Heckler v. Ringer
466 U.S. 602 (1984)
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Rule of Law:
Claims challenging the validity of a Medicare policy, even if styled as procedural, are considered 'claims arising under' the Medicare Act. Consequently, federal courts lack subject-matter jurisdiction until claimants have fully exhausted the administrative remedies prescribed by the Social Security Act.
Facts:
- The Secretary of Health and Human Services (Secretary), who administers Medicare, determined that a surgical procedure known as bilateral carotid body resection (BCBR) was not 'reasonable and necessary' for treating respiratory distress.
- In January 1979, the Secretary instructed fiscal intermediaries to deny all Medicare claims for BCBR surgery.
- Despite this instruction, Administrative Law Judges (ALJs), who were not bound by it, consistently ruled in favor of individual claimants who appealed the denials.
- In response, on October 28, 1980, the Secretary issued a formal, binding ruling prohibiting ALJs and the Appeals Council from ordering Medicare payments for BCBR procedures performed after that date.
- Respondents Sanford Holmes, Norman Webster-Zieber, and Jean Vescio underwent BCBR surgery before the October 28, 1980 ruling and had their initial claims for reimbursement denied.
- Respondent Freeman Ringer was advised by his physician to undergo BCBR surgery but did not have the procedure, claiming he could not afford it without a prior guarantee of Medicare coverage.
Procedural Posture:
- Respondents filed suit against the Secretary of Health and Human Services in the United States District Court for the Central District of California.
- After the Secretary issued a formal ruling on BCBR coverage, respondents amended their complaint to challenge that ruling as well.
- The District Court dismissed the complaint in its entirety for lack of subject-matter jurisdiction, holding that the claims must first be exhausted through the administrative process.
- Respondents, as appellants, appealed the dismissal to the United States Court of Appeals for the Ninth Circuit.
- The Court of Appeals for the Ninth Circuit reversed, finding jurisdiction was proper for the procedural claims and that exhaustion would be futile for the substantive claims.
- The Secretary, as petitioner, successfully sought a writ of certiorari from the United States Supreme Court.
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Issue:
Does 42 U.S.C. § 405(h), incorporated into the Medicare Act, bar federal district courts from exercising federal-question jurisdiction to review a generally applicable administrative rule governing Medicare coverage before the claimants have exhausted their administrative remedies?
Opinions:
Majority - Justice Rehnquist
Yes, 42 U.S.C. § 405(h) bars federal-question jurisdiction over these claims until administrative remedies are exhausted. All aspects of a claimant's challenge to a Medicare policy determination are considered 'claims arising under' the Medicare Act and must be channeled through the administrative review process established by Congress. The Court reasoned that the respondents' claims, whether characterized as 'procedural' or 'substantive,' were 'inextricably intertwined' with their ultimate goal of obtaining payment for BCBR surgery. As such, they 'arise under' the Medicare Act. The statute, specifically 42 U.S.C. § 405(h), makes the administrative review process outlined in § 405(g) the sole avenue for judicial review, thereby precluding jurisdiction under the general federal-question statute, 28 U.S.C. § 1331. For the three respondents who had the surgery, exhaustion was not futile because the Secretary's formal ruling did not apply to them. For respondent Ringer, who had not had the surgery, allowing a pre-procedure lawsuit would invite claimants to bypass the entire administrative scheme with declaratory judgment actions. Ringer failed to satisfy the nonwaivable jurisdictional requirement of § 405(g) because he had not yet undergone the procedure and thus had not presented a concrete claim for reimbursement to the Secretary.
Concurring-in-part-and-dissenting-in-part - Justice Stevens
Yes as to the three respondents who underwent surgery, but No as to respondent Ringer. The dissent agreed that the three respondents who had the surgery before the formal ruling should be required to exhaust their administrative remedies. However, for respondent Ringer, the majority's holding creates an unjustifiable 'catch-22' where he cannot challenge the Secretary's rule until he has the surgery, but he cannot afford the surgery because of the rule. Ringer's claim does not 'arise under' the Medicare Act within the meaning of § 405(h) because he is not seeking to 'recover on any claim' for payment, but rather to invalidate a procedural rule that prevents him from ever being able to file such a claim. Alternatively, even if § 405(g) were the only path, Ringer has satisfied its requirements: the Secretary's formal rule constitutes a 'final decision' (the non-waivable element), and requiring him to have an operation he cannot afford to begin the process makes exhaustion futile and constitutes an irreparable injury (satisfying the waivable elements).
Analysis:
This decision solidifies the jurisdictional exclusivity of the Social Security Act's review scheme, significantly limiting access to federal courts for claimants challenging Medicare and Social Security policies. By broadly defining 'claims arising under' the Act to include procedural and even constitutional challenges that are 'inextricably intertwined' with a claim for benefits, the Court effectively closed off federal-question and mandamus jurisdiction as alternative avenues for judicial review. The ruling reinforces the primacy of administrative exhaustion, requiring claimants to navigate the entire agency appeals process before seeking relief in court. The case has a significant impact on public benefits litigation, forcing potential plaintiffs to incur the cost of a service or otherwise present a concrete, denied claim before they can challenge the legality of the agency's underlying policy, even when that policy appears to create insurmountable barriers.
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