United States District Court, E.D. Missouri, Southeastern Division
NIKKCO L. FORTNER, Plaintiff,
THOMAS E. PRICE, SECRETARY, U.S. DEPT. OF HEALTH AND HUMAN SERVICES, et al., Defendants.
MEMORANDUM AND ORDER
STEPHEN N. LIMBAUGH, JR. UNITED STATES DISTRICT JUDGE
case comes before the Court on defendant United States
Department of Health and Human Services' motion to
dismiss under Federal Rule of Civil Procedure 12(b)(1) (#16).
Plaintiff responded, to which defendant replied. The issues
are briefed and ripe for disposition.
was involved in a motor vehicle accident, during which she
sustained bodily injuries and damages. Treatment for
plaintiff's bodily injuries was provided by defendants
Missouri Delta Medical Center and Dr. Sanders and the costs
for that treatment were covered by defendants United States
Department of Health & Human Services
(“Medicare”) and Missouri Department of Social
Services - MO Healthnet Division (“Medicaid”).
Plaintiff hired a law firm to pursue her claim for damages
resulting from the motor vehicle accident against a
tortfeasor. The insurance carrier providing coverage for the
tortfeasor tendered the policy limit for its liability
coverage “for it to pay as and for the injuries
sustained by the plaintiff” in the accident in the
amount of $51, 000. All of the defendants and plaintiff's
lawyers have liens against the insurance proceeds.
filed this complaint in this Court, allegedly under this
Court's federal question jurisdiction, and asks this
Court to distribute the insurance proceeds by reducing and or
apportioning the lien claims of the defendants because the
claims against the insurance proceeds exceed the total amount
of insurance proceeds available by approximately $40, 000.
Defendant Medicare filed its motion to dismiss and argues
that this Court lacks subject matter jurisdiction over
plaintiff's complaint because plaintiff failed to comply
with the requirements of the Medicare Act. Plaintiff opposes
defendant's motion and although not disputing the
existence of Medicare's lien, argues that the Medicare
Act does not apply under the facts of this case.
Rule of Civil Procedure 12(b)(1) requires dismissal if
the court lacks subject matter jurisdiction over the claim.
“Federal jurisdiction is limited by Article III of the
Constitution to cases or controversies; if a plaintiff lacks
standing to sue, the district court has no subject-matter
jurisdiction.” ABF Freight System, Inc. v.
International Broth. Of Teamsters, 645 F.3d 954, 958
(8th Cir. 2011) (citing Faibisch v. Univ. of Minn.,
304 F.3d 797, 801 (8th Cir. 2002)). Thus, a claim by a party
that lacks standing is properly dismissed pursuant to
Rule 12(b)(1). Cook v. ACS State & Local
Solutions, Inc., 756 F.Supp.2d 1104, 1106 (W.D. Mo.
2010), aff'd, 663 F.3d 989 (8th Cir.2011).
determining whether a plaintiff lacks standing to sue, a
Rule 12(b)(1) motion may challenge the complaint on
its face or on the factual truthfulness of its assertions.
Titus v. Sullivan, 4 F.3d 590, 593 (8th Cir. 1993).
Here, the defendant factually attacks the complaint, meaning
at issue is this Court's jurisdiction, “its very
power to hear the case.” Osborn v. United
States, 918 F.2d 724, 730 (8th Cir. 1990). In ruling on
a Rule 12(b)(1) motion that attacks the existence of subject
matter jurisdiction in fact, “[t]he district court has
the authority to consider matters outside the
pleadings” Drevlow v. Lutheran Church, Missouri
Synod, 991 F.2d 468, 470 (8th Cir. 1993). Further,
“no presumptive truthfulness attaches to the
plaintiff's allegations, and the existence of disputed
material facts will not preclude the trial court from
evaluating for itself the merits of jurisdictional
claims.” Osborn, 918 F.2d at 730. In defending
a factual attack, the plaintiff carries the burden of proof
that jurisdiction exists. Id.
alleges this Court has federal question jurisdiction under 28
U.S.C. § 1331 because “Medicare Secondary Payer
[“MSP”] issues are exclusively within the
province of federal courts.” The MSP provisions, 42
U.S.C. § 1395y(b), require that Medicare be reimbursed
for medical expenses that Medicare has paid on behalf of the
injured party. Medicare is a secondary source of payment and
may make a “conditional payment . . . if a primary plan
. . . has not made or cannot reasonably be expected to make
payment . . . promptly . . . .” 42 U.S.C. §
1395y(b)(2)(B)(i). “Any such payment by the Secretary
shall be conditioned on reimbursement to the appropriate
Trust Fund . . . .” Id. “Thus, Medicare
becomes obligated as a secondary payer only when a
‘primary plan' has not or cannot promptly pay a
claim and expressly reserves the right to reimbursement from
‘a primary plan, and [from] an entity that receives
payment from a primary plan.'” In re
Petition of Korff, Case No. 16-cv-12984 PDB, 2016 WL
4537815 at *4 (E.D. Mich. Aug. 31, 2016) (citing 42 U.S.C.
§ 1395y(b)(2) & (b)(2)(B)(ii)) (emphasis in
tortfeasor against whom a judgment is rendered or settlement
obtained . . . is considered a ‘primary payer'
under the MSP.” Id. (citing Hadden v.
United States, 661 F.3d 298, 300 (6th Cir. 2011)).
See 42 C.F.R. 411.22. Thus, a successful plaintiff
in a civil action that received a settlement or judgment from
the tortfeasor is “an entity that receives payment from
a primary plan, ” e.g. the tortfeasor. Id.
After Medicare makes a conditional payment and the plaintiff
receives a settlement from a tortfeasor, Medicare is entitled
to reimbursement for all costs rendered to the plaintiff
under the MSP and Medicare Act. This is not to say that
Medicare will always pursue or receive the return of all of
its costs. Medicare may reduce or even waive its recovery
under the Medicare Act. See, e.g., 42 U.S.C. §
1395y(b)(2)(B)(v); 42 U.S.C. § 1395gg(c). Judicial
review, as compared to Medicare's own review and
decision, is not available to a party who seeks to bypass the
statutory requirements of the Medicare Act. A plaintiff must
“first have to request that the agency exercise its
discretion to waive its right to collect from the proceeds of
[her] tort suit the medical expenses it had paid on her
behalf.” Walters v. Leavitt, 376 F.Supp.2d
746, 756 (E.D. Mich. 2005) (internal citation omitted).
expressly limited judicial review of Medicare disputes,
including the MSP provisions, to the internal statutory
review mechanism, stating “‘no action against the
United States, the [Secretary] or any officer or employee
thereof, shall be brought under § 1331 . . . to recover
on any claim arising under' the Medicare Act. 42
U.S.C. § 405(h) (incorporated into 42
U.S.C. § 1395(ii).” Self v. Leavitt,
Case. No. 3:06-CV-167 GTE, 2007 WL 1214898 at *3 (Apr. 24,
2007). A case arises under the Medicare Act when “both
the standing and substantive basis for the . . . claim are
the Medicare Act.” Your Home Visiting Nurse
Services, Inc. v. Shalala, 525 U.S. 449, 456 (1999).
When a case arises under the Medicare Act, § 405(h)
“precludes judicial review under § 1331 and
requires channeling virtually all legal claims
through the agency's administrative process before
such claims can be heard in federal court.”
Great Rivers Home Care, Inc. v. Thompson, 170
F.Supp.2d 900, 904 (E.D. Mo. 2001) (citing Shalala v.
Illinois Council on Long Term Care, 529 U.S. 1, 13-14
(2000)) (emphasis added). Only after there has been a final
decision by the Secretary, through the internal
administrative review process, may a party seek judicial
review. 42 U.S.C. § 405(g) & (h).
decision by the secretary may only be made under §
405(g) after there has been a (1) presentment of any claim to
the Secretary and (2) exhaustion of all administrative
remedies under the Act. Heckler v. Ringer, 466 U.S.
602, 617 (1984). The Secretary has the discretion to waive
the latter requirement. Great Rivers Home Care,
Inc., 170 F.Supp.2d at 905. However, the former is
“nonwaivable and nonexcusable, ” meaning
“[a]t a minimum . . . the matter must be presented to
the agency prior to review in a federal court.”
Illinois Council, 529 U.S. at 15, 24.
“Ultimately, judicial review is available in this Court
if [the plaintiff is] dissatisfied with the relief [she
receives] at the agency level.” In re Petition of
Korff, 2016 WL 4537815 at *7.
Lack of Subject Matter Jurisdiction
has the burden of proving subject matter jurisdiction. To
establish jurisdiction, plaintiff stated “Medicare
Secondary Payer issues are exclusively within the province of
the federal courts.” This is true, albeit incomplete.
Additionally, plaintiff cited Bradly v. Sebelius,
621 F.3d 1330 (11th Cir. 2010) for the proposition that
“the amount that Defendant Medicare is paid out of the
settlement proceeds can be determined by the Court.”
However, this Court only has jurisdiction in this action
after the Secretary has (1) been presented with a claim
arising under the Medicare Act and (2) after exhaustion of
all administrative remedies. See42 U.S.C.
§ 405(g) & (h). Plaintiff presents no evidence
that she complied with either ...