Appeal from the United States District Court for the Eastern District of Pennsylvania, Civil Action No. 85-4803.
Before: Becker, Mansmann, Circuit Judges, and Teitelbaum, District Judge*fn*
The plaintiff, an association of physicians, seeks judicial review of the decision of the Secretary of Health and Human Services ("HHS") to recoup alleged overpayments for medical services provided to Medicare Part B enrollees by members of the plaintiff association. The Secretary asserts that the services were provided in a non-certified nursing facility and thus should have been classified and reimbursed as nursing home services rather than skilled nursing facility visits. The district court dismissed the action for lack of subject matter jurisdiction.
We agree with the district court that the facts alleged by the plaintiff do not provide jurisdiction under 42 U.S.C. § 1395ff (b)(1)(B) or under 42 U.S.C. § 405(g). However, in light of the recent decision of the Supreme Court in Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 106 S. Ct. 2133, 90 L. Ed. 2d 623 (1986), we will reverse the decision and remand to permit the plaintiff to amend its complaint to allege jurisdiction under 28 U.S.C. § 1331.
The Medicare Program, 42 U.S.C. § 1395 et seq. consists of Part A, which provides for hospital insurance, 42 U.S.C. § 1395c-1395i-2, and Part B, which provides coverage for supplemental medical services, 42 U.S.C. § 1395j-w. Part A benefits are funded by a wage tax and are generally available to all persons who are over the age of 64 or are disabled. Participation in Part B is elective, and benefit payments are funded by enrollees' premiums as well as by federal government appropriations. Individuals enrolled under Part B may request direct reimbursement for medical services or may assign the right to reimbursement to the physician.
Part B is administered by private intermediaries called "carriers" who are authorized to set rates, review claims and make payments on behalf of HEW. 42 U.S.C. § 1395u. Medicare Part B patients or their assignees are paid on the basis of the amounts charged, subject to the carrier's responsibility to establish appropriate "reasonable amounts". 42 U.S.C. § 1395x(v); 42 C.F.R. § 403.501 et. seq. By accepting assignment a physician agrees to charge a patient no more than the reasonable charge determined by the carrier.
The members of the plaintiff association, physicians on staff at the Philadelphia Geriatric Center, rendered medical services to a number of Medicare Part B beneficiaries who assigned their claims to the plaintiff. During the period from October 1, 1980 to September 30, 1982 the plaintiff submitted to the carrier, Blue Shield of Pennsylvania, the assigned claims of fifteen Part B enrollees. The plaintiff was reimbursed at the rate for services performed in a skilled nursing facility. A later audit by the Health Care Financing Administration ("HCFA") revealed that the Philadelphia Geriatric Center had not been a Medicare-certified skilled nursing facility during the period from October 1, 1980 to September 30, 1982.
On instruction of the HCFA the carrier reopened the plaintiff's claims for the period in question and conducted a post-payment review. The carrier determined that because the physician's services had not been rendered in a Medicare-certified skilled nursing facility, the services should have been reimbursed at the lower rate applicable to services performed in a nursing home. The carrier notified the plaintiff that it had been overpaid in the amount of $86,128 and requested repayment.*fn1
When a carrier determines that full reimbursement is not warranted, statute and regulations designate an agency appeal procedure culminating in a "fair hearing" before a hearing officer designated by the carrier. See 42 U.S.C. § 1395u(b)(3)(C); 42 C.F.R. § 405.820 (1980). The plaintiff was given a Medicare fair hearing on April 2, 1985. Relying on an explicit HFCA policy, the hearing officer determined that the medical services provided to the Medicare patients by the members of the plaintiff association had been properly classified by the carrier as nursing home visits. A request for reconsideration was denied.
The plaintiff filed this suit on August 16, 1985 seeking judicial review of the hearing officer's decision. The plaintiff alleges and the defendants admits that the sole basis for the retroactive reduction in the amount of benefits payable to the plaintiff was the determination that the professional services were not rendered in a skilled nursing facility certified by Medicare. Both parties also agree that the services provided by Medical Fund were equivalent to those provided in a skilled nursing facility.
The plaintiff does not assert that the services were rendered in a Medicare-certified facility. It argues instead that the services were rendered in a facility which is certified by Medicaid as a skilled nursing facility and therefore should have been treated as certified for Medicare as well because the statutory requirements are the same. The district court ...