Court Opinion

ID: 6338519
Source: CourtListenerOpinion
Date Created: 2022-05-06 19:01:46.409085+00
Date Added: 2024-06-11T15:49:07.579624
License: Public Domain

In the

    United States Court of Appeals
                 For the Seventh Circuit
                     ____________________
No. 21-1942
ILLINOIS INSURANCE GUARANTY FUND,
                                                  Plaintiff-Appellant,
                                 v.

XAVIER BECERRA,
Secretary of Health and Human Services, et al.,
                                      Defendants-Appellees.
                     ____________________

         Appeal from the United States District Court for the
           Northern District of Illinois, Eastern Division.
          No. 1:20-cv-05920 — Robert W. Gettleman, Judge.
                     ____________________

     ARGUED DECEMBER 3, 2021 — DECIDED MAY 6, 2022
                ____________________

   Before ROVNER, HAMILTON, and JACKSON-AKIWUMI, Circuit
Judges.
    HAMILTON, Circuit Judge. Plaintiﬀ-appellant Illinois Insur-
ance Guaranty Fund is the state-created insolvency insurer for
member insurance companies in Illinois. When a member in-
surer becomes insolvent, the Fund steps in to pay covered
claims. In the case of an insolvent health insurer, many claims
are for patients who are eligible for both Medicare beneﬁts
2                                                     No. 21-1942

and private health insurance. Figuring out how to allocate
overlapping coverage for patients covered by both Medicare
and private health insurance can be challenging in the best of
times. When the insurer becomes insolvent, it gets worse.
    In this case, the Illinois Fund sued the federal government
seeking a determination that it is not subject to reporting re-
quirements under section 111 of the Medicare, Medicaid, and
SCHIP Extension Act of 2007, Pub. L. No. 110-173, § 111, 121
Stat. 2492, 2497–500 (2007), codiﬁed at 42 U.S.C. § 1395y(b)(7)
& (b)(8). Section 111 requires primary plans, including many
private medical insurers, to ﬁle certain reports about plan par-
ticipants and claimants to help the government identify when
a primary plan is responsible for repaying medical expenses
that Medicare covers conditionally. The Medicare Secondary
Payer Act cuts Medicare spending by placing ﬁnancial re-
sponsibility for medical costs with available primary plans
ﬁrst. See United States v. Baxter Int’l, Inc., 345 F.3d 866, 874–78
(11th Cir. 2003) (recounting history of Medicare Secondary
Payer Act); Zinman v. Shalala, 67 F.3d 841, 845 (9th Cir. 1995)
(describing Medicare Secondary Payer Act as serving the
“overarching statutory purpose of reducing Medicare costs”).
Recognizing that time may be of the essence in medical treat-
ment, though, Congress also authorized the government to
make conditional payments to cover medical expenses for
Medicare beneﬁciaries insured by a primary plan, subject to
later reimbursement from a primary plan. See 42 U.S.C.
§ 1395y(b)(2)(B)(i).
   To help the government recoup these conditional pay-
ments, section 111 imposes reporting requirements on health
insurers so that the government can identify the primary plan
responsible for payment. See § 1395y(b)(7) & (b)(8). These
No. 21-1942                                                    3

reporting requirements diﬀer between group health plans
and other types of primary plans, which are placed in a catch-
all category termed “applicable plan.” See id. The Illinois
Fund believes that it is not an “applicable plan” and thus need
not make reports under section 111. It ﬁled this suit seeking a
declaratory judgment to that eﬀect. The defendants moved to
dismiss for lack of subject-matter jurisdiction, arguing in part
that the district court lacked jurisdiction unless and until the
government makes a ﬁnal decision through its administrative
processes. The district court agreed and granted the motion
to dismiss. We agree with the district court that 42 U.S.C.
§ 405(h) forecloses subject-matter jurisdiction in this case. The
Fund can obtain judicial review of its claim in a federal court
only by channeling its appeal through the administrative pro-
cess provided under 42 U.S.C. § 405(g). We recognize that us-
ing the administrative process increases costs and delay for
the Fund, but precedent requires (and prudent policy for the
massive Medicare program is consistent) that we not permit
the Fund’s desired shortcut to federal court. We also explain
below how, under these particular statutes, the usually-wai-
vable defense of failure to exhaust administrative remedies
has become a jurisdictional bar here.
I. Factual and Legal Background
   The Fund’s case centers on the interaction between diﬀer-
ent provisions of the Medicare Act designed to allow the gov-
ernment to recoup medical expenses it has paid conditionally.
We begin by introducing the Fund, the Medicare Secondary
Payer Act, and section 111 reporting. Also, because this suit
was in part a reaction to a similar suit involving the California
insolvency insurer, this section closes with a discussion of the
4                                                     No. 21-1942

California suit and the path the Illinois Fund took to court in
this case.
    A. The Illinois Fund
    The plaintiﬀ Fund is a nonproﬁt, unincorporated legal en-
tity created by the Illinois legislature to manage consequences
for claimants and policyholders when an Illinois insurance
company becomes insolvent. See 215 Ill. Comp. Stat. 5/532(a),
535; Lucas v. Illinois Insurance Guaranty Fund, 367 N.E.2d 469,
470 (Ill. App. 1977). The Fund assumes the obligation for cov-
ered claims against an insolvent insurance company and
helps distribute its assets. See 215 Ill. Comp. Stat. 5/532, 534.3,
537.4; Roth v. Illinois Insurance Guaranty Fund, 852 N.E.2d 289,
295–97 (Ill. App. 2006) (discussing limits on covered claims);
see also California Insurance Guarantee Ass’n v. Azar, 940 F.3d
1061, 1064 (9th Cir. 2019) (summarizing history of state insur-
ance guaranty funds), abrogated on other grounds by R.J.
Reynolds Tobacco Co. v. County of Los Angeles, 29 F.4th 542, 553
n.6 (9th Cir. 2022).
     The Fund pays for its activities by levying assessments on
Illinois insurance companies. See 215 Ill. Comp. Stat. 5/537.6.
As a matter of state law, the Fund is “considered ‘a source of
last resort.’” Illinois Insurance Guaranty Fund v. Virginia Surety
Co., 979 N.E.2d 503, 506 (Ill. App. 2012), quoting Illinois Insur-
ance Guaranty Fund v. Farmland Mutual Insurance Co., 653
N.E.2d 856, 857 (Ill. App. 1995). The Fund generally steps into
the shoes of the insolvent insurer when the Fund assumes the
obligations on a policy, but the Fund is authorized to pay only
“covered claims” as deﬁned by Illinois law. See 215 Ill. Comp.
Stat. 5/534.3, 537.2; Hasemann v. White, 686 N.E.2d 571, 573 (Ill.
1997) (noting that Fund’s liability on a covered claim is subject
to statutory limits, such as a maximum amount); Barbee v.
No. 21-1942                                                                5

Illinois Insurance Guaranty Fund, 915 N.E.2d 871, 873 (Ill. App.
2009).
    B. Medicare as a Secondary Payer
    Medicare is the familiar federal health insurance program
for the elderly and people with disabilities. See 42 U.S.C.
§§ 1395–1395lll; Abraham Lincoln Memorial Hospital v. Sebelius,
698 F.3d 536, 541 (7th Cir. 2012). The Secretary of Health and
Human Services is responsible for Medicare and administers
the program through the Centers for Medicare and Medicaid
Services, also known as CMS.
    Medicare originally provided primary health coverage
even when an insurer such as a group health plan or a liability
insurer might also have been responsible for paying the cost
of a beneﬁciary’s care, with limited exceptions. See Social Se-
curity Amendments of 1965, Pub. L. No. 89-97, § 1862(b), 79
Stat. 286, 325 (barring Medicare from paying for items or ser-
vices under a workers’ compensation law or plan); Zinman, 67
F.3d at 843. That changed in the 1980s when Congress acted
repeatedly to cut costs by making Medicare the secondary
payer for health care when other insurance was available to
cover patients. California Insurance Guarantee Ass’n, 940 F.3d at
1065 & n.1 (summarizing how Medicare Secondary Payer Act
changed Medicare); Baxter Int’l, 345 F.3d at 874–75. 1

    1 See Omnibus Reconciliation Act of 1980, Pub. L. No. 96-499, § 953,
94 Stat. 2599, 2647 (making Medicare the secondary payer for services cov-
ered by automobile or liability insurance policies or plans, or no-fault in-
surance); Deficit Reduction Act of 1984, Pub. L. No. 98-369, § 2344, 98 Stat.
494, 1095–96 (authorizing United States to bring actions against primary
payers who do not reimburse Medicare); Omnibus Budget Reconciliation
Act of 1986, Pub. L. No. 99-509, § 9319(a), 100 Stat. 1874, 2010–11 (making
Medicare the secondary payer for certain persons with disabilities covered
6                                                          No. 21-1942

    The Medicare Secondary Payer Act bars Medicare from
paying for a beneﬁciary’s health care when payment has al-
ready been made by a primary plan but also when such a pay-
ment could reasonably be expected. 42 U.S.C.
§ 1395y(b)(2)(A). In many cases, however, the other payer
may refuse or delay payment. For example, if a Medicare ben-
eﬁciary is injured in a traﬃc accident, disputes about liability
may delay payments by an automobile liability insurer. To
avoid leaving beneﬁciaries helpless in such cases, Congress
authorized Medicare to make immediate payments for care
but required that primary plans later reimburse Medicare
when they bear ultimate responsibility for conditional pay-
ments. § 1395y(b)(2)(B)(i) & (B)(ii).
    Medicare contractors can recoup a conditional payment
owed to CMS by sending the primary plan an initial determi-
nation explaining the reimbursement due. § 1395ﬀ(a)(1); 42
C.F.R. §§ 405.904(a)(2), 405.924(b)(16). If a primary plan disa-
grees with an initial determination, it has a right to appeal
through the administrative review process. 42 U.S.C.
§ 1395y(b)(2)(B)(viii). Congress incorporated provisions of
the Social Security Act into Medicare so that an individual or
primary plan must exhaust administrative remedies before
seeking relief in federal court. See § 1395ii (incorporating bar
on federal-question jurisdiction from § 405(h) of Social Secu-
rity Act); § 1395ﬀ(b)(1)(A) (incorporating provisions for ad-
ministrative and judicial review from § 405(b) and (g) of So-
cial Security Act).

by large group health plans); Omnibus Budget Reconciliation Act of 1989,
Pub. L. No. 101-239, § 6202, 103 Stat. 2106, 2225–35 (introducing “second-
ary payer” term).
No. 21-1942                                                     7

    The appeals process for an initial determination by CMS
has four steps. 42 C.F.R. § 405.904(a)(2). First, the plan can ask
the contractor making initial determinations on behalf of CMS
to perform a redetermination. § 405.940. Next, the plan can
seek reconsideration from a “qualiﬁed independent contrac-
tor.” § 405.960. Then the plan can request a hearing before an
administrative law judge, who conducts a review de novo.
§§ 405.1000, 405.1042. Finally, a plan can seek de novo review
from the Medicare Appeals Council, which issues the Secre-
tary’s ﬁnal decision on the matter. §§ 405.1100, 405.1130.
    Under 42 U.S.C. § 405(b), a district court has jurisdiction
to review a decision by the Medicare Appeals Council. See
also 42 C.F.R. §§ 405.1130, 405.1136(a). Section 405(h) bars fed-
eral-question jurisdiction for such appeals at any point in the
review process. The only statutory source of subject-matter
jurisdiction for an appeal of a repayment demand is § 405(g)’s
grant of jurisdiction to review a ﬁnal administrative decision.
Thus, if a failure to exhaust administrative remedies defeats
jurisdiction under § 405(g), subject-matter jurisdiction is lack-
ing, and failure to exhaust administrative remedies, which is
usually a waivable aﬃrmative defense, becomes a jurisdic-
tional bar.
   C. Medicare’s Section 111 Reporting Requirements
    To seek reimbursement from a private insurer, however,
CMS needs to know that the insurer might provide coverage
for the Medicare patient. In 2007, Congress amended the stat-
ute to require primary plans to ﬁle reports with information
about claimants entitled to Medicare beneﬁts. See Pub. L. No.
110-173, § 111, 121 Stat. at 2497–500. For purposes of these re-
porting requirements, section 111 divides primary plans into
two groups with diﬀerent rules: (i) group health plans, 42
8                                                    No. 21-1942

U.S.C. § 1395y(b)(7), and (ii) “applicable plan[s],” the catch-all
term for other types of primary plans. § 1395y(b)(8).
    In 2012, Congress amended section 111 to give CMS dis-
cretion to impose a penalty of up to $1,000 per day for viola-
tions. The statute requires CMS to issue regulations specify-
ing how these sanctions would be implemented. See Medicare
IVIG Access and Strengthening Medicare and Repaying Tax-
payers Act of 2012, Pub. L. No. 112-242, § 203, 126 Stat. 2374,
2380. In 2013, CMS published an advance notice of proposed
rulemaking, and in 2020, CMS published for comment a pro-
posed rule specifying how the agency would impose penal-
ties for violations of section 111. See Medicare Program; Med-
icare Secondary Payer and Certain Civil Money Penalties, 85
Fed. Reg. 8793 (Feb. 18, 2020); 78 Fed. Reg. 75304 (Dec. 11,
2013).
    In response to comments on the advance notice of pro-
posed rulemaking, CMS noted that it expected the ﬁnal rule
to ﬁt within the existing structure for appeals of civil mone-
tary penalties assessed by the Department of Health and Hu-
man Services. 85 Fed. Reg. at 8795–96, citing 42 C.F.R.
§§ 402.19, 1005.1–.23. CMS also said that the ﬁnal rule, which
has not yet been issued, will be enforced only prospectively.
Id. at 8796.
    D. The California CIGA Litigation
   The California counterpart of the Illinois Fund, the Cali-
fornia Insurance Guarantee Association, known as CIGA,
sued CMS in 2015 to challenge whether it was obliged to re-
imburse Medicare for payments advanced by the government
when the primary insurer had become insolvent. CIGA ar-
gued that it was not a “primary plan” with obligations to
No. 21-1942                                                  9

reimburse Medicare for payments. California Insurance Guar-
antee Ass’n v. Burwell, 227 F. Supp. 3d 1101, 1106 (C.D. Cal.
2017), rev’d, 940 F.3d 1061 (9th Cir. 2019). When CIGA ﬁled
suit, the current four-tier appeals process for reimbursement
demands by CMS was not yet in eﬀect. CMS conceded in that
case that its formal demand letters for repayment amounted
to ﬁnal agency actions subject to judicial review. Id. at 1106
n.2; see also Medicare Program; Right of Appeal for Medicare
Secondary Payer Determinations Relating to Liability Insur-
ance (Including Self-Insurance), No-Fault Insurance, and
Workers’ Compensation Laws and Plans, 80 Fed. Reg. 10611
(Feb. 27, 2015).
   The California district court found that the insurance
plans administered by CIGA were primary plans subject to
reimbursement demands from CMS. California Insurance
Guarantee Ass’n, 940 F.3d at 1066. On appeal, the Ninth Circuit
reversed and agreed with CIGA that it was not a primary plan
and was not obliged to reimburse CMS for conditional pay-
ments. Id. at 1071.
    In March 2020, CIGA asked the government whether the
Ninth Circuit’s determination that it was not a primary plan
meant that CIGA was also not required to ﬁle reports under
section 111. The Director of CMS’s Oﬃce of Financial Man-
agement replied that CIGA no longer had section 111 report-
ing obligations for payments made on behalf of insolvent Cal-
ifornia members.
   E. Procedural History
   Shortly after CMS told CIGA it was oﬀ the hook for section
111 reporting, the Illinois Fund asked the government
whether the logic of the Ninth Circuit’s holding in CIGA
10                                                 No. 21-1942

meant that the Illinois Fund also had no reporting obligations
under section 111. The Director of CMS’s Oﬃce of Financial
Management replied via letter in August 2020 that (i) the Cal-
ifornia Insurance Guarantee Association decision did not apply
to the Illinois Fund; and (ii) the Oﬃce of Financial Manage-
ment would not provide written conﬁrmation that the Fund
is exempt from section 111 reporting obligations.
    The Fund then ﬁled this suit in the district court against
the Secretary of Health and Human Services, the Department,
and CMS. The Fund seeks a declaratory judgment determin-
ing (i) that the Fund is not a primary plan or an applicable
plan subject to section 111 reporting; (ii) that CMS’s August
2020 letter is a ﬁnal agency action under the Administrative
Procedure Act that should be set aside as arbitrary and capri-
cious; and (iii) that the Fund was not required to go through
any existing administrative process to obtain relief.
     Defendants moved to dismiss for lack of standing and lack
of subject-matter jurisdiction. The district court granted the
motion, ﬁnding no Article III standing, no federal-question ju-
risdiction, and no subject-matter jurisdiction under 42 U.S.C.
§ 405(g) because the Fund had failed to exhaust administra-
tive remedies. Illinois Insurance Guaranty Fund v. Cochran, No.
20 C 5920, 2021 WL 1600172, at *2–5 (N.D. Ill. Apr. 23, 2021).
The Fund has appealed, arguing that (i) the district court
erred in ﬁnding no standing when section 111 reporting obli-
gations impose ongoing, present compliance costs; and
(ii) there is subject-matter jurisdiction because no administra-
tive channel exists to appeal the Fund’s status as an applicable
plan.
No. 21-1942                                                    11

II. Discussion
   A. Exhaustion of Administrative Remedies
     We review de novo the issues of law presented by a dis-
missal of a complaint for lack of subject-matter jurisdiction
under Federal Rule of Civil Procedure 12(b)(1). Int’l Union of
Operating Engineers, Local 139 v. Daley, 983 F.3d 287, 294 (7th
Cir. 2020); Fuqua v. U.S. Postal Service, 956 F.3d 961, 964 (7th
Cir. 2020). Subject-matter jurisdiction sometimes depends on
disputed factual issues, and we review for clear error a district
court’s ﬁndings on jurisdictional facts. See City of Chicago ex
rel. Rosenberg v. Redﬂex Traﬃc Systems, Inc., 884 F.3d 798, 802
(7th Cir. 2018). There is no such factual dispute here. We may
aﬃrm the dismissal of a complaint for lack of jurisdiction on
any ground that is supported by the record, at least so long as
the party asserting jurisdiction has had a fair opportunity to
be heard on the issue. See Fuqua, 956 F.3d at 964; see also, e.g.,
American Homeland Title Agency, Inc. v. Robertson, 930 F.3d 806,
810 (7th Cir. 2019).
    Federal courts have long applied the general rule that a
plaintiﬀ must exhaust available administrative remedies be-
fore seeking judicial review. See Myers v. Bethlehem Shipbuild-
ing Corp., 303 U.S. 41, 50–51 & n.9 (1938) (compiling cases).
The exhaustion requirement protects the authority of admin-
istrative agencies and promotes judicial eﬃciency. Woodford
v. Ngo, 548 U.S. 81, 89 (2006). Even when no statutory provi-
sion requires exhaustion, courts apply the doctrine pruden-
tially. 4 Charles H. Koch, Jr. & Richard Murphy, Administra-
tive Law and Practice § 12:21 (3d ed.). This prudential require-
ment can be overcome in some cases of futility and other ex-
ceptions. Id. Congress has codiﬁed administrative exhaustion
as a requirement for judicial review under many regulatory
12                                                    No. 21-1942

regimes, including programs ranging from Social Security,
Medicare, and Medicaid to employment discrimination, envi-
ronmental protection, and immigration.
    In programs like Medicare, governed by the judicial re-
view provisions of the Social Security Act, the Act imposes a
strong administrative exhaustion requirement in 42 U.S.C.
§ 405(g) and (h). Section 405(g) authorizes judicial review of
an agency’s “ﬁnal decision,” and section 405(h) forecloses
other routes to federal court: “No action against the United
States, the Commissioner of Social Security, 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 subchap-
ter.”
    Section 405(h)’s jurisdictional bar extends beyond “ordi-
nary administrative law principles of ‘ripeness’ and ‘exhaus-
tion of administrative remedies.’” Shalala v. Illinois Council on
Long Term Care, Inc., 529 U.S. 1, 12 (2000). Courts consistently
hold that § 405(h) bars judicial review of Medicare claims
made by plaintiﬀs who fail to exhaust available administra-
tive remedies as required by § 405(g). See, e.g., Ancillary Aﬃl-
iated Health Services, Inc. v. Shalala, 165 F.3d 1069, 1070–71 (7th
Cir. 1999); Homewood Professional Care Center, Ltd. v. Heckler,
764 F.2d 1242, 1253 (7th Cir. 1985). Section 405(g) is the only
statutory source of jurisdiction for most Medicare claims.
    The Supreme Court has recognized a narrow exception to
the exhaustion requirement so as to allow federal-question ju-
risdiction for judicial review apart from § 405(g) when there
is simply no other method for a plan or individual to obtain
relief under the Medicare Act. The Fund has not persuaded us
that it can ﬁt this case into that narrow exception, however.
Because the Fund’s failure to exhaust administrative remedies
No. 21-1942                                                            13

means it cannot invoke the grant of subject-matter jurisdiction
in § 405(g), we do not consider the Fund’s standing to sue. 2
    B. Case Law on the Jurisdictional Bar of § 405(h)
   By its terms, § 405(h) bars federal-question jurisdiction un-
der 28 U.S.C. § 1331 for claims arising under the Medicare Act.
See Your Home Visiting Nurse Services, Inc. v. Shalala, 525 U.S.
449, 456 (1999); Mathews v. Eldridge, 424 U.S. 319, 326–27
(1976), citing Weinberger v. Salﬁ, 422 U.S. 749 (1975) (applying
limits of § 405(h) to claim under Social Security Act). In the
overwhelming majority of cases, subject-matter jurisdiction
over a Medicare claim stems only from § 405(g) of the Act,
which requires a party (i) to present the claim to the Secretary;
and (ii) to exhaust administrative remedies. See Eldridge, 424
U.S. at 328, citing Salﬁ, 422 U.S. at 764; Martin v. Shalala, 63
F.3d 497, 502 (7th Cir. 1995). The presentment requirement is
essential and non-waivable, though the agency can waive a
plaintiﬀ’s failure to exhaust some or all of the steps in the ad-
ministrative review process without defeating jurisdiction
under § 405(g). Eldridge, 424 U.S. at 328.

    2 The district court found that the Fund had waived any argument for

federal-question jurisdiction under 28 U.S.C. § 1331 despite the limits of
§ 405(h). The Fund did not present this argument to the district court as
clearly as it should have, but its reliance on the Michigan Academy case,
discussed below, implicitly and necessarily relied on § 1331 jurisdiction.
We therefore elect not to rely on waiver but instead explain why the Fund
cannot take advantage of the Michigan Academy exception to § 405(h). The
district court also found that the Fund had waived its arguments under
the Declaratory Judgment Act and the Administrative Procedure Act. The
Fund has not raised those issues on appeal, and we do not consider them.
14                                                 No. 21-1942

    This rather abstract distinction between presentment and
exhaustion under § 405(g) is counterintuitive and needs some
explanation. In Eldridge, the Supreme Court distinguished
presentment from “the requirement that the administrative
remedies prescribed by the Secretary be exhausted” to em-
phasize the Secretary’s power to waive administrative review
only for claims presented to him. 424 U.S. at 328. Neither the
Secretary nor the court can waive presentment because
§ 405(g) requires a decision, and without presentment the Sec-
retary cannot make any decision at all. See id.
     Courts have not been entirely consistent in how they refer
to the prerequisites for obtaining jurisdiction under § 405(g)
and may refer to it simply as an “exhaustion” requirement
unless presentment is speciﬁcally at issue. See, e.g., Illinois
Council, 529 U.S. at 15 (noting that plaintiﬀ failed to present
its claim to the agency and therefore could not establish juris-
diction under § 405(g)); Ancillary Aﬃliated, 165 F.3d at 1070
(referring to § 405(g) as an “exhaustion requirement”); Martin,
63 F.3d at 503 (accepting district court’s conclusion that the
“nonwaivable presentment prerequisite” of § 405(g) was
met); see also Salﬁ, 422 U.S. at 765–66 (discussing presentment
as part of process of exhausting remedies before Eldridge drew
this distinction).
    This distinction between presentment and exhaustion of
remedies makes no diﬀerence here, however, because CMS
has not waived the exhaustion defense. When the government
invokes the defense, we enforce the exhaustion requirement.
Even styling a claim arising under the Medicare Act as a con-
stitutional challenge does not ordinarily permit a plaintiﬀ to
forgo exhausting administrative remedies. E.g., Ancillary
No. 21-1942                                                  15

Aﬃliated, 165 F.3d at 1070, citing Homewood Professional Care
Center, 764 F.2d at 1253.
    Still, the Fund sees daylight for this case because the Su-
preme Court has left open a narrow path where a party can
show that enforcement of the exhaustion requirement would
make judicial review truly impossible. The Court recognized
this path in Bowen v. Michigan Academy of Family Physicians,
476 U.S. 667, 680–81 (1986), in which it considered an attack
on the validity of a regulation implementing Medicare Part B.
Medicare Part A provides insurance for hospital and other in-
patient care, 42 U.S.C. §§ 1395c to 1395i-6, while Part B pro-
vides supplemental insurance for outpatient medical services
through private insurance carriers. §§ 1395j to 1395w-6. When
Michigan Academy was decided, judicial review was available
under § 405(g) for claims related to an amount of beneﬁts un-
der Part A but not Part B. Amount claims under Part B entitled
a claimant to no more than a “fair hearing” by the insurance
carrier, with no access to judicial or administrative review.
See United States v. Erika, Inc., 456 U.S. 201, 207–08 (1982).
    Michigan Academy distinguished the doctors’ challenge to
the validity of the regulatory methodology used to determine
amounts payable under Part B from challenges to the amount
determinations themselves. Michigan Academy, 476 U.S. at
675–76. Challenges to amount determinations under Part B
were “quite minor matters,” and the Court accepted Con-
gress’s intent to delegate them to private carriers. Id. at 680
(citation omitted). The Court rejected, however, the Secre-
tary’s contention that the Act provided “no [judicial] review
at all” for the doctors’ statutory and constitutional challenges
to the method of determining beneﬁts under Part B. Id. The
Court found a lack of “clear and convincing evidence” needed
16                                                   No. 21-1942

to overcome the strong presumption against prohibiting judi-
cial review altogether. Id. at 680–81 (citation omitted). Con-
gress made this amount/methodology dichotomy irrelevant
in 1986 when it amended the Medicare Act to provide admin-
istrative and judicial review for claims under both Parts A and
B under § 405(g). See Pub. L. No. 99-509, § 9341(a), 100 Stat.
1874, 2037–38.
    A few years later in Illinois Council, the Supreme Court
made clear that the Michigan Academy exception remains nar-
row and will be construed strictly. The Court expressly re-
jected the suggestion that a party could circumvent the ex-
haustion requirement “simply because that party shows that
postponement would mean added inconvenience or cost in an
isolated, particular case.” 529 U.S. at 22. The Court applied a
practical and realistic standard, but it insisted on a showing
that “hardships likely found in many cases [would turn] what
appears to be simply a channeling requirement into complete
preclusion of judicial review.” Id. at 22–23 (emphasis in origi-
nal), citing McNary v. Haitian Refugee Center, Inc., 498 U.S. 479,
496–97 (1991).
     C. Judicial Review Not Completely Foreclosed by § 405(h)
    The Fund’s claims here arise under the Medicare Act
within the meaning of § 405(h). See Ancillary Aﬃliated, 165
F.3d at 1070; see also Salﬁ, 422 U.S. at 760–61. To obtain judi-
cial review via the typical path under § 405(g), the Fund
would need to have (i) presented its claim to the Secretary;
and (ii) exhausted administrative remedies or secured a
waiver. Eldridge, 424 U.S. at 328. Here, the Fund has not ex-
hausted administrative remedies, and CMS has not agreed to
waive exhaustion. As a result, we have no need to consider
whether the Fund’s letter to CMS satisﬁed the presentment
No. 21-1942                                                   17

requirement. In any event, there is no jurisdiction over this
claim under § 405(g). The only way for the Fund’s claim to
move forward in federal court is if an exception to § 405(h)
applies. As was true for the plaintiﬀ in Illinois Council, “with-
out Michigan Academy, the [Fund] cannot win.” 529 U.S. at 15.
    The crux of the Fund’s argument for avoiding § 405(h)’s
jurisdictional bar is that CMS has not yet issued a ﬁnal rule
providing a mechanism for directly challenging section 111
reporting requirements. According to the Fund, this means
that applying § 405(h) would completely preclude judicial re-
view. The argument has some appeal, but a closer look shows
that the Fund could challenge its obligations to ﬁle reports un-
der section 111 by arguing that it is not a “primary plan” dur-
ing administrative review of a speciﬁc demand for reimburse-
ment by Medicare.
    As noted above, section 111 divides primary plans into
two categories with diﬀerent reporting requirements. The
term “primary plan” means (i) a group health plan or large
group health plan, and (ii) a workers’ compensation law or
plan, an automobile or liability insurance policy or plan, in-
cluding a self-insured plan, and no-fault insurance. 42 U.S.C.
§ 1395y(b)(2)(A). Section 111 reporting requirements for
group health plans are speciﬁed in § 1395y(b)(7), and require-
ments for applicable plans in § 1395y(b)(8). The parties do not
argue that the Fund is a group health plan, so the speciﬁcs of
how that term is deﬁned are not relevant here.
   More immediately, “applicable plan” means liability in-
surance (including self-insurance), no-fault insurance, and
workers’ compensation laws or plans. § 1395y(b)(8)(F). Be-
cause the term “primary plan” includes group health plans
and all types of applicable plans, if an entity does not qualify
18                                                  No. 21-1942

as a primary plan, the entity necessarily has no reporting ob-
ligations under section 111.
     The Fund claims there is currently no way to challenge di-
rectly its reporting obligations under section 111 so that ap-
plication of § 405(h) would totally bar judicial review of its
claim. But the Fund can challenge a demand for reimburse-
ment of a conditional payment made by Medicare through the
four-step appeals process described above. See generally 42
C.F.R. §§ 405.900–.1140. During such an administrative ap-
peal, the Fund could argue that it is not a primary plan. See,
e.g., North Carolina Insurance Guaranty Ass’n v. Becerra, No. 20-
CV-522-FL, 2021 WL 4302243, at *9–10 (E.D.N.C. Sept. 21,
2021) (requiring North Carolina insolvency insurer to present
its claim that it is not a primary plan to CMS before obtaining
judicial review), appeal docketed, No. 21-2185 (4th Cir. Oct.
20, 2021).
    If the Fund remained dissatisﬁed with the outcome, it
could obtain judicial review of the question under § 405(g) af-
ter exhausting administrative remedies or (perhaps) obtain-
ing an agreement from CMS to waive the requirement of fur-
ther exhaustion. A determination in any of these administra-
tive or judicial proceedings that the Fund is not a primary
plan would clarify that the Fund has no reporting obligations
under section 111. Nor does it matter that the adjudicator in a
particular step of the administrative process may not be able
or willing to answer whether the Fund is a primary plan: “The
fact that the agency might not provide a hearing for that par-
ticular contention, or may lack the power to provide one is be-
side the point because it is the ‘action’ arising under the
No. 21-1942                                                              19

Medicare Act that must be channeled through the agency.”
Illinois Council, 529 U.S. at 23 (internal citations omitted). 3
    The relevant statutory provisions reveal that a determina-
tion that the Fund is not a primary plan would necessarily
mean that it has no section 111 reporting obligations. While
applying § 405(h) to foreclose federal-question jurisdiction
might cause delay and inconvenience, it would not amount to
a “complete preclusion of judicial review.” 529 U.S. at 23. Ac-
cordingly, the Michigan Academy exception for such complete
preclusion is not available to the Fund here.4
    Our decision does not conﬂict with the Ninth Circuit’s de-
cision in California Insurance Guarantee Association, 940 F.3d
1061. The Ninth Circuit determined that the California insol-
vency insurer was not a primary plan and was not subject to
demands for repayment under the Medicare Secondary Payer
Act. Id. at 1071. Those issues are not presented in this appeal.
The Ninth Circuit found, without elaboration, that the district

    3  The Fund does not allege that it receives no demands for repayment
under the Medicare Secondary Payer Act that could serve as vehicles for
appealing its status as a primary plan. In fact, the Fund informed us that
it is now pursuing an administrative appeal of such a demand. It can pre-
sent its theories in that forum. We do not decide here whether the Michigan
Academy exception to § 405(h)’s jurisdictional bar would be available to an
entity that never receives initial determinations capable of being appealed.
    4 After oral argument, we ordered defendants to submit a letter ad-
dressing whether a determination that the Fund is not a primary plan
“also conclusively determines whether the [Fund] is required to submit
reports under Section 111 of the statute.” CMS responded that if the Fund
“is categorically excluded from being a primary plan, it cannot be an ap-
plicable plan as defined by § 1395y(b)(8)(F) and cannot be responsible for
reporting [under section 111].” Appellees’ Letter at 2. We agree for the
reasons explained above.
20                                                  No. 21-1942

court had jurisdiction under 28 U.S.C. § 1331. Id. at 1066. The
relevant regulation providing an appeals process for primary
plans to challenge reimbursement determinations was not ﬁ-
nalized until after CIGA ﬁled suit, so the initial determina-
tions sent to CIGA were deemed ﬁnal agency actions subject
to judicial review. California Insurance Guarantee Ass’n, 227 F.
Supp. 3d at 1106 n.2; see also 80 Fed. Reg. 10611.
     In contrast, the jurisdictional bar of § 405(h) controls the
Illinois Fund’s claim because it can use the appeals process for
Medicare demands for repayment to challenge its status as a
primary plan. Success in such an appeal would show that the
Fund has no section 111 reporting obligations. Because the po-
tential exception to the administrative channeling require-
ments of § 405(g) and (h) discussed in Michigan Academy and
elaborated upon in Illinois Council is not met here, there is no
federal-question jurisdiction over this case.
    We respect the Fund’s desire to avoid the risk of breaking
the law and incurring penalties, but the ongoing burden of
complying with section 111’s requirements does not entitle
the Fund to evade the Medicare Act’s channeling require-
ments. The Fund cannot obtain judicial review of its claim un-
less it ﬁrst exhausts administrative remedies via § 405(g). We
AFFIRM the district court’s dismissal for lack of subject-mat-
ter jurisdiction.