
    The better construction requires that Westchester
    Management pursue the exclusive jurisdictional grant
    within the Medicare Act. Its claim that it has no
    avenue of judicial review is meritless; 42 U.S.C. §
    1395oo(f)(1) provides an avenue of judicial review for
    the sort of challenge to the validity of the
    Secretary's instructions that it raises. Westchester
    Management is, however, denied access to that avenue
    because it is unable to meet the amount-in-controversy
    requirement. There is no contention that Congress
    lacks the power to limit jurisdiction by prescribing
    minimum amount-in-controversy requirements.
    
    Id. at 282-83;
    see also Colonial Penn Ins. Co. v. Heckler, 
    721 F.2d 431
    , 436 (3d Cir. 1983); Frankford Hosp. v. Davis, 647 F.
    Supp. 1443, 1446-47 (E.D. Pa. 1986); Mount Sinai Medical Ctr. v.
    Sullivan, Medicare & Medicaid Guide (CCH) ¶ 39,103 (D.D.C. Nov.
    30, 1990).    We find this analysis persuasive.
    We note, moreover, that administrative remedies are now
    available for providers who believe that their base period
    operating costs are too low.    Beginning in 1990, a provider may
    request a new base period.     See 42 U.S.C. §§ 1395ww(b)(4)(A)-(B)
    (Supp. 1993); 42 C.F.R. § 413.40(i).    As previously noted (see
    pages 
    4-5, supra
    ), a provider may also request a permanent base-
    period cost adjustment under 42 C.F.R. § 413.40(g).     A denial of
    either of these requests may be appealed to the PRRB and is
    thereafter subject to judicial review under 42 U.S.C. §
    1395oo(f)(1).
    SFMC contends that these procedures are inadequate in
    its case.    SFMC correctly notes that the granting of a new base
    period beginning in 1990 pursuant to 42 C.F.R. § 413.40(i) would
    not permit it to recover the bonus payments that it believes it
    should have received prior to that date.    As for a permanent
    base-period cost adjustment, SFMC argues that the Secretary has
    only recently recognized the availability of such relief.
    Indeed, SFMC charges that the Secretary previously took the
    position that no such relief was available and that the
    Secretary's current interpretation of the relevant regulations is
    simply a "convenient litigating position."    The Secretary
    disputes these charges.    But whether or not SFMC's charges are
    justified, we do not think they have a bearing on the
    availability of jurisdiction under 28 U.S.C. § 1331, for "Subject
    matter jurisdiction can never be created by estoppel."   Rubin v.
    Buckman, 
    727 F.2d 71
    , 72 (3d Cir. 1984); see Insurance Corp. of
    Ireland v. Compagnie des Bauxites de Guinee, 
    456 U.S. 694
    , 702
    (1982).
    SFMC also argues that, even now, while the Secretary
    acknowledges that a permanent base-period adjustment would apply
    in determining a provider's entitlement to TEFRA bonus payments
    in future years, the Secretary takes the position that such an
    adjustment would not apply in determining a provider's
    entitlement to bonus payments in the year in which permanent
    adjustment is granted.    In other words, SFMC contends that the
    administrative procedure may cause a provider to lose a year of
    incentive payments.
    This argument does not persuade us that such a provider
    must be permitted to sue to recover these bonus payments under 28
    U.S.C. § 1331.   If such a provider has a substantive entitlement
    to these bonus payments under the Medicare Act, it is by no means
    clear to us that the provider could not obtain those payments in
    an action under 42 U.S.C. § 1395oo(f)(1), irrespective of the
    regulations or the Secretary's interpretation of them.    On the
    other hand, if such a provider has no such entitlement, then
    obviously the Secretary's position causes the provider no harm.
    But in any event, even if the Secretary's position may by some
    means cause the provider to lose a year of bonus payments, that
    possibility is insufficient to persuade us that jurisdiction
    under 28 U.S.C. § 1331 must be recognized.
    We have considered all of SFMC's remaining arguments,
    and we find them to lack merit.   Accordingly, we will affirm the
    decision of the district court dismissing SFMC's complaint.