Oakland Med v. HHS

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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$SSHOODQWV responsibility for insuring the safety and care of elderly and
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benefits awarded in a post-deprivation hearing. 0DWWKHZVY WHVWLQJFHUWLILFDWHXQGHUWKH$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
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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.
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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
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(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))
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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.
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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