Karen Tucker v. Secretary US Department of Hea

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
____________
No. 11-3350
____________
KAREN E. TUCKER,
Appellant,
v.
SECRETARY OF
HEALTH AND HUMAN SERVICES
__________________________________
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civ. No. 07-cv-02230)
District Judge: Honorable Robert B. Kugler
__________________________________
Submitted Pursuant to Third Circuit LAR 34.1(a)
April 13, 2012
Before: JORDAN, HARDIMAN and ROTH, Circuit Judges
(Opinion filed May 16, 2012)
____________
OPINION
____________
PER CURIAM
Appellant Dr. Karen Tucker appeals from an order of the District Court dismissing
her complaint pursuant to Federal Rule of Civil Procedure 12(b)(1). For the following
reasons, we will affirm.
Dr. Tucker, a podiatrist, and others who were reimbursed for their services to
Medicare beneficiaries under Part B, were the focus of an investigation into potential
health care fraud in Texas.1 Dr. Tucker‟s Medicare payments were suspended, 42 C.F.R.
§ 405.371, on October 23, 1997, and she eventually was indicted on numerous charges
relating to Medicare fraud. On December 18, 1998, Dr. Tucker pleaded guilty to one
count of Medicare fraud, in violation of 18 U.S.C. § 1347, in the United States District
Court for the Northern District of Texas.2 On March 5, 1999, she was sentenced to six
months of home confinement, three years of probation, and she was required to pay
$26,402 in restitution to the United States. See Tucker v. United States, 2001 WL
1613796 (N.D. Tex. December 13, 2001) (denying section 2255 motion to vacate
sentence).
Meanwhile, in December, 1997 and January, 1998, Dr. Tucker received letters
from several Medicare hearing officers, indicating that they had not received certain
required documentation from her (identification of specific claims she wished to appeal,
billed charges and correct codes, dates of service, and legible medical records), and
therefore her appeals relating to claims for services rendered between 1996 and 1998
were being dismissed. Dr. Tucker was given six months to rectify the documentation
problem and reopen her appeals.
1
Medicare is governed by Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-
1395ggg. Part B benefits are supplemental medical insurance benefits available to
beneficiaries who enroll and pay additional premiums.
2
Specifically, Dr. Tucker pleaded guilty to providing podiatry services to one patient
without obtaining a specific recommendation and approval for the services from the
attending physician.
2
Following her sentencing in March, 1999, Dr. Tucker began the process of
attempting to get paid amounts she believed she was owed by Medicare. Her efforts
continued without success for some time. The parties are familiar with these efforts and
we thus will not discuss them in detail here. Importantly, in 2003, counsel for Dr. Tucker
sent letters to the Center for Medicare & Medicaid Services (“CMS”), Region VI,
requesting that CMS assist Dr. Tucker in securing payment for outstanding claims from
TrailBlazer Health Enterprises, LLC (“TrailBlazer”), a Medicare Part B carrier.3
Eventually, CMS staff received three computer disks with claims information. Due to the
large number of claims involved, CMS asked TrailBlazer to randomly select a claim for
review from each of the eighteen facilities listed in the submitted information. The
review was not favorable to Dr. Tucker. It indicated that many claims had been
disallowed for lack of medical necessity, with first level appeals affirming the denials,
and that other claims were disallowed for lack of medical necessity, invalid procedure
codes, and invalid dates of service.
CMS concluded that TrailBlazer had processed and adjudicated the claims
correctly and in accordance with Medicare regulations. CMS also concluded that Dr.
Tucker had been provided with appeal rights, and that, since the claims were processed
for payment in 1996 through 1998, the time for appealing the claim determinations had
expired. TrailBlazer records further indicated that all cases submitted for appeals by Dr.
Tucker had been adjudicated and closed through the Fair Hearing Department. In 2006,
CMS reiterated that Dr. Tucker‟s appeals were dismissed because she did not provide
3
CMS is responsible for administering Medicare. CMS contracted with TrailBlazer to
determine whether claimed services were medically necessary, to calculate the amount of
any Part B payments due, and to pay claims out of the Medicare Trust fund.
3
certain requested documentation within the time allowed. CMS noted that TrailBlazer, in
reaching its conclusion about the missing documentation, had selected a sample of one
appeal from each hearing officer involved in Dr. Tucker‟s appeals, consisting of a total of
forty beneficiaries. A CMS official wrote to Dr. Tucker and advised her that the
dismissal of her appeals was final, and constituted the final decision of the Secretary.
In May, 2007, Dr. Tucker filed a civil complaint pro se, with numerous exhibits
attached, in the United States District Court for the District of New Jersey, requesting
payment of certain outstanding claims. The Secretary of the United States Department of
Health & Human Services moved to dismiss the complaint for lack of subject matter
jurisdiction under Federal Rule of Civil Procedure 12(b)(1). The Secretary argued that
jurisdiction was lacking because Dr. Tucker never submitted timely requests for payment
on some of her claims, and because she did not timely prosecute the vast majority of her
claims through the entirety of the administrative appeals process. In opposition to the
motion to dismiss, Dr. Tucker argued that she was prevented from submitting claims and
appellate documentation to Medicare by a United States Magistrate‟s pretrial release
order, issued on March 24, 1998, which made her subject to the condition that she not
engage in the practice of podiatry, and that she avoid all contact with anyone who might
be a witness in her case, including any health care providers, doctors, nursing homes,
Medicare personnel, and patients.
The District Court granted the Secretary‟s motion and dismissed Dr. Tucker‟s
complaint. She then sought reconsideration of that order. In an order entered on July 25,
2011, the District Court denied the motion for reconsideration. Dr. Tucker appeals pro
4
se, and has moved pursuant to Federal Rule of Appellate Procedure 10(e) to expand the
record.
We will affirm. We have jurisdiction to review the District Court‟s final order
pursuant to 28 U.S.C. § 1291. We review de novo the District Court‟s dismissal under
Rule 12(b)(1) for lack of subject matter jurisdiction. See Metropolitan Life Ins. Co. v.
Price, 501 F.3d 271, 275 (3d Cir. 2007). The District Court‟s determination of facts with
respect to jurisdiction is reviewed for clear error. See Washington v. Hovensa LLC, 652
F.3d 340, 341-42 (3d Cir. 2011). Where a motion constitutes a factual (as distinct from a
facial) attack on the existence of subject matter jurisdiction, no presumption of
truthfulness attaches to the plaintiff‟s allegations. Mortensen v. First Federal Sav. &
Loan Ass‟n, 549 F.2d 884, 891 (3d Cir. 1977). If the factual record is adequate, the
District Court may weigh the evidence presented by the parties to determine if subject
matter jurisdiction exists. See Gould Electronics Inc. v. United States, 220 F.3d 169, 177
(3d Cir. 2000).
A district court has jurisdiction over an appeal taken from a final, reviewable
decision of the Secretary made after a hearing in a Medicare case. 42 U.S.C. § 405(g); 42
U.S.C. § 1395ff(b)(1). Without that final, reviewable decision, there is no subject matter
jurisdiction in the district courts. See Fitzgerald v. Apfel, 148 F.3d 232, 234 (3d
Cir.1998) (citing Mathews v. Eldridge, 424 U.S. 319, 328 (1976)). The final, reviewable
decision requirement “consists of two elements, only one of which is purely
„jurisdictional‟ in the sense that it cannot be „waived‟ by the Secretary in a particular
case. The waivable element is the requirement that the administrative remedies
prescribed by the Secretary be exhausted. The nonwaivable element is the requirement
5
that a claim for benefits shall have been presented to the Secretary.” Matthews, 424 U.S.
at 328.
The District Court concluded that Dr. Tucker arguably satisfied the jurisdictional
“presentment” requirement. The court reasoned that the Secretary had asserted that
roughly 7000 of Dr. Tucker‟s claims were submitted for payment, denied, appealed to the
carrier hearing level, and dismissed for abandonment pursuant to 42 C.F.R. § 405.832(b).
The court further reasoned that the remainder of Dr. Tucker‟s claims were not submitted
to Medicare before Dr. Tucker‟s criminal prosecution, but they appeared to have been
presented to the Secretary in the manner requested by CMS following Dr. Tucker‟s
sentencing. Accordingly, the presentment requirement appeared to be satisfied.4
Nevertheless, the District Court further concluded that it was beyond dispute that
Dr. Tucker did not completely exhaust her administrative remedies because she did not
timely prosecute her claims through the entirety of the administrative appeals process or
timely file certain of her claims. We agree with the District Court that Dr. Tucker did not
properly exhaust her administrative remedies. The administrative review process of
unfavorable decisions by Medicare Part B carriers provides that the carrier make an
initial determination when a request for payment is submitted. 42 C.F.R. § 405.801(a).
A dissatisfied claimant may then request a carrier-level review of the claim. See id. If
unsatisfied with the result, the claimant may request a carrier hearing, see id., also known
as a fair hearing. Following the fair hearing, further review is available by way of a
4
In the margin of his brief, the Secretary has noted a basis for disagreeing with the
District Court‟s presentment determination, see Appellee‟s Brief, at 41 n.11, but, in the
main, the Secretary does not argue that Dr. Tucker did not meet the non-waivable
presentment requirement for exhaustion.
6
hearing before an Administrative Law Judge. See id. After that, a dissatisfied claimant
may request review by the Departmental Appeals Board. See id. The regulations
envision an appeal to a federal district court only after this process is completed. See id.
The record establishes that Dr. Tucker did not pursue any of the claims at issue in
her complaint to completion. She appealed to the District Court from the dismissal of her
appeals by the hearing officers for abandonment.5 A fair hearing dismissal is not a final
order from which a claimant may appeal under section 405(g). See Bacon v. Sullivan,
969 F.2d 1517, 1520-21 (3d Cir. 1992) (decision of Appeals Council not to consider
claimant‟s untimely request for review was not a reviewable, final decision of the
Secretary); Long Island Ambulance, Inc. v. Thompson, 220 F. Supp. 2d 150, 164
(E.D.N.Y. 2002) (Medicare plaintiff failed to exhaust administrative remedies when it
withdrew its appeal before the ALJ). See also Brandyburg v. Sullivan, 959 F.2d 555, 560
(5th Cir. 1992) (ALJ‟s dismissal of disability claimant‟s appeal after claimant failed to
appear at hearing not final, reviewable decision). In addition, to the extent that Dr.
Tucker first presented certain claims post-sentencing for services rendered prior to her
criminal prosecution, the claims were untimely filed. 42 C.F.R. § 424.44 (effective to
12/31/08).
As explained by the District Court, if the Secretary declines to waive exhaustion as
the Secretary did here, the court itself may waive the requirement in appropriate
circumstances. Constitutional, certain statutory, and collateral issues may provide a basis
5
We note that, in another of Dr. Tucker‟s cases, she properly completed the
administrative review process by appealing to an ALJ and the Medicare Appeals Council,
a component of the Departmental Appeals Board. See Tucker v. Thompson, 2006 WL
39644, *2 (D.N.J. January 9, 2006).
7
for a court to waive the exhaustion requirement in cases brought pursuant to section
405(g). See Bacon, 969 F.2d at 1521 (court would waive exhaustion if claimant
presented colorable constitutional argument); Rankin v. Heckler, 761 F.2d 936, 940 (3d
Cir. 1985) (same, where claimant raised statutory issues upon which Secretary had taken
final position). See also Bowen v. City of New York, 476 U.S. 467, 483 (1986) (if
plaintiff‟s claim is collateral to her claim for benefits, exhaustion may be waived). “In
those cases, the requirement of exhaustion does not serve any underlying policy, because
in the former case the federal court is more qualified to address constitutional questions
than the agency and in the latter case further appeals are futile in light of the final
position already taken.” Rankin, 761 F.2d at 941.
Here, the District Court properly declined to waive exhaustion. Dr. Tucker raised
no constitutional issues or issues that were collateral to her claims for payment. Instead,
she argued that the Government created an impediment to exhaustion, and she thus
should not be penalized for failing to submit the necessary documentation to Medicare.
Specifically, she argued that requiring her to exhaust her administrative remedies would
have potentially subjected her to further superseding indictments and perhaps the loss of
freedom.6 She also argued that she could not submit the proper documentation because
the Government seized her records pursuant to a warrant on May 6, 1996, and did not
return them until August, 1999.
6
During the period of her original release, Dr. Tucker contacted certain physicians,
seeking to document that she had in fact been authorized by them to provide podiatric
care for their patients. Ten of these physicians informed the Government of the contact,
and, as a result, the Government issued a superseding indictment charging Dr. Tucker
with obstruction of justice.
8
The District Court was not persuaded by these arguments and neither are we. Dr.
Tucker‟s fair hearing appeals were dismissed for abandonment in December, 1997, and in
January, 1998 because she failed to adequately document her claims. A hearing officer
may, for good cause shown, vacate any dismissal for abandonment within six months of
the dismissal. 42 C.F.R. § 405.832(e). Dr. Tucker was informed that the dismissals
could be vacated if she submitted the required documentation within six months of the
dismissals. There is no evidence that she ever did so. The Magistrate Judge‟s release
order was not issued until March 24, 1998, several months after the dismissals.
Moreover, at a hearing on May 13, 1998 before the Chief Judge of the Northern District
of Texas, both the Government and Dr. Tucker indicated their understanding that the
Magistrate Judge‟s release order did not prevent Dr. Tucker from submitting claims or
the requested documentation. Accordingly, there was only a six-week period from March
24, 1998 until May 13, 1998, when it may have reasonably seemed to Dr. Tucker that
prosecuting her claims would place her in contempt of court. Dr. Tucker also had
substantial other opportunities to submit the appropriate documentation, including
initially, when she first presented her claim for payment, and then later upon learning of
the hearing officers‟ initial requests for more information. Dr. Tucker did not take
advantage of these other substantial opportunities and thus judicial waiver of the
exhaustion requirement in her case would not have been proper.
The District Court further concluded that the record flatly contradicted Dr.
Tucker‟s other argument that she could not submit the proper documentation because the
Government seized her records pursuant to a warrant on May 6, 1996. We have carefully
reviewed the record, and we conclude that the District Court did not clearly err in relying
9
on Dr. Tucker‟s own statements and the testimony of her billing agent at a hearing on
April, 29, 1998 in finding that Dr. Tucker had the required documentation at her disposal,
notwithstanding the seizure. See Washington, 652 F.3d at 341-42 (District Court‟s
determination of facts with respect to jurisdiction reviewed for clear error); Mortensen,
549 F.2d at 891 (in factual attack no presumption of truthfulness attaches to plaintiff‟s
allegations).
In sum, the District Court properly concluded that a fair hearing dismissal on the
grounds of abandonment is not a final, reviewable order under section 405(g), see Bacon,
969 F.2d at 1520-21; Long Island Ambulance, 220 F. Supp.2d at 164,7 and that Dr.
Tucker could have exhausted her administrative remedies in a timely manner. Waiver of
exhaustion was not warranted in Dr. Tucker‟s case. The District Court lacked
jurisdiction over Dr. Tucker‟s complaint, and properly dismissed it and her motion for
reconsideration, which did nothing to cure the jurisdictional defect.
For the foregoing reasons, we will affirm the orders of the District Court
dismissing the complaint for lack of subject-matter jurisdiction and denying the motion
for reconsideration. Appellant‟s motion to expand the record, Fed. R. App. Pro. 10(e), is
denied because, in effect, it is nothing more than a motion to supplement the record.
Appellant had ample opportunity in the proceedings below to present documents.
7
This is so notwithstanding CMS‟s letter indicating that dismissal of Dr. Tucker‟s
appeals constituted the final decision of the Secretary. The letter does not establish that
the decision of the Secretary was a final, reviewable decision in the legal sense. Counsel
for CMS later clarified for Dr. Tucker that she had failed to timely exhaust her
administrative remedies and thus there was no opportunity for review in a federal court.
10