Temple University Hospital v. Secretary United States Dept

PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

____________

No. 21-1293

____________

TEMPLE UNIVERSITY HOSPITAL, INC.,

Appellant

v.

SECRETARY UNITED STATES DEPARTMENT OF

HEALTH AND HUMAN SERVICES; ADMINISTRATOR

CENTERS FOR MEDICARE & MEDICAID SERVICES;

CHAIRMAN MEDICARE GEOGRAPHIC

CLASSIFICATION REVIEW BOARD

____________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. No. 2-20-cv-04533)

District Judge: Honorable Mitchell S. Goldberg

____________

Argued: April 29, 2021

Before: PHIPPS, NYGAARD, and ROTH, Circuit Judges.

(Filed: June 21, 2021)

____________

Joseph D. Glazer [Argued]

THE LAW OFFICE OF JOSEPH D. GLAZER

Suite 200

116 Village Boulevard

Princeton, NJ 08540

Counsel for Temple University Hospital, Inc.

Thomas Pulham [Argued]

UNITED STATES DEPARTMENT OF JUSTICE

APPELLATE SECTION

Room 7323

950 Pennsylvania Avenue, N.W.

Washington, DC 20530

Michael S. Raab

UNITED STATES DEPARTMENT OF JUSTICE

CIVIL DIVISION

Room 7237

950 Pennsylvania Avenue, N.W.

Washington, DC 20530

Counsel for Secretary United States

Department of Health and Human Services;

Administrator Centers for Medicare &

Medicaid Services; Chairman Medicare

Geographic Classification Review Board

2

__________

OPINION OF THE COURT

__________

PHIPPS, Circuit Judge.

This case involves a dispute between a hospital and a

federal agency over Medicare reimbursements. The core

controversy concerns the hospital’s geographical-area

assignment for purposes of the wage index, which is used to

calculate those reimbursements. The hospital, located in the

City of Philadelphia, received a reclassification into the New

York City area, which would sizably increase the hospital’s

Medicare reimbursements due to that area’s higher wage

index. Although a statute makes such reclassifications

effective for three fiscal years, the agency updated the

geographical boundaries for the New York City area before the

close of that period. After doing so, the agency reassigned the

hospital to an area in New Jersey with an appreciably lower

wage index.

As a result of that reassignment, the hospital sued three

agency officials in the Eastern District of Pennsylvania. But

the Medicare Act channels reimbursement disputes through

administrative adjudication as a near-absolute prerequisite to

judicial review. And here, the hospital did not pursue its claim

through administrative adjudication before suing in federal

court. By not following the statutory channeling requirement,

the hospital has no valid basis for subject-matter

jurisdiction. Accordingly, we will vacate the District Court’s

judgment in favor of the agency officials and remand with

3

instructions to dismiss the complaint for lack of subject-matter

jurisdiction.

I. BACKGROUND

A. Statutory and Regulatory Framework

Originally enacted in 1965 and later amended, the Medicare

Act establishes a national health insurance program for persons

65 and older who are eligible for Social Security benefits, as

well as for persons with certain disabilities. See 42 U.S.C.

§ 426(a), (b). See generally Social Security Amendments of

1965 (Medicare Act), tit. XVIII, Pub. L. No. 89-97, 79 Stat.

286. Through the Inpatient Prospective Payment System, the

Medicare Part A Program reimburses hospitals for the

operating costs of providing inpatient healthcare services to

Medicare beneficiaries. See 42 U.S.C. § 1395ww(d)(2); see

also id. § 1395ww(a)(4) (defining “operating costs of inpatient

hospital services”). The amount of the operating-cost

reimbursement is calculated on a per-patient basis using

predetermined, fixed rates for each treatment category. See id.

§ 1395ww(d)(2), (4); 42 C.F.R. § 412.2(a) (detailing the basis

of payment per discharge). Each year, the Secretary of Health

and Human Services sets those fixed reimbursement rates. See

42 U.S.C. § 1395ww(b)(3)(B), (d)(3)(A)–(C); 42 C.F.R.

§ 412.64(d).

Although they are set in advance, Medicare reimbursement

rates are not uniform throughout the nation. Instead, the

Secretary annually adjusts the national reimbursement rate, see

42 U.S.C. § 1395ww(d)(3), based on a wage index for different

geographic areas, see id. § 1395ww(d)(3)(E)(i) (requiring the

Secretary to adjust the proportion of a hospital’s costs

“attributable to wages and wage-related costs” to reflect “the

4

relative hospital wage level in the geographic area of the

hospital compared to the national average hospital wage

level”); 42 C.F.R. § 412.64(h)(1) (“The wage index is updated

annually.”).

To group hospitals into geographic areas for calculating

and applying the wage index, the Secretary has formally

adopted regional designations from the Office of Management

and Budget (OMB). See, e.g., Fiscal Year 2021 Final Rule,1

85 Fed. Reg. 58,432, 58,742 (Sept. 18, 2020); see also Bellevue

Hosp. Ctr. v. Leavitt, 443 F.3d 163, 169 (2d Cir. 2006). OMB

calls those geographical regions Core Based Statistical Areas

or CBSAs. See Standards for Defining Metropolitan and

Micropolitan Statistical Areas, 65 Fed. Reg. 82,228, 82,235–

36 (Dec. 27, 2000). Each CBSA contains a county or counties

with at least one population core of 10,000 persons, which may

be joined with adjacent counties that are socially and

economically integrated. See id. at 82,236; 2010 Standards for

Delineating Metropolitan and Micropolitan Statistical Areas,

75 Fed. Reg. 37,246, 37,251 (June 28, 2010). The Secretary

calculates the annual wage index for each CBSA using “a

1

The full title of the Fiscal Year 2021 Final Rule is “Medicare

Program; Hospital Inpatient Prospective Payment Systems for

Acute Care Hospitals and the Long-Term Care Hospital

Prospective Payment System and Final Policy Changes and

Fiscal Year 2021 Rates; Quality Reporting and Medicare and

Medicaid Promoting Interoperability Programs Requirements

for Eligible Hospitals and Critical Access Hospitals.” Other

relevant proposed and final rules feature titles of similar length.

Such rules are referred to herein, not by their formal titles, but

as proposed or final rules for a given fiscal year.

5

survey of wages and wage-related costs of short-term, acute

care hospitals.” Fiscal Year 2021 Final Rule, 85 Fed. Reg. at

58,742. Then, the Secretary adjusts Medicare reimbursement

rates by the wage index applicable to each CBSA (or rural area

outside any CBSA). See 42 U.S.C. § 1395ww(d)(2)(H),

(d)(3)(E); 42 C.F.R. § 412.64(h).

1. Changes to a Hospital’s Assigned CBSA

As relevant here, a hospital’s assignment to a particular

CBSA may change through either of two events: an order

granting a hospital’s application for geographic reclassification

or reassignment by the Secretary, usually after adoption of

OMB’s revised CBSA geographical boundaries.2

A hospital may request reclassification into another CBSA

through an application to the five-member Medicare

Geographic Classification Review Board. See 42 U.S.C.

§ 1395ww(d)(10). A requirement for reclassification is that

the destination CBSA be within “close proximity” to the

hospital. 42 C.F.R. § 412.230(b). An “urban hospital”

2

The Secretary is not required to adopt OMB’s CBSA

boundaries and may define geographical boundaries

differently for purposes of calculating the wage index. See

Bellevue Hosp., 443 F.3d at 175 (“[T]he statute is silent as to

how this process is to take place, leaving the agency with broad

discretion.”); Fiscal Year 2021 Final Rule, 85 Fed. Reg. at

58,745 (“We concur with commenters that [the agency] is not

bound by statute to adhere to OMB definitions or delineations

in calculating the [Inpatient Prospective Payment System]

wage index.”); see also 42 U.S.C. § 1395ww(d)(3)(E)(i).

6

satisfies this proximity requirement by being within 15 miles

of the target CBSA; a “rural hospital” must be within 35 miles

of the target CBSA. Id. If the Board grants the reclassification

application, then the hospital receives the wage index

applicable to the target CBSA. See 42 U.S.C.

§ 1395ww(d)(10)(C)(i). By statute, a reclassification is

“effective for a period of 3 fiscal years,” unless the hospital

elects to “terminate such reclassification before the end of such

period.” Id. § 1395ww(d)(10)(D)(v). But if the Board denies

the reclassification application, then the hospital may

administratively appeal to the Secretary. See id.

§ 1395ww(d)(10)(C)(iii)(II) (incorporating the administrative

appeal process from the Administrative Procedure Act,

5 U.S.C. § 557(b)). The Secretary’s decision “shall be final

and shall not be subject to judicial review.” Id.

The Secretary may also reassign a hospital into a different

CBSA after adopting revised CBSA boundaries. OMB

typically revises CBSA boundaries every ten years based on

the results of the decennial census, but OMB sometimes makes

interim revisions. See Fiscal Year 2021 Final Rule, 85 Fed.

Reg. at 58,743. When OMB updates the CBSA boundaries,

the Secretary often adopts those new regional groupings and

calculates new wage indexes for the redrawn CBSAs.3 By

doing so, the Secretary resolves the wage index for non-

reclassified hospitals: they receive the wage index for the

3

See, e.g., Fiscal Year 2019 Final Rule, 83 Fed. Reg. 41,144,

41,362–63 (Aug. 17, 2018) (incorporating the updates from

OMB Bulletin No. 17-01, issued between censuses); Fiscal

Year 2015 Final Rule, 79 Fed. Reg. 49,854, 49,951 (Aug. 22,

2014) (incorporating the updates from OMB Bulletin No. 13-

01, issued following publication of data from the 2010 census).

7

CBSA in which they are located. But that does not resolve the

fate of a hospital that was previously reclassified into a CBSA

with later-redrawn boundaries. See Fiscal Year 2021 Final

Rule, 85 Fed. Reg. at 58,771 (explaining that “if CBSAs are

split apart, or if counties shift from one CBSA to another under

the revised OMB delineations, [the agency] must determine

which reclassified area to assign to the hospital for the

remainder of a hospital’s 3-year reclassification period if the

area to which the hospital reclassified split or had counties shift

to another new or modified urban CBSA”). To assign such a

hospital after the redrawing of CBSAs, the Secretary has

followed a most-proximate-county policy. See, e.g., Fiscal

Year 2021 Final Rule, 85 Fed. Reg. at 58,771–72; Fiscal Year

2015 Final Rule, 79 Fed. Reg. 49,854, 49,974–76 (Aug. 22,

2014); Fiscal Year 2005 Final Rule, 69 Fed. Reg. 48,916,

49,054–55 (Aug. 11, 2004). Under that approach, the

Secretary reassigns a previously reclassified hospital to the

redrawn CBSA containing the county from the original CBSA

that is closest to the hospital (as long as that county remains

outside the CBSA in which the hospital is physically located).

See Fiscal Year 2021 Final Rule, 85 Fed. Reg. at 58,771.

2. Challenges to Medicare Reimbursements

The Medicare Act also provides a mechanism for hospitals

to dispute the amount of reimbursement that they receive for

inpatient care. Subject to timing and amount-in-controversy

requirements, see 42 U.S.C. § 1395oo(a)(2)–(3), a hospital that

receives reimbursements for the operating costs of inpatient

services may challenge “a final determination of the Secretary

as to the amount of the payment” through an appeal to another

five-member board, the Provider Reimbursement Review

Board. Id. § 1395oo(a)(1)(A)(ii) (permitting a challenge to the

8

amount of payment made under subsections (b) or (d) of

42 U.S.C. § 1395ww), (h) (defining the composition of the

Provider Reimbursement Review Board); see also id.

§ 1395ww(b) (providing for the computation and adjustment

of payment for “the operating costs of inpatient hospital

services”), (d) (providing the process for determining

prospective rates for inpatient care reimbursements).

Through such an appeal, a hospital may dispute not only

the amount of its reimbursement but also the method for

calculating that amount. See 42 U.S.C. § 1395oo(a)(1)(A)(ii);

see also St. Francis Med. Ctr. v. Shalala, 32 F.3d 805, 812 (3d

Cir. 1994) (recognizing that 42 U.S.C. § 1395oo “provides

avenues by which a provider seeking Part A payments may

contest both the amount of its payments and the methods by

which those payments are calculated”). And because the

method for computing the reimbursement amount involves the

wage index, a hospital may – in challenging “a final

determination” as to the amount of its reimbursement – dispute

the applicable wage index. See, e.g., Good Samaritan Hosp. v.

Shalala, 508 U.S. 402, 407 (1993) (“Pursuant to 42 U.S.C.

§ 1395oo, [six hospitals] filed an appeal to the Provider

Reimbursement Review Board. . . [challenging] the wage

index . . . .”). The Secretary has 60 days from the date of the

Provider Reimbursement Review Board’s decision to revise

the Board’s decision. See 42 U.S.C. § 1395oo(f)(1) (“A

decision of the Board shall be final unless the Secretary, on his

own motion, and within 60 days after the provider of services

is notified of the Board’s decision, reverses, affirms, or

modifies the Board’s decision.”).

Final decisions of the Provider Reimbursement Review

Board are subject to judicial review. A hospital dissatisfied

9

with the Provider Reimbursement Review Board’s decision (or

the Secretary’s revision) has 60 days to file a civil action

challenging it in federal court. See id. To invoke that judicial-

review provision, a hospital must first present the

reimbursement challenge to the Provider Reimbursement

Review Board. See Shalala v. Ill. Council on Long Term Care,

Inc., 529 U.S. 1, 24 (2000) (“At a minimum, however, the

matter must be presented to the agency prior to review in a

federal court.”).

This avenue for judicial review operates in conjunction

with the jurisdiction-stripping provision of the Social Security

Act. See 42 U.S.C. § 405(h). That provision, through its

application to the Medicare Act, see id. § 1395ii, precludes

subject-matter jurisdiction under 28 U.S.C. § 1331 (federal-

question jurisdiction) and 28 U.S.C. § 1346 (jurisdiction over

claims against the United States) for claims “arising under” the

Medicare Act. 42 U.S.C. § 405(h).4

Together, these statutes establish a “channeling

requirement.” Ill. Council, 529 U.S. at 19. Although the

4

Although not relevant to Temple’s present challenge to a

determination in a table addendum to a final rule promulgated

through the notice-and-comment process, the jurisdiction-

stripping provision further diminishes the opportunities for

judicial review of challenges to the Secretary’s “findings and

decision” made “after a hearing.” 42 U.S.C. § 405(h). In such

a circumstance, the Secretary’s “findings and decision” may

not be “reviewed by any person, tribunal, or governmental

agency” except as provided by the Social Security Act and the

Medicare Act. Id.; id. § 1395ii; see also Nichole Med. Equip.

& Supply, Inc. v. TriCenturion, Inc., 694 F.3d 340, 346–47

10

jurisdiction-stripping provision eliminates federal-question

jurisdiction for reimbursement claims arising under the

Medicare Act, it leaves intact the judicial review provision of

the Medicare Act, 42 U.S.C. § 1395oo(f)(1). Thus, as a

general rule, claims for Medicare reimbursement must be

channeled through the Provider Reimbursement Review Board

before they may be challenged in court. See Heckler v. Ringer,

466 U.S. 602, 627 (1984) (“In the best of all worlds, immediate

judicial access for all of these parties might be desirable. But

Congress, in § 405(g) and § 405(h), struck a different balance,

refusing declaratory relief and requiring that administrative

remedies be exhausted before judicial review of the Secretary’s

decisions takes place.”); see also Abington Mem’l Hosp. v.

Heckler, 750 F.2d 242, 244 (3d Cir. 1984) (“Section 405(h) of

the Social Security Act, 42 U.S.C. § 405(h), as incorporated

into the Medicare Act by 42 U.S.C. § 1395ii, removes from the

federal courts any jurisdiction over claims arising under the

Medicare Act for reimbursement, except to the extent allowed

in 42 U.S.C. § 1395oo(f).” (statutory years omitted)).

Although the channeling requirement operates as near-

absolute bar to federal-question jurisdiction for claims arising

under the Medicare Act that have not been challenged

administratively, an exception exists. When presentation of a

challenge to the Provider Reimbursement Review Board

“would not simply channel review through the agency, but

would mean no review at all,” channeling is not required. Ill.

Council, 529 U.S. at 19; see Bowen v. Mich. Acad. of Fam.

(3d Cir. 2012) (holding, in a case challenging the outcome of

an agency hearing, that the “except as herein provided” clause

of § 405(h) “bar[s] virtually all grants of jurisdiction under

Title 28”).

11

Physicians, 476 U.S. 667 (1986) (originating this exception).

This lone exception is quite “narrow.” Taransky v. Sec’y of the

U.S. Dep’t of Health & Hum. Servs., 760 F.3d 307, 321 n.13

(3d Cir. 2014). It applies only when, “as applied generally to

those covered by a particular statutory provision, hardship

likely found in many cases turns what appears to be simply a

channeling requirement into complete preclusion of judicial

review.” Ill. Council, 529 U.S. at 22–23. A postponement of

judicial review that would add “inconvenience or cost in an

isolated, particular case” does not suffice. Id. at 23.

B. Factual Background and Procedural History

Despite Temple University Hospital’s physical location

within the Philadelphia CBSA, this dispute originates from a

redrawing of the New York City CBSA. In September 2018,

OMB redefined the CBSA for New York City to no longer

include three New Jersey counties – Middlesex, Monmouth,

and Ocean.5 Those three counties were combined with a fourth

– Somerset – to create a new CBSA, the New Brunswick-

5

See Off. of Mgmt. & Budget, Exec. Off. of the President,

OMB Bull. No. 18-04, Revised Delineations of Metropolitan

Statistical Areas, Micropolitan Statistical Areas, and

Combined Statistical Areas, and Guidance on Uses of the

Delineations of These Areas 61 (2018) (referring to the New

York City CBSA as the New York-Jersey City-White Plains,

NY-NJ CBSA); see also Fiscal Year 2021 Final Rule, 85 Fed.

Reg. at 58,746.

12

Lakewood, NJ CBSA. See OMB Bull. No 18-04 at 61; see also

Fiscal Year 2021 Final Rule, 85 Fed. Reg. at 58,746.

Before the Secretary decided to adopt OMB’s proposed

changes to these CBSAs, Temple applied for reclassification

into the New York City CBSA. See Reclassification Appl.

(submitted on September 3, 2019) (JA40). To achieve that

result, Temple also requested designation as a rural hospital,

which would enable it to use the 35-mile proximity

requirement (instead of the 15-mile requirement for urban

hospitals). See 42 C.F.R. § 412.230(b). With that designation,

Temple would be within range of Monmouth County, which,

at 34.7 miles away, was the nearest county in the then-defined

New York City CBSA.

On February 21, 2020, still before the Secretary decided to

adopt OMB’s redrawn CBSAs, the Geographic Classification

Review Board granted Temple’s reclassification request.

Under that decision, Temple was to receive the wage index for

the New York City CBSA for three fiscal years – from 2021

through 2023 (October 1, 2020, through September 30, 2023).

See Geographic Classification Rev. Bd. Decision (JA54); see

also 42 U.S.C. § 1395ww(d)(10)(D)(v). That represented an

upgrade to Temple’s wage index: the New York City CBSA

had a wage index of 1.3239 compared to the Philadelphia

CBSA’s wage index of 1.06.

Temple’s success did not last as long as anticipated. Three

months later, the Secretary provided notice of a proposed rule

that would adopt OMB’s 2018 revisions to the CBSAs. See

Fiscal Year 2021 Proposed Rule, 85 Fed. Reg. 32,460, 32,696–

97 (May 29, 2020). Under those proposed revisions,

Monmouth County would transfer out of the New York City

13

CBSA and into the newly formed New Brunswick CBSA. See

OMB Bull. No 18-04 at 61. As part of that notice, the Secretary

proposed reassigning hospitals under the most-proximate-

county policy. See Fiscal Year 2021 Proposed Rule, 85 Fed.

Reg. at 32,717. Of the counties in the original New York City

CBSA, Monmouth County was the closest county to Temple.

Thus, under the proposal, Temple would follow Monmouth

County in its reassignment to the New Brunswick CBSA. That

CBSA, however, had a wage index of 1.0754 – appreciably

lower than that of the New York City CBSA. See id. at 32,720.

The proposed rule also sought to mitigate the effects of the

revised CBSA boundaries. One proposal was a transitional

wage index for affected reclassified hospitals that would cap at

five percent the wage-index decrease for the first year of the

revised CBSAs. See id. at 32,718. Another proposal would

allow a hospital to seek further reassignment to a CBSA that

contained at least one county from its prior reclassified CBSA

– as long as the hospital met the proximity requirements for

that county. See id. at 32,720; see also 42 C.F.R. § 412.230(b).

The notice of the proposed rule also reminded reclassified

hospitals of the opt-out option: they could elect to terminate

reclassification and return to their home CBSA, where they are

physically located. See 85 Fed. Reg. at 32,717.

After publication of that notice, Temple followed a course

not mentioned among the proposed mitigation measures. It

applied for reclassification into another CBSA – the Vineland-

Bridgeton, NJ CBSA – starting in fiscal year 2022. At that

time, the wage index for the Vineland CBSA was 1.224 –

higher than the wage index for the New Brunswick and

Philadelphia CBSAs, but lower than the wage index for the

New York City CBSA. The Geographic Classification Review

14

Board granted that request, enabling Temple’s reclassification

into the Vineland CBSA for fiscal years 2022 through 2024

(October 1, 2021, through September 30, 2024). Temple has

until June 24, 2021 – forty-five days after the notice of

proposed rulemaking for Fiscal Year 2022 – to withdraw from

that reclassification. See 42 C.F.R. § 412.273(c)(1)(ii), Fiscal

Year 2022 Proposed Rule, 86 Fed. Reg. 25,070 (May 10,

2021).

Temple’s reclassification into the Vineland CBSA took on

additional significance after the Secretary issued the final rule

for Fiscal Year 2021. That rule adopted OMB’s redefined New

York City CBSA. See Fiscal Year 2021 Final Rule, 85 Fed.

Reg. at 58,743–44. And through a table addendum to that rule,

the Secretary reassigned Temple to the New Brunswick CBSA.

See id. at 58,778 tbl. 2 (reassigning Temple based on its

Medicare Provider Number (39-0027) and its case number

before the Geographic Classification Review Board

(21C0393)).

That reassignment prompted this lawsuit. Temple sued the

Secretary and two other agency officials, contending that by

statute, see 42 U.S.C. § 1395ww(d)(10)(D)(v), its

reclassification into the New York City CBSA for wage index

purposes should have been effective for three fiscal years –

until September 30, 2023. In resolving the parties’ competing

summary judgment motions, the District Court entered

judgment for the Secretary, reasoning that the Secretary’s

reassignment of Temple to the New Brunswick CBSA

qualified for Chevron deference and must be upheld. See

Temple Univ. Hosp., Inc. v. Azar, 2021 WL 431448, at *5–11

(E.D. Pa. Feb. 8, 2021).

15

Temple then filed this appeal, which has been expedited to

accommodate Temple’s deadline of June 24, 2021, to

withdraw from its reclassification into the Vineland CBSA.

See 42 C.F.R. § 412.273(d)(4). Temple disputes the

application of Chevron deference, which the Secretary

defends. But the Secretary has also introduced a new

dimension to this appeal: he contends that there is no subject-

matter jurisdiction due to the channeling requirement and

Temple’s failure to present its challenge to the Provider

Reimbursement Review Board. In exercising appellate

jurisdiction over the District Court’s “final decision,”

28 U.S.C. § 1291; see Harris v. Kellogg Brown & Root Servs.,

Inc., 618 F.3d 398, 400 (3d Cir. 2010), we will vacate the

judgment and remand with instructions to dismiss the

complaint for lack of subject-matter jurisdiction.

II. DISCUSSION

Federal courts are courts of limited jurisdiction, and

without subject-matter jurisdiction, they lack authority to

address the merits of a case. See Steel Co. v. Citizens for a

Better Env’t, 523 U.S. 83, 94–95 (1998). A challenge to

subject-matter jurisdiction may be raised any time during a

lawsuit (including for the first time on appeal). See, e.g.,

United States v. Cotton, 535 U.S. 625, 630 (2002); Grp.

Against Smog & Pollution, Inc. v. Shenango Inc., 810 F.3d 116,

122 n.6 (3d Cir. 2016).

Here, although the Secretary did not dispute subject-matter

jurisdiction in District Court, that defense has not been waived.

See Fort Bend County v. Davis, 139 S. Ct. 1843, 1849 (2019).

And subject-matter jurisdiction is lacking here. Temple cannot

invoke federal-question jurisdiction due to the Medicare Act’s

16

channeling requirement. The remaining potential

jurisdictional bases that Temple identifies fare no better.

A. The Channeling Requirement Precludes Temple

from Invoking Federal-Question Jurisdiction.

The Medicare Act’s channeling requirement eliminates

federal-question jurisdiction for claims “arising under” the

Medicare Act. See 42 U.S.C. § 405(h); id. § 1395ii. The

Supreme Court has construed the ‘arising under’ language of

the Medicare Act’s channeling requirement “quite broadly.”

Ringer, 466 U.S. at 615. A claim arises under the Medicare

Act when ‘“both the standing and the substantive basis for the

presentation’ of a claim is the Medicare Act.” Ill. Council,

529 U.S. at 12 (quoting Ringer, 466 U.S. at 615); Weinberger

v. Salfi, 422 U.S. 749, 761 (1975); see also Cmty. Oncology

All., Inc. v. Off. of Mgmt. & Budget, 987 F.3d 1137, 1142–43

(D.C. Cir. 2021).6

Temple’s claim satisfies those two elements. First, Temple

has standing to sue based on the Secretary’s action pursuant to

his authority under the Medicare Act. Reassigning Temple

6

For other statutes, involving the jurisdictional balance

between federal and state courts, the Supreme Court has

construed ‘arising under’ differently than it has for the Social

Security Act and the Medicare Act, which instead implicate

administrative law principles, such as ripeness and exhaustion.

Compare Gunn v. Minton, 568 U.S. 251, 257 (2013), Grable

& Sons Metal Prods., Inc. v. Darue Eng’g & Mfg., 545 U.S.

308, 314 (2005), and Am. Well Works Co. v. Layne & Bowler

Co., 241 U.S. 257, 260 (1916), with Ill. Council, 529 U.S. at

12, and Salfi, 422 U.S. at 761.

17

from the New York City CBSA to the New Brunswick CBSA

constitutes an injury-in-fact (a lower wage index), fairly

traceable to the Secretary’s action (the reassignment), and that

injury-in-fact would be redressed by a favorable judicial

decision (setting aside the reassignment). See Valley Forge

Christian Coll. v. Ams. United for Separation of Church &

State, Inc., 454 U.S. 464, 472 (1982) (articulating the three

elements of Article III standing); see also Spokeo, Inc. v.

Robins, 136 S. Ct. 1540, 1547 (2016) (explaining that for

Article III standing, “[t]he plaintiff must have (1) suffered an

injury in fact, (2) that is fairly traceable to the challenged

conduct of the defendant, and (3) that is likely to be redressed

by a favorable judicial decision”). Second, the Medicare Act

provides the substantive basis for Temple’s claim. As

amended, it provides that reclassifications “shall be effective

for a period of 3 fiscal years,” 42 U.S.C.

§ 1395ww(d)(10)(D)(v), and the merits of Temple’s claim

depend on whether the Secretary’s reassignment decision

violated that three-year durational mandate. Thus, Temple

cannot invoke federal-question jurisdiction here because its

challenge to the New Brunswick CBSA reassignment arises

under the Medicare Act.

B. Temple Cannot Avail Itself of the Narrow

Exception to the Channeling Requirement.

Temple contends that it qualifies for the lone exception to

the channeling requirement. That exception applies only when

application of the channeling requirement “would not simply

channel review through the agency, but would mean no review

at all.” Ill. Council, 529 U.S. at 19. The channeling

requirement would have no such effect here. Temple can

dispute its reclassification to the New Brunswick CBSA before

18

the Provider Reimbursement Review Board because the wage

index associated with that CBSA affects the amount of

Temple’s Medicare reimbursements. And under the Medicare

Act, Temple can seek judicial review of the Board’s

determination. See 42 U.S.C. § 1395oo(f)(1) (“Providers shall

have the right to obtain judicial review of any final decision of

the Board . . . by a civil action commenced within 60 days of

the date on which notice of any final decision by the Board . .

. is received.”). Temple tacitly acknowledges as much. The

thrust of its argument is not that it has no opportunity for

judicial review, but rather that it must surrender its subsequent

reclassification to the Vineland CBSA to fully vindicate its

three-year assignment to the New York City CBSA. But that

concern does not trigger the narrow exception to the

channeling requirement because Temple has an opportunity for

judicial review of its reassignment out of the New York City

CBSA. See Ill. Council, 529 U.S. at 22 (explaining that the

channeling requirement cannot be circumvented on the

grounds of “added inconvenience or cost in an isolated,

particular case”); see also Sw. Pharmacy Sols., Inc. v. Ctrs. for

Medicare & Medicaid Servs., 718 F.3d 436, 441 (5th Cir.

2013) (“The fact that a plaintiff would suffer great hardship if

forced to proceed through administrative channels before

obtaining judicial review is insufficient to warrant application

of the Illinois Council exception.”).

Temple’s reference to the COVID-19 pandemic does not

alter this conclusion. Temple offers only conjecture and

speculation for the proposition that the pandemic would have

prevented or critically delayed administrative review of its

claim. Those concerns cannot overcome the near-absolute

force of the channeling requirement – especially considering

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the Provider Reimbursement Review Board’s publicly

announced intention to keep operating on time.

C. None of the Remaining Bases for Subject-Matter

Jurisdiction Have Merit.

No other statutory grant of subject-matter jurisdiction

applies to Temple’s claim. In its complaint, Temple also

identifies the Declaratory Judgment Act, the Administrative

Procedure Act, the mandamus-jurisdiction statute, and the

Medicare Act as potential bases for subject-matter jurisdiction.

The Declaratory Judgment Act, 28 U.S.C. §§ 2201, 2202,

does not independently grant subject-matter jurisdiction. See

Aetna Life Ins. Co. v. Haworth, 300 U.S. 227, 240 (1937)

(“[T]he operation of the Declaratory Judgment Act is

procedural only.”); Allen v. DeBello, 861 F.3d 433, 444 (3d

Cir. 2017) (“The Declaratory Judgment Act does not, however,

provide an independent basis for subject-matter jurisdiction; it

merely defines a remedy.”).

Nor does Temple gain any jurisdictional traction from the

Administrative Procedure Act. Although it waives sovereign

immunity, see 5 U.S.C. § 702, and provides several causes of

action, see, e.g., id. § 706, the Administrative Procedure Act

includes no independent grant of subject-matter jurisdiction,

see Califano v. Sanders, 430 U.S. 99, 107 (1977); Chehazeh v.

Att’y Gen., 666 F.3d 118, 125 n.11 (3d Cir. 2012).

The mandamus-jurisdiction statute, 28 U.S.C. § 1361,

conditions its grant of jurisdiction on the unavailability of

adequate alternative remedies. See 33 Charles Alan Wright &

Arthur R. Miller, Federal Practice and Procedure Judicial

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Review § 8312 (2d ed. Apr. 2021 update) (“To qualify

for mandamus, however, a litigant must satisfy three

requirements that courts have characterized as jurisdictional:

(1) a clear and indisputable right to relief, (2) that the

government agency or official is violating a clear duty to act,

and (3) that no adequate alternative remedy exists.” (citation

and quotation marks omitted)); see also Ringer, 466 U.S. at

616 (“The common-law writ of mandamus, as codified

in 28 U.S.C. § 1361, is intended to provide a remedy for a

plaintiff only if he has exhausted all other avenues of relief . .

. .”); Semper v. Gomez, 747 F.3d 229, 250–51 (3d Cir. 2014).

And here, Temple has an adequate alternative remedy through

administrative appeal to the Provider Reimbursement Review

Board. See 42 U.S.C. § 1395oo(a)(1)(A)(ii); see also St.

Francis Med. Ctr., 32 F.3d at 812.7

Similarly, judicial review under the Medicare Act for

reimbursement claims requires administrative exhaustion. See

42 U.S.C. § 1395oo(f)(1); see also Ill. Council, 529 U.S. at 24.

And Temple did not present its wage-index challenge to the

Provider Reimbursement Review Board. Without such

presentation, the Medicare Act does not authorize judicial

review of Temple’s dispute.

7

The All Writs Act, 28 U.S.C. § 1651(a), likewise does not

provide a basis for jurisdiction over Temple’s request

mandamus relief: that statute does not independently grant

subject-matter jurisdiction. See Clinton v. Goldsmith, 526 U.S.

529, 534–35 (1999); United States v. Apple MacPro Comput.,

851 F.3d 238, 244 (3d Cir. 2017).

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***

In sum, Temple’s challenge to its reassignment to the New

Brunswick CBSA arises under the Medicare Act, and so it is

subject to the Act’s channeling requirement. Under that

requirement, Temple cannot rely on federal-question

jurisdiction as a basis for subject-matter jurisdiction. And

because Temple did not present its claim for administrative

adjudication, it has no other valid basis for subject-matter

jurisdiction. We will therefore vacate the District Court’s

judgment and remand with instructions to dismiss the

complaint for lack of subject-matter jurisdiction.

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