Opinion ID: 212208
Heading Depth: 3
Heading Rank: 1

Heading: Jurisdiction to Issue Prospective Relief

Text: This Court reviews questions of the district court's jurisdiction de novo. See Texas v. United States, 497 F.3d 491, 495 (5th Cir.2007). While the Secretary agrees that Lion timely exhausted its administrative remedies as to its repayment demands for FY06 and FY07, she claims that the district court lacked subject-matter jurisdiction to set aside the Regulation and enjoin her from using it to calculate Lion's cap for future years. She notes that decisions by both this Court and the Supreme Court make apparent that there is no general federal question jurisdiction under 28 U.S.C. § 1331 for Medicare Part A reimbursement cases. See Shalala v. Ill. Council on Long Term Care, Inc., 529 U.S. 1, 10-20, 120 S.Ct. 1084, 146 L.Ed.2d 1 (2000); Dr. John T. MacDonald Found., Inc. v. Califano, 571 F.2d 328, 331 (5th Cir.1978) (en banc). Therefore, she claims, Lion can only seek review of the action of the fiscal intermediary's actions as contrary to law under 42 U.S.C. § 1395oo(f)(1), and only after exhausting those claims administratively. Finally, the Secretary argues that even if the district court has the power to set aside agency action pursuant to the APA, the Regulation itself is not such an agency action, and the district court may only regard the refund demands as such. Lion claims that once the Regulation's validity was properly before the district court pursuant to § 1395oo(f)(1), its review over the question was governed by the APA, notwithstanding restrictions in the Medicare Act. See 5 U.S.C. § 706 (providing that the reviewing court shall decide all relevant questions of law and shall hold unlawful and set aside agency action that was arbitrary, capricious, ... or otherwise not in accordance with law or in excess of statutory ... authority). It asserts that the promulgation of the Regulation is itself agency action that the district court can set aside pursuant to a prospective injunction. The Secretary correctly notes that there is no general federal question jurisdiction under 28 U.S.C. § 1331 in Medicare reimbursement cases. See Dr. John T. MacDonald Found., 571 F.2d at 331. The district court may only hear a claim and grant relief pursuant to the specific jurisdictional provisions of the Medicare Act. See 42 U.S.C. § 1395oo(f)(1); Califano v. Sanders, 430 U.S. 99, 105, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977) (holding that the APA provides no independent grant of subject matter jurisdiction to review agency actions). The Medicare Act states that district courts have jurisdiction to review 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. 42 U.S.C. § 1395oo(f)(1). Each of these prerequisites to judicial review was met for FY06 and FY07Lion was dissatisfied with the fiscal intermediary's calculations made pursuant to the Regulation and properly obtained the PRRB's determination that it was without authority to resolve the question of the Regulation's validity. Once the question of the Regulation's validity was before the district court, the APA provided the district court with the authority to hold the Regulation unlawful and set it aside. See 5 U.S.C. § 706. Because the question of the Regulation's validity was properly before the district court pursuant to 42 U.S.C. § 1395oo(f)(1), no statute precludes judicial review under the APA. See 5 U.S.C. § 701(a). The Secretary, however, cites a number of cases for the proposition that a district court never has authority to provide prospective relief for non-administratively exhausted years, even if it finds the underlying regulation to be invalid. See Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 891, 110 S.Ct. 3177, 111 L.Ed.2d 695 (1990); Hosp. Ass'n of R.I. v. Sec'y of Health & Human Servs., 820 F.2d 533, 539-40 (1st Cir.1987); Riley Hosp. & Benevolent Ass'n v. Bowen, 804 F.2d 302, 305 (5th Cir.1986); Charter Med. Corp. v. Bowen, 788 F.2d 728, 732-35 (11th Cir.1986); Abington Mem'l Hosp. v. Heckler, 750 F.2d 242, 244 (3d Cir.1984); Pac. Coast Med. Enters. v. Harris, 633 F.2d 123, 137-39 (9th Cir.1980). We find that none of these cases compel the conclusion that the Regulation itself cannot be the agency action challenged, or that the district court may not set aside such an invalid regulation. In fact, the APA has defined agency action to include the whole or part of an agency rule. See Nat'l Wildlife Fed'n, 497 U.S. at 882, 110 S.Ct. 3177 (The meaning of `agency action' for purposes of § 702 is set forth in 5 U.S.C. § 551(13) ... which defines the term as `the whole or a part of an agency rule, order, license, sanction, relief, or the equivalent or denial thereof, or failure to act.' (internal citations omitted)). In National Wildlife Federation, the Supreme Court noted that a challenge to a specific order or regulation is quite different than a generic challenge to a program, and therefore that the program of operations did not qualify as agency action within the meaning of the APA. Id. at 890 & n. 2, 110 S.Ct. 3177. Here, however, Lion challenged the facial validity of a specific regulation promulgated by the Secretary and enforced against Lion, not simply a general and amorphous program of operations performed by an agency. Further, this Court's decision in Riley does not preclude the district court's injunction. In Riley, we affirmed the district court's finding that it was without jurisdiction to compel the Secretary to pay interest for years in which the plaintiff has not exhausted its claims before the PRRB. 804 F.2d at 305. This relief would have required the district court to order the agency to compute interest for years in which the plaintiff had not yet exhausted its claims. This is distinct from the relief ordered by the district court here, which merely forbade the Secretary from continuing to apply an invalid regulation. The other cases cited by the Secretary also involve situations where the plaintiffs asked the district court to affirmatively order reimbursement or interest payments for unexhausted years. See Hosp. Ass'n of R.I., 820 F.2d at 539-40; Charter Med. Corp., 788 F.2d at 732; Abington Mem'l Hosp., 750 F.2d at 243-44; Pac. Coast Med. Enters., 633 F.2d at 138-39. In this case, the district court, acting pursuant to the APA, merely enjoined enforcement of an invalid regulation rather than making premature refund determinations for unexhausted years. Here, Lion challenged the validity of a specific regulation, the promulgation and enforcement of which qualifies as agency action. Further, the question of the regulation's validity was properly before the district court pursuant to 42 U.S.C. § 1395oo(f)(1). Therefore, the district court had the authority under § 706 of the APA to enjoin the Secretary from using the Regulation to calculate Lion's aggregate cap amount for any past, present, and future year.