Noridian's overpayment determination and provide an administrative
A. STANDARD OF REVIEW
The Secretary moves to dismiss under Rule 12(b)(1) of the Federal Rules
of Civil Procedure, asserting lack of subject matter jurisdiction.
Caremark, as the plaintiff asserting proper jurisdiction, has the burden
of establishing this Court's subject matter jurisdiction by a
preponderance of the evidence. See Luckett v. Bure, 290 F.3d 493, 497-98
(2nd Cir. 2002); Makarova v. United States, 201 F.3d 110, 113 (2nd Cir.
B. JURISDICTION UNDER 42 U.S.C. § 1395ff(b)AND 405(g)
Caremark asserts jurisdiction under the Medicare Act. Sections
1395ff(b)(1)(A) and 405(g) together grant the district court jurisdiction
to review a "final decision of the [Secretary] made after a hearing. . ."
On this question, the United States Supreme Court has explained that
"[t]o obtain a `final decision' from the Secretary, a claimant is
required to exhaust his administrative remedies by proceeding through all
three stages of the administrative appeal process. Only a claimant who
proceeds through all three stages receives a final decision from the
Secretary." Bowen v. New York, 476 U.S. 467, 483 (1986). This
requirement, according to the Supreme Court, is "central to the requisite
grant of subject-matter jurisdiction — the statute empowers the
district courts to review a particular type of decision by the
Secretary, that type being those which are `final' and `made after a
hearing.'" Weinburger v. Stalfi, 422 U.S. 749, 764 (1975). In this case,
Caremark's passage through the stages of administrative appeal was
derailed from the start by its untimely request for a review of
Noridian's overpayment determination, which Caremark itself admits was
made after the six month limitations period prescribed by §
405.807(c). Having failed to proceed through any stage in the
administrative appeals process, let alone all of them, Caremark failed to
exhaust its administrative relief options and failed to obtain a final
decision from the Secretary; Noridian's initial overpayment
determination, occurring prior to the administrative appeals process,
does not constitute a final decision.
Caremark argues that the exhaustion requirement is obviated by the
substance of its challenge to Noridian's overpayment determination, which
Caremark couches in due process terms. Caremark argues that Noridian's
determination did not comply with the Secretary's regulations and,
accordingly, deprived Caremark of due process. Caremark argues that
because constitutional challenges to administrative proceedings can be
brought without exhausting the available avenues of administrative
relief, the exhaustion requirement is obviated here and the Court has
jurisdiction. (Plaintiff's Memorandum of Law In Opposition To Defendant's
Motion To Dismiss dated May 30, 2002 ("Pl. Br."), at 5.)
Caremark's assertion lacks merit. Its vague invocation of due process
notwithstanding, Caremark's complaint in substance is with Noridian's
alleged misapplication of applicable regulations in reaching its
determination of overpayment. Interpreting prior Supreme Court holdings
on the matter, the Second Circuit concluded that "federal jurisdiction
exists where there is a challenge to the validity of an agency rule or
regulation. . . but jurisdiction is lacking where the claim is merely
that the insurance carrier misapplied or misinterpreted valid rules and
regulations. . . ." Kuritzky v. Blue Shield of Western New York, Inc.,
850 F.2d 126, 127, (2nd Cir. 1988) (citations omitted); see Walsh v.
McGee, 899 F. Supp. 1232, 1238-39 (S.D.N.Y. 1995) (same); Abbey v.
Sullivan, 788 F. Supp. 165, 170 (S.D.N.Y. 1992) (same). Here, Caremark
says nothing about invalid rules or regulations but, rather, that
applicable regulations were misapplied or ignored. (See, e.g., Pl. Br. at
5, 6 ("Noridian failed to comply with the Medicare regulations, and, in
fact, violated its own regulations.") ("[Noridian] was not proceeding
according to the regulations. . . . ").)
For the reasons discussed above, the Court concludes that
42 U.S.C. § 1395ff(b) and 405(g) do not provide a basis for subject
matter jurisdiction over Caremark's claims.
C. JURISDICTION IN MANDAMUS
Caremark also endeavors to proceed under this Court's mandamus power,
codified at 28 U.S.C. § 1361, which grants this Court "original
jurisdiction of any action in the nature of mandamus to compel an officer
or employee of the United States or any agency thereof to perform a duty
owed to the plaintiff." Mandamus is an "extraordinary writ" whose power
must be exercised cautiously. See Moses H. Cone Mem'l Hosp. v. Mercury
Constr. Corp., 460 U.S. 1, 18 (1983); Agenda v. Texaco, 241 F.3d 194, 200
(2nd Cir. 2001).
The Second Circuit has instructed that to merit mandamus relief, a
party "must show that he or she lacks an adequate alternative means to
obtain the relief sought, and must demonstrate a clear and indisputable
right to the issuance of the writ, amounting to a clear abuse of
discretion or usurpation of. . . power." In re Steinhardt Partners,
L.P., 9 F.3d 230, 233-34 (2nd Cir. 1993 (citing Mallard v. United States
District Court, 490 U.S. 296, 309 (1989)). The Supreme Court has further
elaborated that the "common law writ of mandamus, as codified in
28 U.S.C. § 1361, is intended to provide a remedy for a plaintiff
only if he has exhausted all other avenues of relief and only if the
defendant owes him a clear nondiscretionary duty." Heckler v. Ringer,
466 U.S. 602, 616 (1982).
As discussed in Section II.B supra, Caremark failed to exhaust its
administrative relief options by failing to request a carrier review in a
timely manner, that is, within six months of the overpayment
notification. Caremark admits as much in its February 15, 2001 letter
seeking a "reopening and reversal" of this determination, wherein it
blamed its tardiness on an errant employee.
Additionally, Caremark's requested reopening of the matter of
Noridian's overpayment determination is not a proper subject of mandamus
relief because a carrier's decision to reopen a prior determination, by
the plain language of 42 C.F.R. § 405.841, is not nondiscretionary.
See 42 C.F.R. § 405.841 ("An initial or review determination. . .
may be reopened. . . ." (emphasis added)); Your Home Visiting Nurse
Serv., Inc. v. Shalala, 525 U.S. 449, 456-57 (1999) ("The reopening
regulations do not require reopening, but merely permit it."); Good
Samaritan Hosp. Reg'l Med. Ctr. v. Shalala, 894 F. Supp. 683, 695
(S.D.N.Y. 1995) ("[A] decision to reopen is completely within the
province of the intermediary."). For these reasons, Caremark has failed to
establish the prerequisites for jurisdiction in mandamus.
D. JURISDICTION UNDER THE ADMINISTRATIVE PROCEDURE ACT
Caremark also asserts subject matter jurisdiction pursuant to the APA
Noridian's decision not to reopen and reexamine its initial
determination of overpayment under 42 C.F.R. § 405.841. The Court
rejects Caremark's assertion.
The APA, by its own terms, does not apply to "agency action [that] is
committed to agency discretion by law." 5 U.S.C. § 701(a)(2). Section
405.841 provides, in relevant part: "An initial or review
determination. . . may be reopened. . . ." (emphasis added). As
discussed in Section II.C supra, the Supreme Court has ruled that "[t]he
reopening regulations do not require reopening, but merely permit it." Your
Home, 525 U.S. at 456-57. The Supreme Court in Your Home went on
specifically to hold, regarding the APA, that "the decision whether to
reopen. . . is committed to the agency discretion by law within the meaning
of the Administrative Procedure Act, and hence is unreviewable." Id.
(citations omitted) (internal quotations omitted) ("In addition, however, we
have long held that this provision is not an independent grant of
subject-matter jurisdiction." (citing Califino v. Sanders,
430 U.S. 99 (1977))); see also Abbey,
978 F.2d at 42-43 (in rejecting assertion of federal question
jurisdiction under 28 U.S.C. § 1331, Second Circuit held that "the
Social Security Act provides the exclusive authority for exercising
jurisdiction over [Medicare] Part B disputes.").
For these reasons, the Court concludes that the APA does not provide a
proper basis to assert subject matter jurisdiction over Caremark's
III. CONCLUSION AND ORDER
For the reasons discussed above, it is hereby
ORDERED that the Secretary's motion to dismiss for lack-of subject
matter jurisdiction pursuant to Rule 12(b)(1) of the Federal Rules of
Civil Procedure is GRANTED.
The Clerk of Court is directed to close this case.