National Association of Rehabilitation Facilities, Inc. v. Otis R. Bowen, Secretary, Department of Health & Human Services

Opinion for the Court filed by Circuit Judge RUTH BADER GINSBURG.

Concurring opinion filed by Circuit Judge WILLIAMS.

RUTH BADER GINSBURG, Circuit Judge:

Two institutional providers of Medicare program services and three national membership organizations composed of such providers or their employees commenced this action against the Secretary of the Department of Health and Human Services (HHS) seeking: (1) a declaration that the Prompt Payment Act, 31 U.S.C. §§ 3901 et seq., which became effective October 1, 1982, applies to reimbursements to providers of medical services under the Medicare Act, 42 U.S.C. §§ 1395 et seq.; and (2) an injunction ordering the Secretary of HHS to comply with the Prompt Payment Act in his administration of the Medicare program. The complaint predicated subject matter jurisdiction exclusively upon 28 U.S. C. § 1331 (general federal question jurisdiction) and recited 28 U.S.C. § 2201 as the basis for the declaratory relief plea. The district court, denying plaintiffs’ motion for summary judgment and granting defendant’s motion to dismiss, held that the Prompt Payment Act “does not apply to reimbursements to providers under the Medicare Act.” National Ass’n of Rehabilitation Services v. Bowen, No. 86-2386 (D.D.C. Mar. 18, 1987).¹

We hold that plaintiffs have presented no “case of actual controversy,” 28 U.S.C. § 2201, properly cognizable under the general federal question jurisdiction of the district court, 28 U.S.C. § 1331. Plaintiffs may not invoke 28 U.S.C. §§ 1331, 2201 for the adjudication of an “issue” and thereby circumvent the prerequisites to judicial review which would attend presentation of that issue in the context of a concrete claim. See Toilet Goods Ass’n v. Gardner, 387 U.S. 158, 164-65, 87 S.Ct. 1520, 1524-25, 18 L.Ed.2d 697 (1967) (adjudication in court generally should await administrative determination in concrete case). Accordingly, we vacate the district court’s order ruling on the merits of the question plaintiffs tendered, and remand the case to that court with an instruction to dismiss the complaint for failure to present a claim for declaratory relief appropriately entertained under 28 U.S.C. §§ 1331, 2201.

Plaintiffs have underscored that their civil action is one in which “no [fact specific] claim is presented.” Brief of Plaintiff-Appellants at 31.² Instead, they wish to litigate an “issue” in isolation: Does the Prompt Payment Act apply to the Medicare program? If the provider plaintiffs had presented “specific reimbursement claims,” then concededly they would have been required to “resort to the process for administrative adjudication of claims under the Medicare Act” before any right to judicial review would accrue. Id.; see also Reply Brief at 9. Similarly, had plaintiffs pressed “express claims under contracts,” they would have been obliged to contend with the claim filing and administrative process requirements of the Contract Disputes Act, 41 U.S.C. §§ 601 et seq. See Brief of Plaintiff-Appellants at 30. By abstracting their Prompt Payment Act “issue,” see id. at 31, for separate airing, plaintiffs believe they may avoid the preliminaries that would attend presentation of a fully fleshed-out case.

As precedent for their position, plaintiffs feature this court’s decision in National Ass’n of Home Health Agencies v. Schweiker, 690 F.2d 932 (D.C.Cir.1982), cert. denied, 459 U.S. 1205, 103 S.Ct. 1193, 75 L.Ed.2d 438 (1983) (NAHHA). See Reply Brief at 5-6. Plaintiffs in that case questioned the validity of a regulation by the Secretary requiring Medicare providers, many of whom had until then dealt directly with the Secretary, to resort instead to intermediaries for reimbursement determinations and payments. Holding the regulation reviewable under 28 U.S.C. § 1331, we rested our decision on two pillars. First, we explained that plaintiffs sought “no money at all,” i.e., monetary recovery was neither their immediate nor their “ultimate goal.” 690 F.2d at 938. Second, and most prominently, we stressed that “no alternative form of judicial review” to test the regulation was available. Id. at 939. Moreover, greater fact particularization would not have advanced the court’s analysis in NAHHA.

Just as it was plain that the NAHHA complainants “d[id] not seek any type of eventual monetary recovery,” id., so it is plain that money eventually is precisely what the providers in this case seek. Appellants themselves assert:

Medicare providers have a right to judicial review of PRRB (Provider Reimbursement Review Board) decisions in the United States District Court for the District of Columbia, 42 U.S.C. § 1395oo(f)(l), and thereby a right to appellate review in this Court. Accordingly, the judgment of this Court on the merits of this case would be a conclusive precedent.

Reply Brief at 9. But “conclusive precedent,” we believe, is best reserved for declaration in an actual, specific, particularized controversy in which the court would be enlightened by the application of the Medicare Act’s own prescriptions regarding payments and payment delays.

At oral argument of the instant appeal, counsel for the Secretary candidly pointed out that in Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 106 S.Ct. 2133, 90 L.Ed.2d 623 (1986), the Supreme Court held that 28 U.S.C. § 1331 accommodated a challenge to a regulation that did affect eventual monetary recovery by Medicare providers. The question in Michigan Academy was whether Congress had insulated against any judicial review regulations promulgated under Part B of the Medicare program. The regulation in question authorized payment of benefits in different amounts for similar physicians’ services. The Medicare Act does preclude judicial review “for determinations of the amount of Part B awards.” United States v. Erika, Inc., 456 U.S. 201, 208, 102 S.Ct. 1650, 1654, 72 L.Ed.2d 12 (1982). Distinguishing challenges to the method by which such amounts are to be determined from the determinations themselves, the Supreme Court in Michigan Academy held the Secretary’s regulation amenable to general federal question review.

Michigan Academy proceeded from “the strong presumption that Congress intends judicial review of administrative action,” 106 S.Ct. at 2135, and concluded that “[the] presumption ha[d] not been surmounted.” Id. at 2141. The Michigan Academy issue — whether Congress “intended that there be no forum to adjudicate statutory and constitutional challenges to regulations promulgated by the Secretary,” id. at 2140 —is not presented here. Neither side in this case has urged that the Prompt Payment Act issue on which plaintiffs seek a ruling could not be adjudicated in another format or forum — in the context of a fact-specific claim. The Secretary maintains that all disputes over interest penalties under the Prompt Payment Act would be subject to the process established by the Contract Disputes Act,³ while plaintiffs believe that, for Medicare providers, the PRRB is the proper starting place. Reply Brief at 6 (“[Cjonsideration of disputes over interest penalties due to Medicare providers under the Prompt Payment Act would lie with the PRRB since any amounts found to be due would be reimbursed by the Medicare program.”). We leave that matter for the day, case, and court in which it is properly framed for decision.

It. is easier and quicker to frame “a pure issue of statutory law,” Brief of Plaintiff-Appellants at 12, go directly to court, get the court’s answer, and then plug that answer in as “conclusive precedent,” Reply Brief at 9, in each concrete case. However, our federal court system traditionally sets precedent not in response to “pure” questions framed for or referred to federal judicial tribunals, but in the process of deciding fact specific, particular cases. We have in this instance no warrant to permit plaintiffs to avoid the ordinary mode of gaining access to federal courts.⁴

For the reasons stated, the decision of the district court reaching the merits of this action is vacated and the case is remanded with an instruction to dismiss the complaint for failure to state a claim for declaratory relief properly cognizable under general federal question jurisdiction.

It is so ordered.

1 . The district court also stated: “Plaintiff [sic], in any event, has failed to exhaust its administrative remedy.” Id.

2 . See also Reply Brief at 4 ("The Complaint ... does not allege any amount to be owing to any Medicare provider.... [T]he Secretary has been delinquent in the payment of Medicare billings under the standards of the Prompt Payment Act, but this action does not present any such claims.”); Supplemental Brief of Plaintiff-Appellants at 2 ("Heaving aside the question of whether the instant case presents a ‘claim’ at all,” it presents an "issue ... under the Prompt Payment Act”).

3 . The Secretary recognizes, however, that "[i]t might nevertheless be argued that [a] Prompt Payment Act claim [pended to a Medicare reimbursement claim] 'arises under’ the Social Security Act, since the claim 'piggybacks’ on Medicare claims, and payment of any interest penalty would have to be made from the Medicare Trust Funds. 31 U.S.C. § 3902(d)." Supplemental Memorandum for Respondents at 3.

4 . Plaintiffs, we note, confront no requirement necessitating any "immediate and significant change in the plaintiffs’ conduct of their affairs with serious penalties attached to noncompliance.” Abbott Laboratories v. Gardner, 387 U.S. 136, 153, 87 S.Ct. 1507, 1518, 18 L.Ed.2d 681 (1967).