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Matched Legal Cases: ['§ 405', '§ 1395', '§ 405', '§ 405', '§ 1395', '§ 1331', '§ 405', '§ 1331', '§ 1395', '§ 405', '§ 1331', '§ 405', '§ 1331', '§ 405', '§405', '§ 405', '§405', '§ 1331', '§ 405', '§ 1395', '§ 405', '§ 1331', '§ 405', '§ 1331', '§ 405', '§ 1395', '§ 405', '§ 1331', '§ 1331', '§ 1331', '§ 1395', '§ 405', '§ 405', '§ 1395', '§ 1395', '§ 405', '§ 1395', '§ 4201', '§ 1395', '§ 1395', '§ 488', '§ 488', '§ 1395', '§ 431', '§ 488', '§ 1395', '§ 553', '§ 1331', '§ 1395', '§ 1395', '§ 405', '§ 405', '§ 1395', '§ 1320', '§ 405', '§ 405', '§ 405', '§ 405', '§ 405', '§ 1395', '§ 1331', '§ 1331', '§ 1331', '§ 405', '§ 1331', '§ 1331', '§ 416', '§ 405', '§ 1331', '§ 1331', '§ 405', '§ 1331', '§ 405', '§ 405']

Shalala v. Illinois Council on Long Term Care, Inc. - 529 U.S. 1 (2000) :: Justia US Supreme Court Center
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Shalala v. Illinois Council on Long Term Care, Inc. - 529 U.S. 1 (2000)
ATOCTOBER TERM, 1999SyllabusSHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES, ET AL. v. ILLINOIS COUNCIL ON LONG TERM CARE, INC.CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUITNo. 98-1109. Argued November 8, 1999-Decided February 29, 2000Under the Medicare Act's special review provisions, a nursing home that is "dissatisfied ... with a determination described in subsection (b)(2)" is "entitled to a hearing ... to the same extent as is provided in" the Social Security Act, 42 U. S. C. § 405(b), "and to judicial review of the Secretary's final decision after such hearing as is provided in section 405(g) .... " 42 U. S. C. § 1395cc(h)(1) (emphasis added). The crossreferenced subsection (b)(2) gives petitioner Secretary of Health and Human Services (HHS) power to terminate a provider agreement with a home where, for example, she determines that a home has failed to comply substantially with the statute and the regulations. The crossreferenced § 405(b) describes the administrative hearing to which a "dissatisfied" home is entitled, and the cross-referenced § 405(g) provides that the home may obtain federal district court review of the Secretary's "final decision ... made after a hearing .... " Section 405(h), a provision of the Social Security Act incorporated into the Medicare Act by 42 U. S. C. § 1395ii, provides that "[n]o action ... to recover on any claim arising under" the Medicare laws shall be "brought under [28 U. S. C. § ]1331." It channels most, if not all, Medicare claims through this special review system. Respondent, the Illinois Council on Long Term Care, Inc. (Council), an association of nursing homes,
2Syllabusdid not rely on these provisions when it filed suit against, inter alios, petitioners (hereinafter Secretary), challenging the validity of Medicare regulations that impose sanctions or remedies on nursing homes that violate certain substantive standards. Rather, it invoked federalquestion jurisdiction, 28 U. S. C. § 1331. In dismissing for lack of jurisdiction, the Federal District Court found that 42 U. S. C. § 405(h), as interpreted in Weinberger v. Salfi, 422 U. S. 749, and Heckler v. Ringer, 466 U. S. 602, barred a § 1331 suit. The Seventh Circuit reversed, holding that Bowen v. Michigan Academy of Family Physicians, 476 U. S. 667, had significantly modified such earlier case law.Held: Section 405(h), as incorporated by § 1395ii, bars federal-question jurisdiction here. pp. 10-25.(a) Section 405(h) purports to make exclusive § 405(g)'s judicial review method. While its "to recover on any claim arising under" language plainly bars § 1331 review where an individual challenges on any legal ground the agency's denial of a monetary benefit under the Social Security and Medicare Acts, the question here is whether an anticipatory challenge to the lawfulness of a policy, regulation, or statute that might later bar recovery or authorize imposition of a penalty is also an action "to recover on any claim arising under" those Acts. P.lO.(b) Were the Court not to take account of Michigan Academy, § 405(h), as interpreted in Salfi and Ringer, would clearly bar this § 1331 lawsuit. The Court found in the latter cases that § 405(h) applies where "both the standing and the substantive basis for the presentation" of a claim is the Social Security Act, Salfi, supra, at 760-761, or the Medicare Act, Ringer, 466 U. S., at 615. All aspects of a present or future benefits claim must be channeled through the administrative process. Id., at 621-622. As so interpreted, §405(h)'s bar reaches beyond ordinary administrative law principles of "ripeness" and "exhaustion of administrative remedies"-doctrines that normally require channeling a legal challenge through the agency-by preventing the application of exceptions to those doctrines. This nearly absolute channeling requirement assures the agency greater opportunity to apply, interpret, or revise policies, regulations, or statutes without possibly premature interference by individual courts applying "ripeness" and "exhaustion" exceptions case by case. The assurance comes at the price of occasional individual, delay-related hardship, but paying such a price in the context of a massive, complex health and safety program such as Medicare was justified in the judgment of Congress as understood in Salfi and Ringer. Salfi and Ringer cannot be distinguished from the instant
3case. They themselves foreclose distinctions based upon the "potential future" versus "actual present" nature of the claim, the "general legal" versus the "fact-specific" nature of the challenge, the "collateral" versus the "noncollateral" nature of the issues, or the "declaratory" versus "injunctive" nature of the relief sought. Nor can the Court accept a distinction that limits § 405(h)'s scope to claims for monetary benefits or that involve "amounts," as neither the language nor the purposes of §405 support such a distinction. Neither McNary v. Haitian Refugee Center, Inc., 498 U. S. 479, nor Mathews v. Eldridge, 424 U. S. 319, supports the Council's effort to distinguish Salfi and Ringer. The Court's approval of a § 1331 suit against the Immigration and Naturalization Service in McNary rested on the different language of the immigration statute. And Eldridge was a case in which the respondent had complied with, not disregarded, the Social Security Act's special review procedures-specifically the nonwaivable and nonexcusable requirement that an individual present a claim to the agency before raising it in court. The upshot is that the Council's argument must rest primarily upon Michigan Academy. Pp. 11-15.(c) Michigan Academy did not, contrary to the Court of Appeals' holding, modify the Court's earlier holdings by limiting § 405(h)'s scope, as incorporated by § 1395ii, to "amount determinations." That case involved the lawfulness of HHS regulations governing procedures used to calculate Medicare Part B benefits; and the Medicare statute, as it then existed, did not provide for § 405(g) review of such decisions. The Court ruled that this silence did not itself foreclose § 1331 review. In response to the argument that § 405(h) barred § 1331 review, the Court declined to pass in the abstract on the meaning of § 405(h) because that section was made applicable to the Medicare Act "to the same extent as" it is applicable to the Social Security Act by virtue of 42 U. S. C. § 1395ii. The Court interpreted that phrase to foreclose application of § 405(h) where its application would preclude judicial review rather than channel it through the agency. As limited by the Court of Appeals, Michigan Academy would have overturned or dramatically limited earlier precedents such as Salfi and Ringer, and would have created a hardly justifiable distinction between "amount determinations" and many similar HHS determinations. This Court does not normally overturn, or so dramatically limit, earlier authority sub silentio, and it did not do so here. Pp. 15-20.(d) The Council's argument that it falls within the Michigan Academy exception because it can obtain no review at all unless it can obtain § 1331 review is unconvincing. It argues that review is available only after the Secretary terminates a home's provider agreement. But in
4Syllabusher brief and regulations, the Secretary offers a legally permissible interpretation of the statute: that it permits a dissatisfied nursing home to have an administrative hearing on a determination that it has failed to comply substantially with the statute, agreements, or regulations, whether termination or some other remedy is imposed. See, e. g., Chevron U. S. A. Inc. v. Natural Resources Defense Council, Inc., 467 U. S. 837, 843. The Secretary also denies that she engages in any practice that forces a home to submit a corrective plan and sacrifice appeal rights in order to avoid termination, or that penalizes more severely a home that chooses to appeal. Because the Council offers no convincing reason to doubt her description of the agency's practice, the Court need not decide whether a practice that forced homes to abandon legitimate challenges could amount to the practical equivalent of a total denial of judicial review. If, as the Council argues, the regulations unlawfully limit the extent to which the agency will provide the administrative review channel leading to judicial review, its members remain free, after following the special review route, to contest in court the lawfulness of the relevant regulation or statute. That is true even if the agency does not or cannot resolve the particular contention, because it is the "action" arising under the Medicare Act that must be channeled through the agency. The Council finally argues that, as an association speaking on behalf of its injured members, it has no standing to take advantage of the special review channel. However, it is the members' rights to review that are at stake, and the statutes creating the special review channel adequately protect those rights. Pp. 20-24.143 F.3d 1072, reversed.BREYER, J., delivered the OpInIOn of the Court, in which REHNQUIST, C. J., and O'CONNOR, SOUTER, and GINSBURG, JJ., joined. STEVENS, J., post, p. 30, and SCALIA, J., post, p. 31, filed dissenting opinions. THOMAS, J., filed a dissenting opinion, in which STEVENS and KENNEDY, JJ., joined, and in which SCALIA, J., joined except as to Part III, post, p.32.Jeffrey A. Lamken argued the cause for petitioners.With him on the briefs were Solicitor General Waxman, Acting Assistant Attorney General Ogden, Deputy Solicitor General Kneedler, Barbara C. Biddle, Jeffrey Clair, Harriet S. Rabb, and Jeffrey Golland.
5Kimball R. Anderson argued the cause for respondent.With him on the brief were Charles P. Sheets, Bruce R. Braun, and Brian E. Neuffer. *JUSTICE BREYER delivered the opinion of the Court.The question before us is one of jurisdiction. An association of nursing homes sued, inter alios, the Secretary of Health and Human Services (HHS) and another federal party (hereinafter Secretary) in Federal District Court claiming that certain Medicare-related regulations violated various statutes and the Constitution. The association invoked the court's federal-question jurisdiction, 28 U. S. C. § 1331. The District Court dismissed the suit on the ground that it lacked jurisdiction. It believed that a set of special statutory provisions creates a separate, virtually exclusive, system of administrative and judicial review for denials of Medicare claims; and it held that one of those provisions explicitly barred a § 1331 suit. See 42 U. S. C. § 1395ii (incorporating into the Medicare Act 42 U. S. C. § 405(h), which provides that "[n]o action ... to recover on any claim" arising under the Medicare laws shall be "brought under section 1331 ... of title 28"). The Court of Appeals, however, reversed.We conclude that the statutory provision at issue, § 405(h), as incorporated by § 1395ii, bars federal-question jurisdiction here. The association or its members must proceed instead through the special review channel that the Medicare statutes create. See 42 U. S. C. §§ 1395cc(h), (b)(2)(A), 1395ii; §§ 405(b), (g), (h).*Briefs of amici curiae urging affirmance were filed for the American Association of Homes and Services for the Aging by Mark H. Gallant; for the American Health Care Association et al. by Thomas C. Fox and Harvey M. Tettlebaum; for the American Hospital Association by Charles G. Curtis, Jr., and Edward J. Green; and for the American Medical Association et al. by Paul M. Smith, Robert M. Portman, Michael L. Ile, Leonard A. Nelson, Richard N Peterson, Ann E. Allen, Stuart M. Gerson, Saul J. Morse, and Robert J. Kane.
I AWe begin by describing the regulations that the association's lawsuit attacks. Medicare Act Part A provides payment to nursing homes which provide care to Medicare beneficiaries after a stay in a hospital. To receive payment, a home must enter into a provider agreement with the Secretary of HHS, and it must comply with numerous statutory and regulatory requirements. State and federal agencies enforce those requirements through inspections. Inspectors report violations, called "deficiencies." And "deficiencies" lead to the imposition of sanctions or "remedies." See generally § § 1395i-3, 1395cc.The regulations at issue focus on the imposition of sanctions or remedies. They were promulgated in 1994, 59 Fed. Reg. 56116, pursuant to a 1987 law that tightened the substantive standards that Medicare (and Medicaid) imposed upon nursing homes and that significantly broadened the Secretary's authority to impose remedies upon violators. Omnibus Budget Reconciliation Act of 1987, §§ 4201-4218, 101 Stat. 1330-160 to 1330-221 (codified as amended at 42 U. S. C. § 1395i-3 (1994 ed. and Supp. II!)).The remedial regulations (and a related manual) in effect tell Medicare-administering agencies how to impose remedies after inspectors find that a nursing home has violated substantive standards. They divide a nursing home's deficiencies into three categories of seriousness depending upon a deficiency's severity, its prevalence at the home, its relation with other deficiencies, and the home's compliance history. Within each category they list a set of remedies that the agency may, or must, impose. Where, for example, deficiencies "immediately jeopardize the health or safety of ... residents," the Secretary must terminate the home's provider agreement or appoint new, temporary management. Where deficiencies are less serious, the Secretary
7may impose lesser remedies, such as civil penalties, transfer of residents, denial of some or all payment, state monitoring, and the like. Where a nursing home, though deficient in some respects, is in "[s]ubstantial compliance," i. e., where its deficiencies do no more than create a "potential for [causing] minimal harm," the Secretary will impose no sanction or remedy at all. See generally 42 U. S. C. § 1395i-3(h); 42 CFR § 488.301 (1998); § 488.400 et seq.; App. 54, 66 (Manual). The statute and regulations also create various review procedures. 42 U. S. C. §§ 1395cc(b)(2)(A), (h); 42 CFR § 431.151 et seq. (1998); § 488.408(g); 42 CFR pt. 498 (1998).The association's complaint filed in Federal District Court attacked the regulations as unlawful in four basic ways. In its view: (1) certain terms, e. g., "substantial compliance" and "minimal harm," are unconstitutionally vague; (2) the regulations and manual, particularly as implemented, violate statutory requirements seeking enforcement consistency, 42 U. S. C. § 1395i-3(g)(2)(D), and exceed the legislative mandate of the Medicare Act; (3) the regulations create administrative procedures inconsistent with the Federal Constitution's Due Process Clause; and (4) the manual and other agency publications create legislative rules that were not promulgated consistent with the Administrative Procedure Act's demands for "notice and comment" and a statement of "basis and purpose," 5 U. S. C. § 553. See App. 18-19,27-38, 43-49 (Amended Complaint).
BWe next describe the two competing jurisdictional routes through which the association arguably might seek to mount its legal attack. The route it has followed, federal-question jurisdiction, is set forth in 28 U. S. C. § 1331, which simply states that "district courts shall have original jurisdiction of all civil actions arising under the Constitution, laws, or treaties of the United States." The route that it did not follow, the special Medicare review route, is set forth in a complex
8set of statutory provisions, which must be read together. See Appendix, infra. The Medicare Act says that a home"dissatisfied with a determination described in sub section (b)(2) ... shall be entitled to a hearing ... to the same extent as is provided in [the Social Security Act, 42 U. S. C. § ]405(b) ... and to judicial review of the Secretary's final decision after such hearing as is provided in section 405(g) .... " 42 U. S. C. § 1395cc(h)(1) (emphasis added).The cross-referenced subsection (b)(2) gives the Secretary power to terminate an agreement where, for example, the Secretary
"has determined that the provider fails to comply substantially with the provisions [of the Medicare Act] and regulations thereunder .... " § 1395cc(b)(2)(A) (emphasis added).The cross-referenced § 405(b) describes the nature of the administrative hearing to which the Medicare Act entitles a home that is "dissatisfied" with the Secretary's "determination." The cross-referenced § 405(g) provides that a "dissatisfied" home may obtain judicial review in federal district court of "any final decision of the [Secretary] made after a hearing .... " Separate statutes provide for administrative and judicial review of civil monetary penalty assessments. § 1395i-3(h)(2)(B)(ii); §§ 1320a-7a(c)(2), (e).A related Social Security Act provision, § 405(h), channels most, if not all, Medicare claims through this special review system. It says:
vided. No action against the United States, the [Secretary], or any officer or employee thereof shall be brought under section 1331 or 13.1,6 [federal defendant jurisdiction] of title 28 to recover on any claim arising under this subchapter." (Emphasis added.)Section 1395ii makes § 405(h) applicable to the Medicare Act "to the same extent as" it applies to the Social Security Act.
CThe case before us began when the Illinois Council on Long Term Care, Inc. (Council), an association of about 200 Illinois nursing homes participating in the Medicare (or Medicaid) program, filed the complaint we have described, supra, at 7, in Federal District Court. (Medicaid is not at issue in this Court.) The District Court, as we have said, dismissed the complaint for lack of federal-question jurisdiction. No. 96 C 2953 (ND Ill., Mar. 31, 1997), App. to Pet. for Cert. 13a, 15a. In doing so, the court relied upon § 405(h) as interpreted by this Court in Weinberger v. Salfi, 422 U. S. 749 (1975), and Heckler v. Ringer, 466 U. S. 602 (1984). App. to Pet. for Cert. 15a-19a.The Court of Appeals reversed the dismissal. 143 F. 3d 1072 (CA7 1998). In its view, a later case, Bowen v. Michigan Academy of Family Physicians, 476 U. S. 667 (1986), had significantly modified this Court's earlier case law. Other Circuits have understood Michigan Academy differently. See Michigan Assn. of Homes and Servs. for the Aging v. Shalala, 127 F.3d 496, 500-501 (CA6 1997); American Academy of Dermatology v. HHS, 118 F.3d 1495,14991501 (CAll 1997); St. Francis Medical Center v. Shalala, 32 F.3d 805, 812-813 (CA3 1994), cert. denied, 514 U. S. 1016 (1995); Farkas v. Blue Cross & Blue Shield, 24 F.3d 853, 855-860 (CA6 1994); Abbey v. Sullivan, 978 F.2d 37, 41-44 (CA2 1992); National Kidney Patients Assn. v. Sullivan, 958 F.2d 1127, 1130-1134 (CADC 1992), cert. denied,
10506 U. S. 1049 (1993). We granted certiorari to resolve those differences.
IISection 405(h) purports to make exclusive the judicial review method set forth in § 405(g). Its second sentence says that "[n]o findings of fact or decision of the [Secretary] shall be reviewed by any person, tribunal, or governmental agency except as herein provided." § 405(h). Its third sentence, directly at issue here, says that "[n]o action against the United States, the [Secretary], 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." (Emphasis added.)The scope of the italicized language "to recover on any claim arising under" the Social Security (or, as incorporated through § 1395ii, the Medicare) Act is, if read alone, uncertain. Those words clearly apply in a typical Social Security or Medicare benefits case, where an individual seeks a monetary benefit from the agency (say, a disability payment, or payment for some medical procedure), the agency denies the benefit, and the individual challenges the lawfulness of that denial. The statute plainly bars § 1331 review in such a case, irrespective of whether the individual challenges the agency's denial on evidentiary, rule-related, statutory, constitutional, or other legal grounds. But does the statute's bar apply when one who might later seek money or some other benefit from (or contest the imposition of a penalty by) the agency challenges in advance (in a § 1331 action) the lawfulness of a policy, regulation, or statute that might later bar recovery of that benefit (or authorize the imposition of the penalty)? Suppose, as here, a group of such individuals, needing advance knowledge for planning purposes, together bring a § 1331 action challenging such a rule or regulation on general legal grounds. Is such an action one "to recover on any claim arising under" the Social Security or Medicare Acts? That, in effect, is the question before us.
11IIIIn answering the question, we temporarily put the case on which the Court of Appeals relied, Michigan Academy, supra, to the side. Were we not to take account of that case, § 405(h) as interpreted by the Court's earlier cases of Weinberger v. Salfi, supra, and Heckler v. Ringer, supra, would clearly bar this § 1331 lawsuit.In Salfi, a mother and a daughter, filing on behalf of themselves and a class of individuals, brought a § 1331 action challenging the constitutionality of a statutory provision that, if valid, would deny them Social Security benefits. See 42 U. S. C. §§ 416(c)(5), (e)(2) (imposing a duration-ofrelationship Social Security eligibility requirement for surviving wives and stepchildren of deceased wage earners). The mother and daughter had appeared before the agency but had not completed its processes. The class presumably included some who had, and some who had not, appeared before the agency; the complaint did not say. This Court held that § 405(h) barred § 1331 jurisdiction for all members of the class because "it is the Social Security Act which provides both the standing and the substantive basis for the presentation of thee] constitutional contentions." Salfi, supra, at 760-761. The Court added that the bar applies "irrespective of whether resort to judicial processes is necessitated by discretionary decisions of the Secretary or by his nondiscretionary application of allegedly unconstitutional statutory restrictions." 422 U. S., at 762. It also pointed out that the bar did not "preclude constitutional challenges," but simply "require[d] that they be brought" under the same "jurisdictional grants" and "in conformity with the same standards" applicable "to nonconstitutional claims arising under the Act." Ibid.We concede that the Court also pointed to certain special features of the case not present here. The plaintiff class had asked for relief that included a direction to the Secretary to pay Social Security benefits to those entitled to them but for
12the challenged provision. See id., at 761. And the Court thought this fact helped make clear that the action arose "under the Act whose benefits [were] sought." Ibid. But in a later case, Ringer, the Court reached a similar result despite the absence of any request for such relief. See 466 U. S., at 616, 623.In Ringer, four individuals brought a § 1331 action challenging the lawfulness (under statutes and the Constitution) of the agency's determination not to provide Medicare Part A reimbursement to those who had undergone a particular medical operation. The Court held that § 405(h) barred § 1331 jurisdiction over the action, even though the challenge was in part to the agency's procedures, the relief requested amounted simply to a declaration of invalidity (not an order requiring payment), and one plaintiff had as yet no valid claim for reimbursement because he had not even undergone the operation and would likely never do so unless a court set aside as unlawful the challenged agency "no reimbursement" determination. See id., at 614-616, 621-623. The Court reiterated that § 405(h) applies where "both the standing and the substantive basis for the presentation" of a claim is the Medicare Act, id., at 615 (quoting Salfi, 422 U. S., at 760-761) (internal quotation marks omitted), adding that a "claim for future benefits" is a § 405(h) "claim," 466 U. S., at 621-622, and that "all aspects" of any such present or future claim must be "channeled" through the administrative process, id., at 614. See also Your Home Visiting Nurse Services, Inc. v. Shalala, 525 U. S. 449, 456 (1999); Califano v. Sanders, 430 U. S. 99, 103-104, n. 3 (1977).As so interpreted, the bar