Arturo Porzecanski v. Alex Azar

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 5, 2019 Decided November 26, 2019
No. 18-5222
ARTURO C. PORZECANSKI,
APPELLANT
v.
ALEX MICHAEL AZAR, II, SECRETARY, UNITED STATES
DEPARTMENT OF HEALTH AND HUMAN SERVICES,
APPELLEE
Appeal from the United States District Court
for the District of Columbia
(No. 1:16-cv-02064)
Caroline L. Wolverton argued the cause for appellant.
With her on the briefs was Christopher L. Keough.
Jaynie Lilley, Attorney, U.S. Department of Justice,
argued the cause for appellee. With her on the brief was Alisa
B. Klein, Attorney. R. Craig Lawrence, Assistant U.S.
Attorney, entered an appearance.
Before: HENDERSON and KATSAS, Circuit Judges, and
SENTELLE, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge HENDERSON.
2
KAREN LECRAFT HENDERSON, Circuit Judge: Judicial
review of claims arising under the Medicare Act is carefully
circumscribed. A plaintiff must first present his claims to the
Secretary of the United States Department of Health and
Human Services (HHS) and exhaust administrative remedies,
unless doing so would foreclose access to federal court. In
this appeal we consider whether, after properly channeling a
single claim for “medical and other health services” benefits,
a Medicare beneficiary can obtain prospective equitable relief
mandating that HHS recognize his treatment as a covered
Medicare benefit in all future claim determinations. The
district court concluded it could not issue such relief. For the
reasons that follow, we affirm.
I. BACKGROUND
A
Medicare is a federally funded health insurance program
that serves qualified elderly and disabled individuals. See
Social Security Amendments of 1965 (Medicare Act), Pub. L.
No. 89-97, 79 Stat. 286 (1965) (codified as amended at 42
U.S.C. §§ 1395 et seq.). Medicare Part A primarily provides
inpatient hospital coverage and Part B covers outpatient
services. See 42 U.S.C. §§ 1395c, 1395j, 1395k. Eligible Part
B beneficiaries may submit claims for “medical and other
health services,” id. § 1395k(a)(2)(B), “including drugs and
biologicals . . . furnished as an incident to a physician’s
professional service,” id. § 1395x(s)(2)(A). But a drug or
biological 1 that otherwise qualifies as a “medical or other
1
Biological products, also known as biologics, “include a
wide range of products such as vaccines, blood and blood
components, allergenics, somatic cells, gene therapy, tissues, and
recombinant therapeutic proteins . . . [and] can be composed of
sugars, proteins, or nucleic acids or complex combinations of these
3
health service” will not be covered under Medicare Part B
unless it is also “reasonable and necessary for the diagnosis
or treatment of illness or injury.” Id. § 1395y(a)(1)(A)
(emphasis added). When a drug or biological is approved by
the United States Food and Drug Administration (FDA) but
administered for a use “that is not included as an indication”
on the official FDA label, the off-label use may be covered if
it is “medically accepted” as determined on a case-by-case
basis after consideration of “the major drug compendia,
authoritative medical literature and/or accepted standards of
medical practice.” Medicare Benefit Policy Manual § 50.4.2
(Rev. 1, Oct. 1, 2003)
https://www.cms.gov/Regulations-and-Guidance/Guidance/M
anuals/Downloads/bp102c15.pdf.
The individualized nature of many coverage decisions is
reflected in Medicare’s elaborate claim determination and
review regimen. To start, a Medicare Part B beneficiary must
submit a claim for an “initial determination” of whether “the
items and services furnished are covered or otherwise
reimbursable.” 42 C.F.R. § 405.920. Initial coverage
determinations are made by contractors HHS hires to manage
the preliminary claims administration process in designated
geographic areas. See 42 U.S.C. §§ 1395ff(a)(1)(C),
1395kk-1(a)(1)–(4); 42 C.F.R. §§ 405.920, 405.924(b). The
contractor can either review claims individually or act
pursuant to a “local coverage determination” (LCD). An LCD
sets forth “whether or not a particular item or service is
covered on a contractor-wide basis,” Medicare Program
Integrity Manual § 13.1.1 (Rev. 863, Feb. 12, 2019),
substances, or may be living entities such as cells and tissues.”
What Are “Biologics” Questions and Answers, U.S. FDA,
https://www.fda.gov/about-fda/center-biologics-evaluation-and-rese
arch-cber/what-are-biologics-questions-and-answers (last updated
Feb. 6, 2018).
4
https://www.cms.gov/Regulations-and-Guidance/Guidance/M
anuals/Downloads/pim83c13.pdf; see also 42 U.S.C.
§ 1395ff(f)(2)(B), and may reflect the LCD’s conclusion “that
a service is not reasonable and necessary for certain
diagnoses.” 42 C.F.R. § 400.202.
If the contractor denies the beneficiary’s claim, the
beneficiary is entitled to appeal his claim to HHS. See 42
U.S.C. § 1395ff(b)(1)(A). Initially, he must obtain a
“redetermination” from the same contractor. See id.
§ 1395ff(a)(3)(A); 42 C.F.R. § 405.940. If unsuccessful, the
beneficiary can seek “reconsideration” by a “qualified
independent contractor” who is wholly independent of the
initial determination contractor. See 42 U.S.C.
§ 1395ff(c)(1)–(2); 42 C.F.R. § 405.960. If the beneficiary
remains unsatisfied, he can request a hearing before an
administrative law judge (ALJ). See 42 C.F.R. § 405.1000.
The ALJ’s decision is binding on the parties unless reviewed
by the Medicare Appeals Council (Council). Id. § 405.1048.
If Council review is sought, the Council must either issue a
decision, dismiss the case or remand to the ALJ, ordinarily
within ninety days of receipt of the request for review. Id.
§ 405.1100(c). If it fails to do so, the beneficiary is entitled to
request that his appeal be escalated to federal court. Id.
§ 405.1132(a). Upon receipt of the request, the Council must
act within five calendar days or, alternatively, notify the
beneficiary that it is unable to issue a decision within the time
allotted. Id. § 405.1132(a)(1)–(2). The beneficiary then has
sixty days to file an action. Id. § 405.1132(b).
B
Arturo Porzecanski was diagnosed with systemic
capillary leak syndrome (SCLS) in 2005. SCLS, also known
as Clarkson’s disease, is a rare, life-threatening condition,
5
“characterized by debilitating episodes in which blood and
proteins shift from blood vessels into nearby body cavities
and muscles.” Porzecanski v. Azar, 316 F. Supp. 3d 11, 14
(D.D.C. 2018). SCLS has no known cure. Following his
diagnosis, Porzecanski began a preventive course of
theophylline and terbutaline but, within a few years, his
episodes occurred more frequently. Id. at 15.
In 2009 Porzecanski started an experimental regimen of
intravenous immune globulin (IVIG), a biological product. Id.
The FDA has approved IVIG for certain indications; IVIG for
the treatment of SCLS, however, is considered an off-label
use. Although the body of research at that time comprised
only a few published articles, anecdotal reports and
unpublished case studies, IVIG showed promising results for
controlling SCLS symptoms. The dearth of scientific testing
is unsurprising: SCLS’s deadliness and rarity render clinical
trials virtually impossible. Since starting on IVIG,
Porzecanski has been symptom-free. Id. at 16. According to
the National Institutes of Health, IVIG is now “the best
available treatment” for SCLS patients. Id. at 19 n.4.
Porzecanski’s physicians recommend that he continue his
IVIG infusion schedule—two consecutive days every four
weeks—indefinitely.
On December 16, 2014, Porzecanski underwent a round
of IVIG therapy at Georgetown University Medical Center,
for which the Medical Center billed $29,860.95. Id. at 16. He
submitted a Medicare Part B claim for the treatment. 2 The
2
Since 2009, Porzecanski’s private, employer-sponsored
health insurance has covered his IVIG infusions and continues to do
so. Porzecanski became eligible for Medicare in November 2014.
Anticipating retirement—and the resulting loss of his private
insurance—he began designating Medicare as his secondary
6
initial contractor—Novitas Solutions—denied coverage.
Novitas’ LCD then in effect did not include SCLS as an
approved indication for IVIG. Id. at 16 & n.2, 20.
As mandated by the regulatory scheme, Porzecanski
requested a redetermination and Novitas affirmed its initial
denial. Id. at 16. He then sought a reconsideration by
Maximus Federal Services, a qualified independent
contractor. Id. Maximus also rejected his claim, in a decision
the district court described as “not entirely clear.” Id.
Porzecanski fared no better before an ALJ, who denied
coverage as well. Id. Porzecanski then appealed to the
Council and, after the ninety-day review period lapsed,
informed the Council of his desire to escalate the appeal to
federal court. Id. The Council acknowledged his request and
confirmed it could not issue a decision within the required
time frame, which permitted Porzecanski to proceed to federal
court.
While Porzecanski pursued his claim through the lengthy
administrative appeals process, he underwent monthly IVIG
therapy and submitted Medicare claims for each treatment.
Initial contractors continued to deny coverage. Unlike the
December 2014 claim, however, each subsequent denial was
eventually overturned by either a qualified independent
contractor or an ALJ, obviating the need for judicial review of
those claims. Id. Yet Porzecanski’s success on agency review
did not interrupt the initial denials. Because the review
generally binds only the parties unless specifically designated
as precedential, a favorable determination in one proceeding
does not ensure that future claims will be approved. See 42
C.F.R. §§ 401.109, 405.1130, 405.1048.
insurer. The December 16 treatment was the first IVIG claim
submitted to Medicare after Porzecanski became eligible therefor.
7
Porzecanski filed suit in district court on October 17,
2016. On summary judgment, Porzecanski sought to reverse
the denial of benefits for his December 16, 2014 claim and,
because HHS’s favorable coverage rulings had done nothing
to stem the flow of adverse initial determinations, also
requested “declaratory and injunctive relief . . . confirming his
entitlement to Medicare coverage for his medically necessary
and life-saving treatment, and requiring the Secretary, his
agency, and its contractors to honor the agency’s obligation to
provide the Medicare benefits to which he is entitled.”
Plaintiff’s Memorandum in Support of Motion for Summary
Judgment at 2–3, Porzecanski, 316 F. Supp. 3d 11 (No.
16-2064), ECF No. 15-1. The proposed order accompanying
Porzecanski’s motion asked the court to order the Secretary to
“take all timely and appropriate actions necessary to ensure
that [HHS], its contractors, and its administrative review
officials will not deny Medicare Part B coverage
for . . . future IVIG treatments furnished to [Porzecanski] for
SCLS pursuant to a physician’s order and incident to a
physician’s service to [Porzecanski].” Proposed Order at 2,
Porzecanski, 316 F. Supp. 3d 11 (No. 16-2064), ECF No.
15-6 (emphasis added).
On May 30, 2018, the district court granted Porzecanski’s
motion in part, concluding that the ALJ committed “clear
error” by denying the claim even though the IVIG treatment
at issue “met all requirements for coverage.” 316 F. Supp. 3d
at 19. Accordingly, it reversed the denial of benefits and
“direct[ed] HHS to take all steps necessary to reflect
Medicare coverage for Porzecanski’s IVIG treatment of
December 16, 2014.” Id. at 21. But it denied further
declaratory and injunctive relief. The district court viewed
Porzecanski’s proposed remedy as “an advance decision on
whether Medicare covers [his] other claims” and declined to
make such a determination because:
8
For benefits claims “arising under” the
Medicare statute, “the sole avenue for judicial
review” is 42 U.S.C. § 405(g), which requires
beneficiaries to first pursue their claims
through the Medicare claims process before
seeking review in federal court. Heckler v.
Ringer, 466 U.S. 602, 615 (1984); see also 42
U.S.C. §§ 405(h), 1395ff(b)(1)(A). That is, the
Medicare statute “demands the ‘channeling’ of
virtually all legal attacks through the agency.”
Shalala v. Ill. Council on Long Term Care,
Inc., 529 U.S. 1, 13 (2000).
Id. at 22. Porzecanski was therefore required to “initiate his
claims for other IVIG treatments through the Medicare claims
process.” Id. The district court noted, however, that
Porzecanski was not “without recourse”: he could challenge
the LCD “under which contractors have summarily denied his
claims” 3 or request that HHS issue a national coverage
determination (NCD).4 Id. Porzecanski appeals the denial of
his request for declaratory and injunctive relief.
3 A beneficiary who objects to an LCD “provision” can seek
administrative review of its reasonableness. 42 C.F.R. § 426.300(a);
see 42 U.S.C. § 1395ff(f)(2)(A). The beneficiary can also obtain
judicial review, 42 U.S.C. § 1395ff(f)(2)(A)(iv), including, in some
cases, “without otherwise exhausting other administrative
remedies,” id. § 1395ff(f)(3).
4 An NCD is “a determination by the Secretary with respect to
whether or not a particular item or service is covered nationally,”
42 U.S.C. § 1395ff(f)(1)(B), which “ensure[s] that similar
claims . . . are covered in the same manner,” 78 Fed. Reg. 48,164,
48,165 (Aug. 7, 2013). When no NCD has been made for a
particular item or service, an eligible beneficiary may request that
the Secretary issue one. 42 U.S.C. § 1395ff(f)(4)(A).
9
Porzecanski also heeded the district court’s advice. After
filing this appeal, Porzecanski requested that Novitas revise
its LCD to reflect coverage for IVIG when used to treat
SCLS. Novitas updated its LCD, effective for services
performed on or after September 9, 2018, and added SCLS as
a covered indication for IVIG, albeit in limited circumstances.
Appellee’s Addendum at 8, 13. Although HHS does not argue
with the partial grant of summary judgment ordering coverage
for the December 16, 2014 IVIG treatment, it does maintain
that the revised LCD has mooted Porzecanski’s appeal. We
must therefore consider whether Porzecanski’s appeal is moot
before we determine whether the district court correctly
declined to grant the requested equitable relief. We address
each issue in turn.
II. MOOTNESS
HHS argues that the appeal “appears to be moot” as a
result of Novitas’ revised LCD. Appellee’s Br. at 11.
Although HHS’s brief cites no caselaw on this point, we have
an “independent obligation” to ensure that cases before us are
not moot. Am. Freedom Def. Initiative v. WMATA, 901 F.3d
356, 361 (D.C. Cir. 2018) (quotation marks omitted). This
duty arises from Article III’s requirement that federal courts
“only adjudicate actual, ongoing controversies.” Honig v.
Doe, 484 U.S. 305, 317 (1988). In general, “a case becomes
moot when the issues presented are no longer live or the
parties lack a legally cognizable interest in the outcome.”
Conservation Force, Inc. v. Jewell, 733 F.3d 1200, 1204
(D.C. Cir. 2013) (quotation marks omitted). For example, a
case is moot if intervening events make it impossible “to grant
any effectual relief,” Church of Scientology of Cal. v. United
States, 506 U.S. 9, 12 (1992) (quotation marks omitted), or if
“a party has already obtained all the relief that it has sought,”
10
Conservation Force, 733 F.3d at 1204 (quotation marks and
brackets omitted).
This case is not moot. Porzecanski seeks an equitable
remedy to stop the nearly automatic coverage denials that
have been, and continue to be, issued for his monthly IVIG
treatments. The district court’s order reversing the denial of
the December 16, 2014 claim has done nothing to stop the
repetitive denials underlying Porzecanski’s claim for
declaratory and injunctive relief. Nor has the revised Novitas
LCD given Porzecanski the full relief he requested.
Novitas’ September 2018 revisions expanded coverage of
IVIG for SCLS “on a trial basis when associated with
monoclonal gammopathy and used for prophylaxis,” although
“prophylaxis should be tapered to the lowest dose
obtainable.” Appellee’s Addendum at 13–14. HHS argues the
case is moot because coverage is no longer “categorically
unavailable.” Appellee’s Br. at 11–12. But Novitas has
continued to deny Porzecanski’s claims after Novitas’ revised
LCD’s effective date and he maintains that the “lowest dose
obtainable” limitation is arbitrary and dangerous.5 Appellant’s
Reply Br. at 12–13. Shortly before oral argument in this case,
Novitas again revised its LCD, replacing “lowest dose
obtainable” with “lowest effective dose.” Local Coverage
Determination (LCD): Intravenous Immune Globulin (IVIG)
(L35093), CTRS. FOR MEDICARE & MEDICAID SERVS.,
https://www.cms.gov/medicare-coverage-database/details/lcd-
details.aspx?LCDId=35093 (last updated Aug. 22, 2019). 6
5
Porzecanski has brought a separate action in district court
challenging the revised LCD. See Porzecanski v. Azar, No.
19-cv-661 (D.D.C. filed Mar. 8, 2019) [hereinafter Porzecanski II].
6 Both the impetus and the effect of this change are not
entirely clear. On March 15, 2019, Porzecanski requested
reconsideration of certain language in Novitas’ revised LCD. See
11
Although the impact of this most recent change remains to be
seen, it appears to support, if anything, coverage for
Porzecanski. In any event, neither LCD revision has mooted
this case.
Assuming, arguendo, that the current Novitas LCD
manifests that Porzecanski’s IVIG treatments are covered
under Medicare Part B, he still would not have “obtained all
the relief [he] sought.” Conservation Force, 733 F.3d at 1204
(quotation marks omitted). An LCD binds only the issuing
contractor. See 42 U.S.C. § 1395ff(f)(2)(B). That is, if
Porzecanski receives treatment in a geographic region
administered by another contractor, the Novitas LCD would
not control the determination.7 An LCD is also binding only
at the initial determination stage and does not dictate the
qualified independent contractor’s reconsideration decision.
Id. § 1395ff(c)(3)(B)(ii)(II). Likewise, notwithstanding LCDs
are afforded “substantial deference . . . if they are applicable
to a particular case,” ALJs and the Council are not bound to
follow the determination made by the issuing contractor. 42
Attachment, Letter from Jaynie Lilley, Counsel for HHS, to Mark J.
Langer, Clerk of Court (Sept. 4, 2019) (pursuant to Fed. R. App. P.
28(j)). Novitas responded on August 16 and rejected his assertion
that “lowest dose obtainable” was ambiguous. Id. Nevertheless,
within a week of its response, Novitas in fact substituted “effective”
for “obtainable,” a change it described as “non-substantive” and
“made for clarification.” Local Coverage Determination (LCD):
Intravenous Immune Globulin (IVIG) (L35093), CTRS. FOR
MEDICARE & MEDICAID SERVS.,
https://www.cms.gov/medicare-coverage-database/details/lcd-detail
s.aspx?LCDId=35093 (last updated Aug. 22, 2019).
7 Indeed, to date Porzecanski has fared better with contractors
operating in other jurisdictions. See Complaint, Exhibit 2 at 27,
Porzecanski II, No. 19-cv-661 (D.D.C. filed Mar. 8, 2019), ECF
No. 1-3.
12
C.F.R. § 405.1062(a). In sum, other initial contractors,
qualified independent contractors, ALJs and the Council are
not bound by the Novitas LCD when deciding whether
Porzecanski’s IVIG treatments are covered under Medicare
Part B. They would, however, be bound by the equitable relief
he seeks. Accordingly, Porzecanski’s appeal is not moot.
III. PORZECANSKI’S REQUESTED RELIEF
Porzecanski contends the district court had authority to
issue equitable relief because the December 16, 2014 claim
was properly before it. We note as a preliminary matter that
Porzecanski has narrowed the scope of his proposed remedy
on appeal. In district court, his proposed order requested, in
part, “that [HHS], its contractors, and its administrative
review officials will not deny Medicare Part B coverage
for . . . future IVIG treatments furnished to [Porzecanski].”
Proposed Order at 2, Porzecanski, 316 F. Supp. 3d 11 (No.
16-2064), ECF No. 15-6. Before us, however, he contends the
requested injunction would not in fact require HHS to
approve his future claims. Tr. of Oral Arg. 10:13–10:17.
Instead, it would merely effectuate the district court’s ruling
that his December 16, 2014 claim was a covered Medicare
Part B benefit by precluding the Secretary—and any HHS
adjudicators and contractors—from denying future claims on
the same rejected grounds. However Porzecanski frames his
request, we believe the district court correctly declined to
grant equitable relief.
A
Federal jurisdiction is extremely limited for claims
arising under the Medicare Act. Generally, a beneficiary must
first channel his claim “into the administrative process which
Congress has provided for the determination of claims for
benefits” before obtaining judicial review. Heckler v. Ringer,
13
466 U.S. 602, 614 (1984). Three statutory provisions
elucidate this channeling requirement.
First, 42 U.S.C. § 1395ii—part of the Medicare
Act—incorporates the judicial review scheme set forth in 42
U.S.C. § 405(h) 8 and elsewhere in Title II of the Social
Security Act, mandating that these provisions “shall also
apply” to the Medicare Act “to the same extent as they are
applicable with respect to” Title II, with any reference to the
“Commissioner of Social Security” deemed a reference to the
HHS Secretary as well. In the Medicare context, then,
§ 405(h) “divests the district courts of federal-question
jurisdiction ‘on any claim arising under’” the Medicare Act
and prohibits judicial review of any decision by the HHS
Secretary, “‘except as herein provided’ in other Title II
provisions.” Am. Hosp. Ass’n v. Azar, 895 F.3d 822, 825
(D.C. Cir. 2018) (quoting 42 U.S.C. § 405(h)). The judicial
review procedure set forth in 42 U.S.C. § 405(g)9 “creat[es]
8 “The findings and decision of the Commissioner of Social
Security after a hearing shall be binding upon all individuals who
were parties to such hearing. No findings of fact or decision of the
Commissioner of Social Security shall be reviewed by any person,
tribunal, or governmental agency except as herein provided. No
action against the United States, the Commissioner of Social
Security, 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). In administering the
Medicare review provisions, all references to the “Commissioner of
Social Security” in § 405(h) are considered references to the HHS
Secretary. Id. § 1395ii.
9
“Any individual, after any final decision of the
Commissioner of Social Security made after a hearing to which he
was a party, irrespective of the amount in controversy, may obtain a
review of such decision by a civil action commenced within sixty
days after the mailing to him of notice of such decision . . . .” 42
14
the exception ‘herein provided.’” Id. Although § 405(g) is not
one of the Title II provisions specifically incorporated by
§ 1395ii, it has been consistently interpreted as such. Id.
(“[T]hese decisions treat it as such, presumably on the theory
that expressly incorporating the judicial-review bar in
§ 405(h) also effectively incorporates the exception ‘herein
provided’ in § 405(g).”).
In relevant part, § 405(g) provides that any person may
“obtain a review” of “any final decision” of the Secretary
“made after a hearing to which he was a party,” by filing a
civil action in federal court. See also 42 U.S.C.
§ 1395ff(b)(1)(A). The United States Supreme Court has
interpreted this provision to impose two distinct requirements
that a beneficiary must satisfy before obtaining judicial
review of a Medicare claim. First, “a claim for benefits shall
have been presented to the Secretary.” Mathews v. Eldridge,
424 U.S. 319, 328 (1976). This precondition is nonwaivable
because without presentment “there can be no ‘decision’ of
any type,” as is required by § 405(g). Id. Presentment is thus
“an absolute prerequisite” for jurisdiction. Nat’l Kidney
Patients Ass’n v. Sullivan, 958 F.2d 1127, 1130 (D.C. Cir.
1992). Second, “the plaintiff must fully exhaust all available
administrative remedies, though this more demanding
requirement is waivable.” Am. Hosp. Ass’n, 895 F.3d at 826.
Accordingly, § 405(h)’s bar on judicial review, as
modified by § 405(g), “demands the ‘channeling’ of virtually
all legal attacks through the agency.” Shalala v. Ill. Council
on Long Term Care, Inc., 529 U.S. 1, 13 (2000). Channeling
extends “beyond ordinary administrative law principles of
ripeness and exhaustion of administrative remedies” in order
to “assure[] the agency greater opportunity to apply, interpret,
U.S.C. § 405(g). As noted, “Commissioner of Social Security”
refers to the HHS Secretary in the Medicare context. Id. § 1395ii.
 15
or revise policies, regulations, or statutes without possibly
premature interference by different individual courts.” Id. at
12–13 (quotation marks omitted). That said, the preconditions
do not apply “where application of § 405(h) would not simply
channel review through the agency, but would mean no
review at all.” Id. at 19; see also Am. Hosp. Ass’n, 895 F.3d at
825 (“[F]ederal-question jurisdiction remains available where
necessary to preserve an opportunity for judicial review.”).
We have held that the exception recognized in Illinois
Council “applies not only when administrative regulations
foreclose judicial review, but also when roadblocks
practically cut off any avenue to federal court.” Am.
Chiropractic Ass’n v. Leavitt, 431 F.3d 812, 816 (D.C. Cir.
2005). A party may not circumvent the channeling
requirement “by showing merely that postponement of
judicial review would mean added inconvenience or cost in an
isolated, particular case.” Council for Urological Interests v.
Sebelius, 668 F.3d 704, 708 (D.C. Cir. 2011) (quotation
marks and brackets omitted). Rather, the “difficulties must be
severe enough to render judicial review unavailable as a
practical matter.” Am. Chiropractic Ass’n, 431 F.3d at 816.
B
We review de novo the district court’s conclusion that it
was precluded by § 405(g) from issuing the requested
declaratory and injunctive relief. See, e.g., Am. Hosp. Ass’n,
895 F.3d at 825.
A beneficiary seeking to establish a right to future benefit
payments must be considered to have brought a claim that
“arises under” the Medicare statute. Ringer, 466 U.S. at 615.
Judicial review is therefore limited by the interplay between
§ 405(h) and § 405(g), subject to the exception expounded by
the Supreme Court in Illinois Council. Here, Porzecanski has
16
not shown that judicial review will be “foreclose[d]” or
“practically cut off” if he is forced to channel future claims
through the HHS administrative process. See Am.
Chiropractic Ass’n, 431 F.3d at 816. To the contrary, he can
obtain judicial review of any future claim denial just as he has
done in this case. And to the extent he desires broader relief
outside the case-by-case adjudicatory model, he has a clear
administrative path to challenge an LCD or to request an
NCD, see 42 U.S.C. § 1395ff(f)(2)(A), (f)(4)(A), subject, in
both cases, to judicial review after final agency action. 42
U.S.C. § 1395ff(f)(1)(A)(v), (f)(2)(A)(iv). Postponing judicial
review would delay—but not deprive—Porzecanski of access
to federal court. Until then, he has an adequate remedy that
seems to work. Indeed, except for the December 16, 2014
claim, HHS has ultimately approved his IVIG treatments. He
understandably wants to end the cycle of initial denials and
agency appeals but “occasional individual, delay-related
hardship” does not override “the judgment of Congress”
encapsulated in § 405(h). Illinois Council, 529 U.S. at 13.
Accordingly, Porzecanski must present and exhaust each of
his future benefit claims.
Porzecanski cannot satisfy § 405(g)’s presentment
requirement with respect to future claims because those
claims have not yet arisen. Under the Medicare scheme, a
claim can be filed “only after the medical service for which
payment is sought has been furnished.” Ringer, 466 U.S. at
621. Moreover, § 405(g) contemplates appeals from
“decision[s]” of the Secretary. Here, the Secretary has not
decided Porzecanski’s future claims because—to state the
obvious—none has been submitted. Porzecanski attempts to
avoid this conclusion, arguing that he does not in fact seek “a
declaration of entitlement to Medicare benefits on specific
future claims,” even as he admits his requested relief would
“preclud[e] the agency from applying its invalidated
17
conclusions that the treatments for his rare condition are not a
Medicare-covered benefit and not medically necessary.”
Appellant’s Br. at 32.
Porzecanski’s strained position is at odds with Supreme
Court precedent. In Ringer, the Court held that § 405(g)
barred a patient from obtaining declaratory and injunctive
relief compelling the Secretary to conclude that his future
surgery was “reasonable and necessary” under the Medicare
Act. 466 U.S. at 620–21, 626–27. The equitable nature of the
relief did not mean that the claim was different from
“essentially one requesting the payment of benefits.” Id. at
620. Indeed, as the Court explained, “[a]lthough it is true that
Ringer is not seeking the immediate payment of benefits, he is
clearly seeking to establish a right to future payments” which
“must be construed as a ‘claim arising under’ the Medicare
Act because any other construction would allow claimants
substantially to undercut Congress’ carefully crafted scheme
for administering the Medicare Act.” Id. at 621. And for the
three patients who had already had the surgery at issue, the
Court affirmed “[i]t is of no importance” that they “sought
only declaratory and injunctive relief and not an actual award
of benefits as well” because “only essentially ministerial
details will remain before respondents would receive
reimbursement.” Id. at 615. In Illinois Council, the Supreme
Court again declared that a “claim for future benefits is a
§ 405(h) claim” and that “all aspects” of any future claim
“must be channeled through the administrative process.” 529
U.S. at 12 (quotation marks and citation omitted); see also
Ringer, 466 U.S. at 614.
Ringer and Illinois Council directly foreclose
Porzecanski’s attempt to recast the requested relief as
anything other than a claim for future benefits. An order
requiring HHS to conclude that future IVIG treatments are
18
both a “Medicare-covered benefit” and “medically necessary”
runs headlong into the Supreme Court’s instruction that “all
aspects” of a claim be first channeled through the agency.
Illinois Council, 529 U.S. at 12 (emphasis added). Moreover,
the issues Porzecanski attempts to resolve through judicial
decree are not merely related to his claim; they are his claim.
Granted, Porzecanski would still need to provide appropriate
documentation in connection with his claims but the ultimate
issue of whether his treatments are covered under Medicare
Part B would be predetermined by the relief he seeks. In other
words, “only essentially ministerial details [would] remain
before [he] would receive reimbursement” in the future.
Ringer, 466 U.S. at 615. Porzecanski “is clearly seeking to
establish a right to future payments” outside the appropriate
channels and we therefore must reject his request for
prospective relief. Ringer, 466 U.S. at 621. We believe the
district court correctly rejected Porzecanski’s attempt to
circumvent the Medicare Act’s channeling requirement. 10
Because we hold that Porzecanski runs afoul of § 405(g)’s
jurisdictional presentment precondition, we need not decide
whether he exhausted administrative remedies or whether
exhaustion is otherwise waived.
10
The district court did not explicitly state whether it declined
to grant equitable relief under the nonwaivable presentment
requirement or the waivable exhaustion requirement. It appears,
however, that the court based its decision on jurisdictional
presentment grounds. See Porzecanski, 316 F. Supp. 3d at 22
(“Porzecanski must initiate his claims for other IVIG treatments
through the Medicare claims process, and the Court cannot provide
an advance decision on whether Medicare covers the other
claims.”) (emphasis added). We read this language, as well as the
court’s corresponding discussion of channeling, id., to reflect its
conclusion that Porzecanski has not yet presented his future claims
to the Secretary.
19
We note that Porzecanski construes his case as one
implicating the court’s authority to issue equitable relief, not
its jurisdiction of the underlying claim. There is no dispute
that the December 16, 2014 claim was properly channeled
through HHS before reaching the district court.
Understandably, then, Porzecanski frames the equitable relief
he seeks as “effectuat[ing] the district court’s invalidation of
the Secretary’s conclusions” so that the Secretary and the
attendant components of HHS cannot deny his future claims
for the same reasons. Appellant’s Reply Br. at 5–6. As he sees
it, the properly channeled claim secured jurisdiction, thereby
authorizing the district court to issue equitable relief. We
disagree with his characterization. Properly channeling one
claim does not permit a plaintiff to resolve other claims or
causes of action that have not been channeled. See S. Rehab.
Grp., P.L.L.C. v. Sec’y of HHS, 732 F.3d 670, 677–79 (6th
Cir. 2013).
Porzecanski cites Califano v. Yamasaki, 442 U.S. 682
(1979), where the Supreme Court recognized that § 405(g)
authorizes injunctive relief. In Yamasaki, the Court upheld
class-wide injunctive relief ordering the Secretary to provide
class members with an opportunity for a hearing before
recouping erroneous overpayments of Social Security
benefits. Id. at 705. Relevant here, the Court noted that
injunctive relief remains available because § 405(g) does not
strip federal courts of their equitable power. Id. at 705–06.
But the fact that equitable relief is not categorically foreclosed
under § 405(g) says nothing about when it is available. The
Yamasaki opinion itself provides only two examples of when
equitable relief is appropriate: to preserve the status quo
pendente lite and, in class actions, to protect absent class
members and prevent repetitive litigation. Id. at 705.
Harmonizing Yamasaki with Ringer and Illinois Council, we
conclude the fact that a federal court may issue equitable
20
relief in some circumstances does not mean equitable relief is
appropriate in all cases. We recognize there may be situations
where equitable relief is appropriate and necessary to carry
out a decision. But when prospective relief would functionally
determine future claims, we cannot ignore the restrictive
mandate of the Medicare Act’s channeling requirement.
Porzecanski’s reliance on Lion Health Services, Inc. v.
Sebelius, 635 F.3d 693 (5th Cir. 2011), and Los Angeles
Haven Hospice, Inc. v. Sebelius, 638 F.3d 644 (9th Cir. 2011),
is similarly misplaced. In both cases, hospice care providers
challenged the so-called “hospice cap regulation,” 42 C.F.R.
§ 418.309, under which they were ordered to repay excess
reimbursement amounts. 635 F.3d at 697; 638 F.3d at 649.
The respective district courts declared the regulation invalid
and enjoined the Secretary from enforcing it. 635 F.3d at 698;
638 F.3d at 649. But the posture of those cases differs
considerably from this one. The district courts in Lion Health
and Los Angeles Haven Hospice exercised jurisdiction under
42 U.S.C. § 1395oo(f)(1), which sets out a judicial review
scheme that deviates from § 1395ii and § 405(g) in important
ways. Indeed, § 1395oo(f)(1) confers jurisdiction of “any
action of the fiscal intermediary which involves a question of
law or regulations relevant to the matters in controversy
whenever the Board determines . . . that it is without authority
to decide the question.” The court can then review the
regulation “notwithstanding any other provisions in section
405.” Id. Thus, in both Lion Health and Los Angeles Haven
Hospice, the challenged regulation’s validity was squarely
presented and properly before the court. Put differently,
enjoining enforcement of the hospice cap regulation did not
“mak[e] premature refund determinations for unexhausted
years”—it simply prevented HHS from relying on an
unlawful regulation. Lion Health, 635 F.3d at 702. By
contrast, Porzecanski’s requested remedy would functionally
21
require HHS to cover claims that have neither been presented
to the Secretary nor administratively exhausted.
Accordingly, we also reject Porzecanski’s argument that
the Administrative Procedure Act (APA), 5 U.S.C. §§ 701 et
seq., authorizes the remedy he seeks. Although he frames
Lion Health and Los Angeles Haven Hospice as affirming
equitable relief granted pursuant to the APA, neither held that
the APA independently permits prospective relief where the
Medicare Act’s jurisdictional prerequisites have not been
satisfied. See, e.g., Lion Health, 635 F.3d at 701 (“The district
court may only hear a claim and grant relief pursuant to the
specific jurisdictional provisions of the Medicare Act.”).
Indeed, the Fifth Circuit made clear that the APA only
provided authority to craft the equitable remedy at issue once
the challenged regulation’s validity was properly before the
district court. Id. at 701–02. And in both cases, our sister
circuits emphasized that the underlying claim had been
channeled through the agency. See L.A. Haven Hospice, 638
F.3d at 662 (Haven Hospice “fully complied with the
requirements of Illinois Council” to challenge the
reimbursement regulation); Lion Health, 635 F.3d at 701
(Lion Health satisfied the statutory “prerequisites to judicial
review”). But Porzecanski’s future claims have not
“proceed[ed] through the special administrative review
procedures set forth in the Medicare statute,” L.A. Haven
Hospice, 638 F.3d at 662, and the APA does not excuse the
failure to channel such claims.11
11
Porzecanski’s brief invocation of the Declaratory Judgment
Act, 28 U.S.C. § 2201, is no different. Without an independent
basis for jurisdiction of his future claims, the Declaratory Judgment
Act does not authorize the requested equitable remedy. See Lovitky
v. Trump, 918 F.3d 160, 161 (D.C. Cir. 2019) (“[Section]
2201 . . . ‘is not an independent source of federal jurisdiction.’”)
22
Finally, we consider the practical effects of his requested
relief. In district court, Porzecanski challenged no generally
applicable regulation or policy. Instead, his complaint
challenged only a single ALJ decision. The district court
reversed the claim denial because the ALJ, despite
determining that Porzecanski’s IVIG treatment was
“reasonable and necessary,” nevertheless denied coverage due
to multiple interpretative missteps. Porzecanski, 316 F. Supp.
3d at 19. And because the ALJ’s “reasonable and necessary”
decision was conclusive, see 42 U.S.C. § 405(g) (on judicial
review of a final decision of the HHS Secretary, the
Secretary’s factual findings, “if supported by substantial
evidence, shall be conclusive”), the district court’s
determination that the IVIG treatment was “reasonable and
necessary” was not required for its holding. See 316 F. Supp.
3d at 19 & n.4. Therefore, it is not clear how Porzecanski’s
proposed relief would effectuate the district court’s
invalidation of the ALJ’s reasoning. First, there is no
indication that the invalidated reasoning was relied on in any
subsequent claim determination. Nor could it have been, as
ALJ decisions are non-precedential. See 42 C.F.R. § 401.109
(“The Chair of the [HHS] Departmental Appeals
Board . . . may designate a final decision of the Secretary
issued by the Medicare Appeals Council . . . as
precedential.”); id. § 405.1063 (only “[p]recedential decisions
designated by the Chair of the Departmental Appeals
Board . . . are binding on all CMS components [and] all HHS
components that adjudicate matters under the jurisdiction of
CMS”). And, in every subsequent claim appeal, HHS has
(quoting Metz v. BAE Sys. Tech. Sols. & Servs. Inc., 774 F.3d 18,
25 n.8 (D.C. Cir. 2014)); see also Randall D. Wolcott, M.D., P.A. v.
Sebelius, 635 F.3d 757, 767 (5th Cir. 2011) (Declaratory Judgment
Act is not “independent basis for subject matter jurisdiction” if
there is “no jurisdiction under 42 U.S.C. § 405(g) or 28 U.S.C.
§ 1331”).
23
found that Porzecanski’s IVIG treatment is in fact covered
under Medicare Part B.
Second, the injunction is not limited to ensuring coverage
for the single claim that was properly before the district court.
Rather, it attempts to stretch the outcome of a single claim
dispute to foreclose a contrary decision in any future
determination. This is at odds with the Medicare regime.
Porzecanski wants a declaration that his treatments are
“medically necessary” in all future cases but Medicare policy
provides that for off-label uses—such as IVIG for the
treatment of SCLS—a determination that the treatment is
“medically accepted” is to be made on a “case-by-case basis.”
Medicare Benefit Policy Manual § 50.4.2 (Rev. 1, Oct. 1, 2003)
https://www.cms.gov/Regulations-and-Guidance/Guidance/M
anuals/Downloads/bp102c15.pdf. Medical science changes.
An accepted practice may be obsolete in a few years.
Ordering HHS to cover Porzecanski’s treatments indefinitely
can hardly be necessary to effectuate the district court’s
judgment regarding one treatment at a particular point in time.
If Porzecanski disputes a future adverse determination, he has
agency review—and, eventually, federal court—to vindicate
his position.
Porzecanski’s real problem seems to be with Novitas. To
the extent he wants the Secretary to instruct Novitas to cover
his treatments pursuant to its LCD, he cannot do so through
the claim appeals process. There is a distinct path provided
for beneficiaries to secure broader coverage determinations
and Porzecanski cannot circumvent those procedures by
obtaining an injunction as part of a single claim appeal.12
12
An LCD challenge is “distinct from the claims appeal
processes,” 42 C.F.R. § 426.310, and cannot be used to review “an
individual claim determination,” id. § 426.325(b)(11). Conversely,
24
For the foregoing reasons, the district court’s partial grant
of summary judgment to HHS is affirmed.
So ordered.
a claim appeal is an improper mechanism by which to “set aside or
review the validity of an . . . LCD.” Id. § 405.1062. LCD and NCD
review is intended to provide an alternative path for beneficiaries to
challenge claim denials, not to replace the claims appeal process.
See Medicare Program: Review of National Coverage
Determinations and Local Coverage Determinations, 68 Fed. Reg.
63,692, 63,693 (Nov. 7, 2003). Accordingly, it would be odd if the
separate statutory framework governing LCD and NCD review
could be contravened by using equitable relief to effectuate the
judgment of a single favorable determination.