Opinion
Civil Action No. SA-00-CA-0902 HG
November, 2000
ORDER DENYING INJUNCTIVE RELIEF
I. Introduction
Plaintiff, Life Source Enterprises, Inc., ("Life Source"), an ambulance service provider, has brought this action challenging the suspension of its Part B Medicare payments. In this lawsuit, filed September 11, 2000, Life Source seeks review of agency action, as well as declaratory judgment and injunctive relief. Life Source also filed a motion for a temporary restraining order on the same day it filed its lawsuit, which the District Court denied on September 12, 2000. The District Court then referred Life Source's request for a preliminary injunction to me for the entry of a memorandum and recommendation. At the conclusion of the hearing on the preliminary injunction, however, the parties consented to my jurisdiction to enter a final ruling on Life Source's request for injunctive relief. Before addressing the merits of the preliminary injunction request, a summary of the procedural background in this case is warranted.
Docket no. 1 Docket no. 3 (Brief in support of Life Source's for injunctive relief).
Docket nos. 2 4.
Docket no. 4.
Docket nos. 21 22.
A. Procedural Background
In response to Life Source's request for a preliminary injunction, defendant, Donna Shalala, Secretary of the United States Department of Health Human Services ("the government") filed a motion for summary judgment on October 5, 2000. The government argues the court lacks subject-matter jurisdiction to entertain Life Source's request for injunctive relief because Life Source has failed to exhaust the administrative remedies available under the Social Security Act, 42 U.S.C. § 1395 et seq., (commonly known as the Medicare Act). Alternatively, the government contends that Life Source has failed to establish its entitlement to injunctive relief. The government has not filed a formal answer to Life Source's complaint.
Docket no. 10.
I held a hearing on the request for a preliminary injunction on October 27, 2000. Because both parties agree that the jurisdiction question is a threshold matter that must be resolved before addressing the merits of the request for preliminary injunction, the parties argued their respective positions on the record. I granted Life Source's second extension to formally respond to the summary judgment motion, and the same was filed after the hearing, on November 2, 2000.
Docket no. 20.
At the preliminary injunction hearing, Life Source presented two fact witnesses. Patricio Treviño Jr., one of Life Source's proprietors, described the sequence of events related to the temporary suspension of Medicare payments. Importantly, Mr. Treviño also testified about the injury Life Source would suffer if the injunction is not issued. Joe Allen, operations manager of Life Source's office in Corpus Christi, testified about his knowledge of the investigation that triggered the suspension of Medicare claim payments, the procedures Life Source followed in filing claims for payment with Medicare, and, in particular, the claims for transportation of dialysis patients upon which the government's investigation appears to be based. Prior to the hearing, Life Source served subpoenas duces tecum for William Young and Matthew Lawhon, employees of the Medicare "carrier" handling the investigation into Life Source's purported fraudulent billing practices. I granted the government's motion to quash said subpoenas, subject to re-urging, if necessary, once the question of subject-matter jurisdiction has been resolved. Life Source has filed an amended complaint and request for injunctive relief, in addition to a supplemental memorandum in support of its request for a preliminary injunction.
Docket no. 19.
Docket no. 23.
Upon a review of the supplemental and original briefs, amended pleadings, the legal arguments and evidentiary testimony advanced at the hearing, and all the relevant authorities, I conclude that although Life Source has presented sufficient evidence to establish irreparable injury, I need not go any further in my analysis of the request for preliminary injunction because this court lacks subject-matter jurisdiction over this dispute.
II. Analysis A. Relevant Facts
Life Source is a family business owned by San Antonio residents, Marcella and Patricio Treviño. Life Source is a "Part B" Medicare certified ambulance service company that furnishes medically necessary ambulance services to Medicare beneficiaries through contracts with nursing homes, hospitals and home health agencies, in San Antonio, Corpus Christi, and Beeville, Texas. The evidentiary record shows that TrailBlazer Health Enterprises, Inc., ("Trailblazer"), a Medicare Part B "carrier," by a two-page letter dated August 28, 2000, attempted to notify Life Source of a decision by the Health Care Financing Administration ("HCFA") to suspend its Medicare payments in accordance with 42 C.F.R. § 405.371(a) and § 405.372(d). In relevant part, the suspension letter read as follows:
The Medicare program consists of two parts. Part A of the program provides insurance for the cost of the hospital and related post-hospital services. See Manakee professional Medical Transfer Service v. Shalala, 71 F.3d 574, 577 (6th Cir. 1995); Cervoni v. Sec. of Health, Education and Welfare, 581 F.2d 1010, 1012 (1st Cir. 1978). Part B establishes a voluntary program of "supplemental medical insurance" covering physician's and ambulance services' charges, as well as other medical services (i.e., diagnostic, home health and outpatient physical therapy services) for the aged and disabled. Id. See also Neurological Associates-H. Hooshmand, M.D., P.A. v. Bowen, 658 F. Supp. 468, 469 (S.D.Fla. 1987); and Schweiker v. McClure, 456 U.S. 188, 190 (1982) (describing Part B as "a private medical insurance that is subsidized in major part by the federal government."). This dispute involves Part B only.
The Secretary of the Department of Health and Human Services ("HHS") is authorized by Congress to contract with entities called "carriers" to administer Part B of the Medicare program. 42 U.S.C. § 1395u. The carriers receive the actual requests for payments from beneficiaries or their assignees, determine whether the claims are covered by Medicare, and if so, determine the proper amount of payment and pay the claim. 42 U.S.C. § 1395u(a)(1)(A)-(C); and Neurological Associates, 658 F. Supp. at 469. Carriers also "assist in the application of safeguards against unnecessary utilization of services furnished by providers of services and other persons to individuals entitled to benefits under [Part B]. . . ." 42 U.S.C. § 1395u (a)(2)(B).
HHS is the agency responsible for the administration of the Medicare program. The Secretary of HHS has delegated her responsibility for administering the Medicare Program to HCFA. Thus, HCFA is responsible for the actions of Trailblazer in suspending payments to Life Source.
There was also testimony that the suspension letter was sent via facsimile to Life Source's counsel after the filing of the instant law suit.
The suspension of Medicare payments to your facility is based on reliable information that an overpayment or fraud or willful misrepresentation exists or that payments to be made may not be correct. The suspension is based on an investigation by Trailblazer Health Enterprises, L.L.C. in which it was discovered that there are irregularities regarding many of the claims you submitted to Medicare. Specifically, these irregularities include billing for ambulance transports to and from dialysis treatments when patients could have been transported by other means.
Plaintiff's Hearing Exhibit No. 2.
The suspension letter also explained Life Source's right to submit a rebuttal statement and how the rebuttal could influence the decision to continue or terminate the suspension. According to the suspension letter, Life Source then would receive a separate written response to its rebuttal statement containing specific findings and an explanatory statement of the determination to either continue or terminate the suspension.
Id.
Mr. Treviño testified at the preliminary injunction hearing that he first became aware of the suspension when he received a separate letter from Trailblazer on September 5, 2000 regarding the commencement of prepayment medical review. The actual suspension letter was apparently sent to an old business address for Life Source, and consequently, Life Source never actually received it. Life Source contends, not only that the suspension letter was untimely because it was sent to the wrong address, but more importantly, that the letter did not provide sufficient information for Life Source to meaningfully respond to the fraud allegations in its rebuttal statement. In that regard, Life Source argues that the untimeliness and lack of specificity of the suspension letter violate the federal regulations (specifically 42 C.F.R. § 405.372), as well as the program integrity manual ("PIM") issued by the HCFA.
Plaintiff's Hearing Exhibit No. 1.
The suspension letter was apparently sent to Life Source's counsel via facsimile after the filing of the instant law suit.
According to the letter Life Source received on September 5, 2000 initiating prepayment medical review, Life Source's status as a provider was not terminated by the payment suspension, allowing Life Source to continue submitting claims to Medicare for payment.
On September 29, 2000, after having filed the instant lawsuit, Life Source sent its rebuttal statement with supporting evidence, in response to the August 28, 2000 suspension letter. In the rebuttal statement, Life Source denied any fraud in its billing practices, and requested the immediate removal of the suspension. In the alternative, Life Source provided two less onerous options that would permit Trailblazer to conduct its investigation and protect the Medicare program, while at the same time, allow Life Source to remain in business. Although Life Source argues that it was improperly notified about the suspension, nowhere in the statement does it complain about the content of the suspension letter and how its lack of specificity somehow interfered with Life Source's ability to meaningfully formulate a rebuttal statement.
Defendant's Hearing Exhibit No. 2.
By letter dated October 13, 2000, Trailblazer timely informed Life Source that it had considered the rebuttal statement along with the supporting evidence, and had determined that there was no basis for Trailblazer to terminate the suspension pending the ongoing fraud investigation.
Plaintiff's Hearing Exhibit No. 3.
In other words, Trailblazer decided to continue the suspension of Life Source's Medicare payments.
Specifically, the response letter stated that the documentation submitted by Life Source did not illustrate a medical necessity for ambulance transportation under the governing Medicare coverage guidelines.
Again, Life Source alleges that the government's response to Life Source's rebuttal violates the requirements of 42 C.F.R. § 405.375 and HFCA-PIM provisions because it failed to provide specific findings. For example, according to Life Source, Trailblazer was required to provide the names of the Medicare beneficiaries and the dates of services which were the basis of the investigation. Life Source further argues the response letter also failed to provide any evidence concerning the time period in which the alleged fraudulent billings occurred or when the purported ambulance service was not medically necessary.
Life Source also claims the declaration of Matthew Lawhon (Trailblazer's investigator), submitted in support of the government's summary judgment motion, provides more specific information about the investigation than either the initial suspension letter or the response to its rebuttal. For example, Life Source claims that, through Lawhon's declaration, it first learned of the government's contention that the estimated Medicare overpayment to Life Source is $76,000. As of this date, the government has not filed any civil and/or criminal charges against Life Source. Life Source filed a first amended complaint on October 27, 2000, alleging the government's suspension of Medicare payments violates its Fifth Amendment right to due process because it failed to comply with the protective procedural safeguards included in the applicable Medicare regulations and HCFA-PIM. Life Source further contends the government's action of suspension in this case is arbitrary, capricious, and constitutes a substantive rule-making proscribed by the Administrative Procedure Act ("APA"). Life Source requests a declaratory judgment that the government's suspension is contrary to law, and an order enjoining the government, effective August 30, 2000, from suspending Medicare payments to Life Source. The applicable Medicare regulations and HCFA-PIM provisions relied upon by Life Source in requesting injunctive relief are discussed below.
Docket no. 19.
Id.
B. The Applicable Medicare Regulations HCFA-PIM
Medicare regulations, issued December 2, 1996, authorize the suspension of payments when "the intermediary, or the carrier possesses reliable information that an overpayment or fraud or willful misrepresentation exists." The preamble to the regulations provides that "[t]he purpose of suspending payment is to verify whether, and how much, payment was actually due the provider for past claims and to ensure that, if a provider or supplier was overpaid, sufficient funds are available to recover the overpayment. These actions are clearly necessary to protect the Trust Funds from loss."
42 C.F.R. § 405.371(a). The regulations define the term "suspension" as a "withholding of payment by an intermediary or carrier of an approved Medicare payment amount." 42 C.F.R. § 405.370.
See Midwest Family Clinic Inc., v. Shalala, 998 F. Supp. 763, 767 (E.D.Mich. 1998) (quoting 61 Fed. Reg. at 63742-63743).
A suspension is limited to 180 days. In cases of fraud and misrepresentation, however, the suspension may be extended for up to 180 days if the carrier, intermediary, the Office of Inspector General ("OIG") or a law enforcement agency is unable to complete its examination of information or investigation. Also, the HCFA, in very limited circumstances may grant an additional extension of time if the Department of Justice submits a written request to HCFA that the suspension of payment be continued based on an ongoing investigation and anticipated filing of criminal and/or civil actions.
42 C.F.R. § 405.372(d)(2). The request for the 180-day extension must be made in writing.
Once the HCFA carrier determines that a suspension of payments is warranted because there is reliable information of fraud or misrepresentation in the provider's billing practices, it must decide whether prior notice to the provider is appropriate. Once HFCA determines to provide prior notification of the suspension to the provider, the notification letter must state HCFA's intention to suspend payments and the reasons for the suspension. The provider is then afforded the opportunity to submit a rebuttal. If the provider chooses to rebut the suspension, the carrier must, within 15 days of receipt of the same, consider it together with other pertinent evidence submitted and determine whether the facts justify terminating the suspension.
42 C.F.R. § 405.372(a)(4). Issuing a prior notification on suspected fraud or misrepresentation is within the HCFA's discretion.
The HCFA-PIM supplements the regulations by explaining, in more detail and in layman terms, the procedure for implementing payment suspension. Model letters illustrate the specificity expected to be provided in notification letters for fraud suspensions. Notably, the HCFA-PIM directs that the notification should "not disclose information that would undermine a potential fraud case. However, indicating that payment is being suspended because fraud is suspected is not sufficient rationale. The rationale must be specific enough to justify the action being taken and allow the provider an opportunity to identify the problem."
HCFA-PIM Program Manuals Transmittals, Chapter 83-3-8.3 83-3-8.5.
Id. at Chapter 83-3-8.3.2.2.
The Medicare regulations provide that the decision to suspend benefits (as stated in the response to Life Source's rebuttal) is not an initial determination under 42 U.S.C. § 405(h) and is not appealable. The suspension, however, may culminate in an appealable determination under § 405(h) if the claims are subsequently denied, or if the provider is subsequently excluded from the Medicare program.
42 C.F.R. § 405.375(c); and Neurological Associates, 658 F. Supp. at 471.
See Clarinda Home Health v. Shalala, 100 F.3d 526, 529 (8th Cir. 1996).
C. Preliminary Injunction
Life Source seeks a preliminary injunction prohibiting the payment suspension until it is given what it considers to be "proper notice" of the suspension that would provide a meaningful opportunity for Life Source to challenge it. In furtherance of its request for injunctive relief, Life Source also claims that the response given to its rebuttal statement was not adequate because it lacked specificity. Because the government failed to comply with its own procedural guidelines, Life Source argues that the suspension is invalid and should be lifted.A preliminary injunction is an extraordinary equitable remedy that may be granted only if the movant, in this case Life Source, satisfies four requirements: (1) a substantial likelihood of success on the merits; (2) a substantial threat that the movant will suffer irreparable injury if the injunction is denied; (3) that the threatened injury outweighs any damage that the injunction might cause the defendant; and (4) that the injunction will not undermine the public interest. Injury is generally not irreparable if compensatory relief would be adequate, and the movant cannot meet its burden to establish entitlement to a preliminary injunction unless it is under a substantial threat of harm which cannot be undone through monetary remedies. The issuance of a preliminary injunction lies within the sound discretion of the district court.
Affiliated Professional Home Health Care Agency, et. al., v. Shalala et. al., 164 F.3d 282, 285 (5th Cir. 1999) (citing Sunbeam Products, Inc., v. West Bend Co., 123 F.3d 246, 250 (5th Cir. 1997), cert. denied, 523 U.S. 1118 (1998)).
DFW Metro Line Services v. Southwestern Bell Telephone Co., 901 F.2d 1267, 1269 (5th Cir. 1990), cert. denied, 498 U.S. 985 (1990); Spiegel v. City of Houston, 636 F.2d 997, 1001 (5th Cir. 1981).
Id. See also WRIGHT, MILLER KANE, 11 FEDERAL. PRACTICE AND PROCEDURE § 2951 (1995).
1. Irreparable Injury
Regarding the essential element of irreparable injury, I find that Life Source has shown that if the injunction is denied and the payment suspension is not lifted, it will be driven out of business. In the context of Medicare suspensions, going out of business has been held sufficient evidence of irreparable injury. In Midwest Family Clinic, Inc., et al., v. Shalala, et al., a case strikingly similar to the case at hand, the district court concluded that irreparable injury for purposes of obtaining injunctive relief was established through the testimony of the president and manager of two health care providers to whom payments were suspended. The testimony included a discussion of the percentage of income their businesses would lose if the suspension is enforced, the possibility that numerous employees would leave or be laid off, and the companies would lose patients and be harmed in their future ability to contract with third-party payors and managed care programs. In Midwest Family Clinic, the plaintiffs testified that continued suspension of Medicare payments would force them out of business.Like Midwest Family Clinic, Patricio Treviño testified that Life Source is on the verge of going out of business. Since the suspension, Life Source has been forced to lay off 20 of its 100 person workforce. He is behind on his tax withholding payments and will not be able to meet its next payroll. Life Source has also scaled back its operations (particularly at the Beeville office), threatening its abilities to meet its present contracts with various health care facilities. In addition, Treviño testified that if the injunction is denied, he will be forced to file for bankruptcy protection.
Even though Medicare payments supply only part of its normal cash flow, Treviño testified that the company is unable to submit claims to secondary insurance carriers because Medicare has suspended determination of what claims and what portion of claims it will cover. Treviño further testified that he has tried unsuccessfully to borrow money to meet his continuing financial obligations. The weak financial situation that Life Source found itself in when these payments were suspended was explained by a previous six month suspension of Medicare payments that ended only three years ago, after the investigation found no wrongdoing.
Based on Treviño's testimony, and following the court's rationale in Midwest Family Clinic, I conclude that Life Source has met its burden of showing irreparable injury. Nevertheless, because I conclude that this court is without jurisdiction to review the suspension of Medicare payments, I must deny the requested injunction.
2. Subject-Matter Jurisdiction
Life Source predicates jurisdiction in this case on 28 U.S.C. § 1331 (federal question jurisdiction) as an action arising under the Fifth Amendment of the United States Constitution, the Social Security Act, as amended, 42 U.S.C. § 1800 et seq., the APA, 5 U.S.C. § 701-706, and applicable Medicare regulations, 42 C.F.R. § 405.370 et seq. Acknowledging that generally administrative remedies must be exhausted before filing suit in federal court, Life Source argues that because the Medicare Act provides no review of suspension determinations, judicial review must be available to remedy agency violations of its own suspension regulations. I cannot agree.
As discussed more fully below, section 1331 federal-question jurisdiction is precluded by the Medicare Act. Because the Medicare Act precludes review of Life Source's due process claims, § 1331 jurisdiction cannot be asserted. Likewise, there is no jurisdiction under the APA. The Medicare Act provides the sole means for review of Life Source's due process claims. The review process, however, begins by Life Source channeling its due process claims through the agency administrative steps. The Act not only requires that Life Source exhausts its administrative remedies before suing, but it removes jurisdiction from this court to review a suspension determination before a final agency decision has been rendered.
The decision to continue the payment suspension is not a final determination under 42 U.S.C. § 405(h). Section 405(h), made applicable to the Medicare Act by virtue of 42 U.S.C. § 1395ii, provides that no action may be brought under 28 U.S.C. § 1331 1346 to recover on any claim arising under this subchapter and "[n]o findings of fact or decision of the Secretary shall be reviewed by any person, tribunal or governmental agency except" as provided in 4 U.S.C. § 405 (g). Section 405(g), in turn, provides for judicial review only after a plaintiff presents its claims to the Secretary and exhaust its administrative remedies.
42 U.S.C. § 405(h) provides judicial review only as specified under § 405(g). Section 405(g) allows for judicial review only "after a final decision by the Secretary made after a hearing to which he was a party." Id. A "final decision" of the Secretary contains two elements — presentment and exhaustion. Matthews v. Eldridge, 424 U.S. 319, 328 (1976).
Life Source's due process allegations arise under the Act because they are premised on the agency's failure to abide by its own suspension regulations, and are, in essence, claims seeking the reinstatement of Medicare Part B payments. "To contend that such action does not arise under the Act whose benefits are sought is to ignore both the language and substance of the complaint. . . ." Thus, the Medicare Act and its regulations provide the sole source of federal jurisdiction over Medicare disputes. The agency action at issue in this case is the decision to implement and continue the payment suspension. According to the Medicare regulations, because this is not a final agency decision, it cannot be appealed. The suspension, however, "may culminate in an appealable determination [under section 405(h)] . . . if the claims are subsequently denied," or if the provider is subsequently excluded from the Medicare program. In Clarinda Home Health v. Shalala, the Eighth Circuit held that a temporary suspension of Medicare benefits during an ongoing fraud investigation would not trigger jurisdiction under the Social Security Act. The court concluded that once the Secretary makes a final determination, the plaintiff provider will be given a hearing, and eventually the provider will be entitled to judicial review. Therefore, the plaintiff "will have its day in court after the Secretary has rendered her final decision." Similarly, Life Source will have its day in court once the Secretary renders her final decision. Thus, because Life Source will have the opportunity of judicial review after a final determination is made, it may not assert federal-question jurisdiction. Consequently, I conclude there is no federal-question jurisdiction in this case. Life Source, nevertheless, argues that it merely seeks judicial review of the agency's failure to comply with the procedural protections made part of the federal regulations interpreting the Act, and that such action violates the due process clause under the Fifth Amendment of the United States Constitution. In other words, Life Source asserts that review of the deprivation of its due process rights caused by the government's failure to comply with the procedural directives for implementing the suspension, will be precluded if this court holds that it does not have subject-matter jurisdiction.
The language "claim arises under" is construed broadly, to include any claims in which "both the standing and the substantive basis for the presentation" of the claims is the Social Security Act. Weinberger v. Salfi, 422 U.S. 749, 760-61 (1975).
Id. at 769 (1975).
Life Source cannot predicate jurisdiction on the Medicare regulations, 42 C.F.R. § 405.370 et seq.; the regulations solely interpret the Medicare Act and do not provide an independent basis for jurisdiction.
See Heckler v. Ringer, 466 U.S. 602, 615 (1984); Eldridge, 424 U.S. at 327; and Abbey v. Sullivan, 978 F.2d 37, 41-42 (2d Cir. 1992).
42 C.F.R. § 405.375(c); and Neurological Associates, 658 F. Supp. 468, 471 (S.D. Fla. 1987).
Clarinda Home Health, 100 F.3d at 529. According to the Medicare Act and its regulations, appeals are first taken to a carrier fair hearing officer, then to an Administrative Law Judge and the Department of Appeals Board, and finally to a federal district court if the requisite amount in controversy requirements are met. 42 U.S.C. § 1395 ff(b)(1) (b)(2)(B); 42 U.S.C. § 405 (g); 42 C.F.R. § 405.821; and 42 C.F.R. § 405.855-56.
100 F.3d at 530. Moreover, the suspension of payments has been upheld as constitutionally valid. See Karnak Educational Trust v. Bowen, 821 F.2d 1517, 1521 (11th Cir. 1987) (court held that suspension of Medicare payments by the Secretary during an investigation was a constitutional procedure); and Midwest Family Clinic, 998 F. Supp. at 770-71 (court held that a suspension of Medicare payments was constitutionally permissible).
Clarinda Home Health, 100 F.3d at 530. See also Affiliated Professional Home Health Care Agency, 164 F.3d at 285; and Neurological Associates, 658 F. Supp. at 471.
Docket no. 20.
In support of its position, Life Source contends that in Bowen v. Michigan Academy of Family Pediatricians, as harmonized by its recent ruling in Shalala v. Illinois Council on Long Term Care, Inc., the Supreme Court recognized an exception to § 405(h) which is applicable in this case, allowing the court to exercise § 1331 jurisdiction. Specifically, in Michigan Academy the Supreme Court held that § 405(h) does not limit judicial review of claims arising under the Medicare program when there is no other avenue of judicial relief. Life Source maintains that judicial review of its challenges to the suspension of Medicare benefits is not precluded because there is no other avenue of judicial relief. I am not persuaded that Michigan Academy is controlling in this case. Contrary to Life Source's position, Life Source has a viable avenue of judicial review to bring the claims it brings here. Specifically, Life Source can challenge the procedural non-compliance by the government in effectuating the suspension regulations, after the Secretary makes a final determination regarding whether payments should be made to Life Source. While Life Source may not be able to challenge the agency's application of its own regulations, it will be able to challenge and seek remedy on the agency's decision concerning the payment suspension. The Midwest Family Clinic decision is instructive on this point.
476 U.S. 667, 680 (1986).
120 S.Ct. 1084 (2000).
Similar to the claims brought in this case, the plaintiffs in Midwest Family Clinic brought a due process claim arguing they were deprived of due process because they had not been given detailed explanations of the reasons supporting the payment suspension. They argued that because the suspension letter lacked specificity, they could not prepare a meaningful rebuttal to challenge the suspension. The court in Midwest Family Clinic, although refusing to directly rule on the issue, discussed the overwhelming case authority supporting a finding against § 1331 jurisdiction pursuant to 42 U.S.C. § 405(h). Consequently, based on the same case authorities discussed in Midwest Family Clinic, I conclude that jurisdiction is lacking in this case. Further, Life Source has not cited any case authority in support of its position that this court should assert jurisdiction over its due process claims without Life Source first exhausting its administrative remedies. For all these reasons, Life Source's request for injunctive relief is denied for lack of federal question jurisdiction.
Even though Life Source does not seek a waiver of the exhaustion requirement, I find that waiver cannot be granted because Life Source has not raised "colorable constitutional claim[s] collateral to the substantive claim of entitlement." Eldridge, 424 U.S. 330-31.
It is worth noting that even assuming, arguendo, that § 1331 jurisdiction exists, courts have been reluctant to require any more particularization from the government than what has already been provided to Life Source in this case. To require otherwise "would infringe upon the Secretary's administrative jurisdiction," and hamper the impending investigation. See Midwest Family Clinic, 998 F. Supp. at 769-71 (and case authorities cited therein).
Likewise, Life Source may not assert jurisdiction under the APA, 5 U.S.C. § 706. The same logic which prevents a party from using federal-question jurisdiction as a way around §§ 405(g) and 405(h) prevents the party from using the APA for such purpose. So long as Life Source's claims "arise under the Medicare [Act], § 405(h) is the exclusive basis for subject matter jurisdiction." Significantly, in Weinberger v. Salfi, the Supreme Court foreclosed using a constitutional challenge to a provision of the Social Security Act:
See Michigan Ass'n. of Homes and Services for the Aging, Inc., v. Shalala, 127 F.3d 496, 499 (6th Cir. 1997).
Id. See also Ringer, 466 U.S. at 622.
422 U.S. 749, 760-61 (1975). See also Ringer, 466 U.S. at 622; Michigan Ass'n of Homes and Services for the Aging, 127 F.3d at 499.
[The plaintiff's] claim may well `arise under' the APA in the same sense that Salfi's claim arose under the Constitution, but we held in Salfi that the constitutional claim was nonetheless barred by § 405(h). It would be anomalous indeed for this Court to . . . give greater solitude to an APA claim than the Court thought the statute allowed it to give to the constitutional claim in Salfi.
Ringer, 466 U.S. at 622 (Emphasis added).
Since Life Source's claims arise under the Medicare Program, the Social Security Act provides the sole authority for such a claim. Consequently, I conclude there is no jurisdiction under the APA.
Once Life Source exhausts its administrative remedies and its case is ripe for judicial review, the court will examine the agency's final decision in accordance with 42 U.S.C. § 1395oo(f), which incorporates the APA's standard of review, 5 U.S.C. § 704 706(2)(A). See e.g., Hinsdale Hospital Corporation v. Shalala, 50 F.3d 1395, 1398-99 (7th Cir. 1995).
III. Conclusion
Based on the foregoing, I conclude that even though Life Source has made a showing of irreparable injury under the preliminary injunction standard, I lack subject-matter jurisdiction to grant injunctive relief because the suspension of Medicare payments made in this case is not a final agency decision entitled to judicial review under the Social Security Act. Accordingly, Life Source's request for injunctive relief (docket no. 19) is DENIED.