Healthcare:  District courts lack jurisdiction to award a Medicare Provider (Doctor) injunctive relief until administrative remedies are exhausted

Healthcare:  District courts lack jurisdiction to award a Medicare Provider (Doctor) injunctive relief until administrative remedies are exhausted


Providers of medical services to Medicare recipients often must navigate claim denials in order to get paid.  Medicare contractors determine provider reimbursement eligibility based on several sources, including local coverage determinations (LCD).  A provider can challenge a contractor’s denial of reimbursement through four levels of administrative review.  In the case of Odell v U.S. Dept of Health & Human Services (“DHH”)[1], a contractor repeatedly invoked a particular LCD in denying reimbursement claims by Dr. Robert Odell, who treats Medicare patients suffering from a neurological pain disorder with a combination of nerve blocks and electrical stimulation.  Dr. Odell successfully challenged some of the denials via administrative review.  He then sued the Secretary of Health and Human Services to enjoin the contractor from using the designated LCD to deny his claims.

The DHH moved to dismiss for lack of subject-matter jurisdiction, arguing that Dr. Odell was required to and did not exhaust his administrative remedies before seeking judicial review.  The district court found that Dr. Odell had failed to exhaust his administrative remedies, but excused the failure on the ground it was futile to challenge hundreds of denials individually before seeking injunctive relief through the courts.  The court then denied DHH’s motion to dismiss and granted the doctor’s injunction.

DHH appealed to the Ninth Circuit, which vacated and remanded the case back to the district court for dismissal, holding that the district court lacked subject-matter jurisdiction.  The Social Security Act, incorporated into the Medicare statute, provides the exclusive mechanism for review of the DHH decision, including through its contractor.  Under the Social Security Act, judicial review is available only after a final agency decision from DHH.  In bypassing full administrative review and seeking a blanket injunction, Dr. Odell failed to meet the presentation requirement for his claims.  The 9th Circuit further stated that the district court lacked jurisdiction to adjudicate past claims because Dr. Odell failed to challenge any particular adverse “final decision” by the agency.  And, the 9th Circuit stated that the district court also lacked jurisdiction to furnish prospective relief as to his future claims because Dr. Odell had not yet presented the appeal of those to the agency.  The 9th Circuit further held that jurisdiction to adjudicate unpresented claims was lacking even if those claims appear to be identical to ones DHH had previously considered.

The 9th Circuit also rejected Dr. Odell’s argument that the presentation requirement improperly deprived him of any opportunity for review, holding that the existing administrative channels were adequate for him (any Provider) to challenge future claims.  Finally, the 9th Circuit court recognized that the claim-by-claim administrative review process imposes a high cost on individual Providers, like Dr. Odell, who must challenge each denial individually; but concluded that “[w]hether that price is worth paying is a judgment for Congress to make.”  Dr. Odell was left with no real remedy other than to challenge one-by-one any claim denials.

So, we all wonder why the cost of healthcare and healthcare insurance is high – consider this red tape.  Epps & Coulson, LLP has successfully challenged claim denials through the administrative process and advised Providers as to the claims process, as well as audits and other healthcare regulatory matters.

[1] Odell v U.S. Dep’t of Health & Human Servs., ___ F.3d ___, 2021 WL 1621311 (9th Cir., Apr 27, 2021.

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