# Opposition Brief — Lifestar Ambulance Service, Inc. v. United States

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 2005
- **Citation:** 543 U.S. 1050

## Text

oO
No. 04-430

Jn the Supreme Court of the Gunited States

LIFESTAR AMBULANCE SERVICE, INC., ET AL..,
PETITIONERS

UNITED STATES OF AMERICA, ET AL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS
IN OPPOSITION

PAUL D. CLEMENT
Acting Solicitor General
Counsel of Record
PETER D. KEISLER
Assistant Attorney General
BARBARA C. BIDDLE
JEFFREY CLAIR
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

QUESTION PRESENTED

Whether the district court could properly exercise
mandamus jurisdiction under 28 U.S.C. 1361 over peti-
tioners’ challenge to Medicare regulations governing
the reimbursement of ambulance services.

(I)

TABLE OF CONTENTS

Page
NE TUNIUO sissiinnicintinesiiehintlebeh isaac eadidaicaie 1
Jurisdiction R 1
SIE siiiahieiscsiindcsecichladiatatieniennentndnionisincnen on 1
Argument ...........04 : ‘ 6
TINE eli caiptehieanihienitehchetncaesereninicindanmsatainadienibeinheninitonntaheedion 12
TABLE OF AUTHORITIES
Cases:
Belles v. Schweiker, 720 F.2d 509 (8th Cir. 1983) ............ 9
Burnett v. Bowen, 830 F.2d 731 (7th Cir. 1987) .............. )
Ellis v. Blum, 643 F.2d 68 (2d Cir. 1981) ........ccssessseeeeee 9
Heckler v. Ringer, 466 U.S. 602 (1984) 8, 10, 11
Mallard v. United States Dist. Ct., 490 U.S. 296

(1989) .... 6
Monmouth Med. Ctr. v. Thompson, 257 F.3d 807

(D.C. Cir. 2001) on 9
Roche v. Evaporated Milk Ass’n, 319 US. 21

(1943) 11
Shalala v. Illinois Council on Long Term Care, Inc.,

529 US. 1 (2000) 8,11
Weinberger v. Salfi, 422 U.S. 749 (1975) 8
Your Home Visiting Nurse Servs., Inc. v. Shalala,

525 U.S. 449 (1999) 8, 10

Statutes and regulations:
Consolidated Appropriations Act, 2001, Pub. L. No.

106-554, § 1(a)(6), 114 Stat. 2763 .. - 7
Balanced Budget Act of 1997, Pub. L. No. 105-33,

Subtit. F, 111 Stat. 432:

§ 4531(b), 111 Stat. 451 (42 U.S.C. 1395m(()) ............... 3
§ 4531(b)(3), 111 Stat. 452 (42 U.S.C. 1395m(1)
OI siiccinsnnintiinasicenesinandetahininjeiniinivmbiesnennaiintinmmnnimanneniontan 3

(IIT)

IV

Statutes and regulations—Continued: Page

Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000,
Pub. L. No. 106-554 (App. F—H.R. 5661), 114 Stat.
2763A-463:
§ 423(b), 114 Stat. 2763A-518
" § 423(b)(2), 114 Stat. 2763A-518 ....... 4
§ 521, 114 Stat. 2763A-534 ...........ccccccscssscsesecereceses
Social Security Act, 42 U.S.C. 301 et segq.:
Tit. II, 42 U.S.C. 401 et seq.
42 U.S.C. 405(b)
42 U.S.C. 405(g)
42 U.S.C. 405(h)
Tit. XVIII, 42 U.S.C. 1395 et seg. (Medicare Act) ...........
42 U.S.C. 1395¢
42 U.S.C. 1395d
42 U.S.C. 1395k
42 U.S.C. 1395/1
42 U.S.C. 1395m(/)
42 U.S.C. 1395m(/)(2)(A)-(D)
42 U.S.C. 1395m(1)(2)(E)
42 U.S.C. 1395m(1)(3)
42 U.S.C. 1395m(/) note
42 U.S.C. 1395x(m)
42 U.S.C. 1395x(s)
42 U.S.C. 1395x(s)(7)
42 U.S.C. 1395ff
42 U.S.C. 1395ff(b)(1)(A)
42 US.C. 1395ii
28 U.S.C. 1331
28 U.S.C. 1361 2,5, 10,1
42 C.F.R. 410.40-410.41

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Miscellaneous:

65 Fed. Reg. (2000):
p. 55,078

p. 55,079
p. 55,085

67 Fed. Reg. (2002):
p. 9100

p. 9102

p. 9104

pp. 9118-9119

Page

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ororn or

Jn the Supreme Court of the Anited States

No. 04-430

LIFESTAR AMBULANCE SERVICE, INC., ET AL.,
PETITIONERS

v.

UNITED STATES OF AMERICA, ETAL.

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENTS
IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. la-11a)
is reported at 365 F.3d 1293. The opinion of the district
court (Pet. App. 12a-48a) is reported at 211 F.R.D. 688.

JURISDICTION

The judgment of the court of appeals was entered on
April 16, 2004. A petition for rehearing was denied on
June 29, 2004 (Pet. App. 44a-45a). The jurisdiction of
this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

Petitioners challenge regulations implementing a fee
schedule governing the reimbursement of ambulance

(1)

2

services under Medicare. The court of appeals held that
petitioners must raise their challenge under the specific
review procedures of the Medicare Act, 42 U.S.C. 1395
et seq., and could not circumvent those procedures by
resorting to the general mandamus statute under 28
U.S.C. 1361.

1. The Medicare program, established in 1965 by
Title XVIII of the Social Security Act, 42 U.S.C. 1395 et
seq., is a federally subsidized health insurance program
for the elderly and certain disabled people. 42 U.S.C.
1395c, 1395d. Part A of the program provides insurance
for covered inpatient hospital and related post-hospital
services. 42 U.S.C. 1395x(m). Part B is a voluntary
supplementary insurance program covering physicians’
services and certain other medica! and hea’th services.
42 U.S.C. 1395k, 1395/, 1395x(s).

The Medicare statute provides that ambulance ser-
vices are covered under Part B “where the use of other
methods of transportation is contraindicated by the
individual’s condition, but only to the extent provided in
regulations.” 42 U.S.C. 1395x(s)(7). Medicare accord-
ingly covers ambulance services, in both emergency and
non-emergency situations, if the use of an ambulance is
necessary in light of the beneficiary’s medical condition
at the time of transport, and if the ambulance service
meets certain vehicle and crew requirements. 42
C.F.R. 410.40-410.41.

Medicare previously paid for ambulance services on a
“reasonable cost” basis, if services were furnished by a
hospital-based provider, or a “reasonable charge” basis,
if services were furnished by a free-standing ambulance
service supplier. 67 Fed. Reg. 9102 (2002). Those
retrospective methodologies based payments on the
costs or charges actually incurred. In the Balanced
Budget Act of 1997, Congress directed the Secretary of

3

Health and Human Services (HHS) to establish a
national fee schedule setting forth pre-determined
amounts that Medicare would pay for ambulance ser-
vices. Pub. L. No. 105-33, § 4531(b), 111 Stat. 451 (42
U.S.C. 1395m(1)).

The Balanced Budget Act of 1997 provides that in
developing a fee schedule, the Secretary shall establish
mechanisms to control increases in expenditures, estab-
lish definitions for ambulance services that link pay-
ments to the type of services furnished, consider ap-
propriate regional and operational differences, and con-
sider adjustments for inflation and other “relevant
factors.” 42 U.S.C. 1395m(/1)(2)(A)-(D). The Act directs
the Secretary to “phase in the application of the
payment rates under the fee schedule in an efficient and
fair manner.” 42 U.S.C. 1395m(/)(2)(E). It mandates
that the fee schedule be “budget neutral” by requiring
that payments under the schedule in the year 2000 not
exceed the inflation-adjusted expenditures that would
have been made under prior law. 42 U.S.C. 1395m(/)(3).
And it provides that “(t]he amendments made by this
subsection shall apply to services furnished on or after
January 1, 2000.” Pub. L. No. 105-33, § 4531(b)(3), 111
Stat. 452 (42 U.S.C. 1395m(/) note).

On September 12, 2000, the Secretary promulgated a
proposed ambulance fee schedule rule that, inter alia,
included payments based on mileage covered by the
ambulance. 65 Fed. Reg. 55,078. The rule proposed
that the schedule take effect on January 1, 2001, and
that the fee schedule be phased in over a four-year
transition period during which some percentage of the
payment would be based on the prior, cost or charge-
based methodology, and an increasing percentage of the
payment would be based on the new fee schedule. Jd.
at 55,085. The Secretary observed that the proposed

4

effective date for implementing the fee schedule did not
meet the statutory deadline set out in the Balanced
Budget Act of 1997. The Secretary explained, however,
that the development of the fee schedule had been
delayed by the burdens of ensuring that HHS’s massive
computer systems would be “Y2K” compliant and not
disrupted by difficulties in accurately recognizing the
calendar year 2000, and by obligations to implement
other Medicare changes mandated by the Balanced
Budget Act. Jd. at 55,079.

On December 21, 2000, before the proposed rule was
finalized, Congress enacted legislation amending one
component of the proposed fee schedule: the mileage
payment to be made to certain ambulance service sup-
pliers. The statute amended the phase-in provisions of
the existing ambulance fee schedule statute to provide
that the

phase-in shall provide for full payment of any na-
tional mileage rate for ambulance services provided
by suppliers that are paid by carriers in any of the
50 States where payment by a carrier for such
services for all such suppliers in such State did not,
prior to the implementation of the fee schedule,
include a separate amount for all mileage within the
county from which the beneficiary is transported.

Medicare, Medicaid, and SCHIP Benefits Improvement
and Protection Act of 2000, Pub. L. No. 106-554 (App. F
—H.R. 5661), § 423(b), 114 Stat. 2763A-518. Congress
specified that the amendment “shall apply to services
furnished on or after July 1, 2001.” § 423(b)(2), 114 Stat.
2763A-518.

On February 27, 2002, the Secretary promulgated the
final fee schedule rule. 67 Fed. Reg. 9100. The final
rule enlarged the transition period for phasing in the

-_
e sername

5

new fee schedule to five years to accommodate
ambulance provider requests for a longer adjustment
period. /d. at 9118-9119. In addition, the final rule
postponed the effective date until April 1, 2002. Jd. at
9100. The Secretary explained that

[ijn the September 12, 2000 proposed rule, we in-
dicated our intention to implement the fee schedule
beginning January 1, 2001. However, although the
proposed rule was largely based on an agreement
reached as part of the negotiated rulemaking pro-
cess with representatives of the ambulance industry
and other interests, we received over 340 public
comments. We did not have sufficient time to
carefully consider all comments and publish a final
rule in time to implement the fee schedule by
January 1, 2001.

Id. at 9104.

2. Petitioners are a class of ambulance service
operators. They allege that the aforementioned Acts
require the new fee schedule to be applied to services
provided from January 1, 2000, forward, and that the
Secretary therefore erred in establishing a later effec-
tive date. The district court found that it had man-
damus jurisdiction under 28 U.S.C. 1361 over peti-
tioners’ claims and ordered the Secretary to adopt a fee
schedule applicable to services rendered on or after the
earlier effective dates specified by statute. Pet. App.
32a.

The district court held that the Medicare Act does
not preclude mandamus jurisdiction, and that peti-
tioners satisfied the criteria for invoking mandamus
jurisdiction. Pet. App. 18a-19a, 20a-26a. The court
reasoned that the Secretary had a nondiscretionary
duty to establish the fee schedule and mileage provi-

6

sions by the statutorily-specified dates. Jd. at 20a-22a.
The court further reasoned that petitioners had no
alternative means of securing review because the
administrative review procedures established by Medi-
eare were futile. Jd. at 23a-26a. On the merits, the
court granted summary judgment for petitioners. Jd. at
20a-30a.

3. The court of appeals reversed, holding that the
district court had erred in exercising subject matter
jurisdiction under the mandamus statute. The court
found it unnecessary to decide whether the Medicare
Act forecloses mandamus jurisdiction, expressly stating
that “[w]e assume, without deciding, that mandamus
jurisdiction is not barred by 42 U.S.C. § 405(h) and,
therefore, is available for a claim arising under the
Medicare statute.” Pet. App. 4a n.3. It held, however,
that, even assuming mandamus jurisdiction is available,
“[pllaintiffs cannot invoke the extraordinary remedy of
mandamus because they have an ‘alternative avenue of
relief’” Jd. at 4a (quoting Mallard v. United States
Dist. Ct., 490 U.S. 296, 309 (1989)). The court explained
that “[t]he Medicare Act establishes a comprehensive
remedial scheme, providing both administrative hear-
ing rights for aggrieved providers, such as [petitioners],
and judicial review of the Secretary’s final decisions.”
Id. at 4a-5a. The court further observed that “(i]t is
undisputed that [petitioners] did not resort to these
administrative remedies.” Jd. at 5a. The court of ap-
peals accordingly vacated the district court’s judgment
and remanded with instructions to dismiss for want of
subject matter jurisdiction. Jd. at 11a.

ARGUMENT

The court of appeals’ decision is correct and con-
sistent with this Court’s precedents holding that man-

7

damus is an extraordinary remedy that is not available
if the plaintiff has an adequate, alternative means of
judicial review.

1. The Medicare Act generally makes federal juris-
diction over all claims arising under the Medicare Act
contingent on presentment of a claim to the Secretary
and exhaustion of statutori!y-prescribed administrative
remedies. With respect to ambulance services and
other items paid under Part B, the Act, as in effect at
the time the complaint was filed,” and subject to
amount-in-controversy limitations not relevant here,
provides that individuals and health care providers who
are aggrieved by a reimbursement determination have
a right to a hearing on their claim before the Secretary
under 42 U.S.C. 405(b), and to judicial review of the
Secretary’s final decision under 42 U.S.C. 405(g). 42
U.S.C. 1395ff(b)(1)(A).

The Act provides that a party may obtain judicial
review “after any final decision of the [Secretary] made
after a hearing to which [the provider] was a party” by
filing a civil action in district court within 60 days after
notice of the decision. 42 U.S.C. 405(g). Finally, 42
U.S.C. 405(h), which is incorporated by reference into
the Medicare Act, 42 U.S.C. 1395ii, makes the Act the

* Congress amended 42 U.S.C. 1395ff to impose processing
deadlines on certain administrative appeals and to require a claim-
ant to exhaust an additional level of administrative reconsideration
before seeking judicial review. Pub. L. No. 106-554 (App. F— H.R.
5661), § 1(a)(6), 114 Stat. 2763; § 521, 114 Stat. 2763A-534. The
amendments, however, do not apply to initial administrative deter-
minations made before October 1, 2002, and do not otherwise alter
the Act’s requirements that condition judicial review on pre-
sentment of a claim to the Secretary and exhaustion of admini-
strative remedies.

8

exclusive means of obtaining review of the Secretary’s
final decision. Section 405(h) provides:

The findings and decisions of the [Secretary] after a
hearing shall be binding upon all individuals who
were parties to such hearing. No findings of fact or
decision of the [Secretary] shall be reviewed by any
person, tribunal, or governmental agency except as
herein provided. No action against the United
States, the [Secretary], or any officer or employee
thereof shall be brought under section 1331 or 1346
of title 28, [United States Code], to recover on any
claim arising under this [title].

42 U.S.C. 405(h).

In short, the above provisions condition federal
jurisdiction over Medicare claims on presentment of the
claim to the Secretary and exhaustion of administrative
remedies. They do so by establishing administrative
hearing rights, by providing that final decisions made
after a hearing are judicially reviewable solely under
provisions of the Medicare statute, and by expressly
foreclosing resort to the federal question jurisdiction
provision of 28 U.S.C. 1331. Shalala v. Illinois Council
on Long Term Care, Inc., 529 U.S. 1, 7-14 (2000); Heck-
ler v. Ringer, 466 U.S. 602, 614-619 (1984); Weinberger
v. Salfi, 422 U.S. 749, 760-761 (1975).

This Court has not resolved whether Section 405(h)
bars resort to mandamus jurisdiction pursuant to 28
U.S.C. 1861. Your Home Visiting Nurse Servs., Inc. v.
Shalala, 525 U.S. 449, 457 n.3 (1999) (declining to
address the Secretary’s contention that the second
sentence of Section 405(h) bars mandamus jurisdiction);
Ringer, 466 U.S. at 616. Some courts have concluded,
however, that, with respect to essentially procedural
claims arising under Medicare or other pertinent titles

9

of the Social Security Act, Section 405(h) does not
foreclose mandamus jurisdiction where the standards
for mandamus relief are otherwise satisfied. See, e.g.,
Ellis v. Blum, 643 F.2d 68, 82 (2d Cir. 1981) (Section
405(h) “does not preclude assertion of § 1361 jurisdic-
tion over claims essentially procedural in nature.”);
Belles v. Schweiker, 720 F.2d 509, 512 (8th Cir. 1983)
(“[I]n cases like the present one, which involve claims
essentially procedural in nature, § 405(h) presents no
obstacle to mandamus jurisdiction.”); Burnett v. Bowen,
830 F.2d 731, 738 (7th Cir. 1987) (“Congress intended to
preserve mandamus jurisdiction for claims that are pro-
cedural in nature.”); Monmouth Med. Ctr. v. Thompson,
257 F.3d 807 (D.C. Cir. 2001) (mandamus jurisdiction
available to compel Secretary to comply with regula-
tions governing reopening of final reimbursement
determination).

Petitioners argue that the court of appeals’ decision,
in denying mandamus relief in this particular case,
conflicts with the above appellate authority. Pet. 14-15.
Petitioners reason that the court of appeals’ decision,
by recognizing the availability of alternative remedies
established by the Medicare Act, effectively renders
mandamus jurisdiction unavailable in all instances. Pet.
22-25. That is not correct. The decision below “as-
sume[d], without deciding, that mandamus jurisdiction
is not barred by 42 U.S.C. § 405(h) and, therefore is
available for a claim arising under the Medicare stat-
ute.” Pet. App. 4a n.3 (emphasis added). The court of
appeals’ decision thus expressly did not decide whether
mandamus jurisdiction is available for claims arising
under Medicare.

_ The court of appeals correctly found such considera-
tion unnecessary because petitioners’ undisputed fail-
ure to follow the administrative and judicial review

10

procedures specified in the Act, 42 U.S.C. 405(b) and
(g), precluded their ability to meet the traditional
standards for mandamus relief, thereby obviating the
need to address whether mandamus relief might be
appropriate in other circumstances. Pet. App. 4a-5a.
That holding is fully consistent with this Court’s similar
refusal to decide whether mandamus relief would ever
be available for Medicare and Social Security claims
oecause the plaintiff otherwise could not meet the stan-
dards for mandamus relief, 7.e., a clear non-discre-
tionary duty and unavailability of alternative avenues
of relief. Heckler, 466 U.S. at 616 (“We have on
numerous occasions declined to decide whether the
third sentence of § 405(h) bars mandamus jurisdiction
* * * because we have determined that jurisdiction
was otherwise available under § 405(g).”); accord Your
Home Visiting Nurse Servs., 525 U.S. at 457 & n.3
(plaintiff failed to show existence of a clear nondis-
cretionary duty).

Nothing in the court of appeals’ decision suggests or
purports to hold that Medicare’s administrative reme-
dies will be adequate in each and every instance,
without regard to the nature and circumstances of the
claim. It thus does not, as petitioners maintain, fore-
close mandamus jurisdiction in an appropriate case.
For instance, the court of appeals did not confront a cir-
cumstance where the Act itself provides no admini-
strative or judicial review of a final decision of the
Secretary. Cf. Your Home Visiting Nurse Servs., 525
U.S. at 453-454 (holding an intermediary’s refusal to
reopen a reimbursement decision is not subject to
review under the Act).

2. The court of appeals decision is also consistent
with the siandards for mandamus relief set forth in this
Court’s precedents. The mandamus jurisdiction con-

11

ferred by 28 U.S.C. 1361 “is intended to provide a
remedy for a plaintiff only if he has exhausted all other
avenues of relief and only if the defendant owes him a
clear nondiscretionary duty.” Ringer, 466 U.S. 602, 616
(1984). It is a narrow remedy reserved for extraordi-
nary circumstances and, as such, ordinarily “may not be
resorted to as a mode of review where a statutory
method of appeal has been prescribed.” Roche v.
Evaporated Milk Ass’n, 319 U.S. 21, 27-28 (1948).

The court of appeals correctly applied those stan-
dards in holding that mandamus jurisdiction could not
be asserted over petitioners’ claims. The court noted
that Medicare’s remedial scheme provides for admini-
strative review followed by plenary judicial review of
all claims arising under the Medicare statue, and
concluded that, “[iJn the face of this comprehensive
statutory scheme, it cannot be said that the second
requirement for mandamus review—that there be no
alternative avenues of relief—is met.” Pet. App. 10a.

Petitioners argue that the remedy available under
Medicare’s jurisdictional scheme is not adequate. Peti-
tioners thus assert that because they “can only obtain
the relief they seek through an order directing a federal
official to comply with the law, no ‘other remedy’
besides mandamus can possibly exist.” Pet. 25-26. That
contention lacks merit. Medicare’s judicial review
provisions afford the reviewing court plenary power to
direct a federal official to comply with the law, and the
court is fully empowered to enter any other injunctive
or declaratory relief that the court deems appropriate.
Cf. Illinois Council, 529 U.S. at 23 (“[A] court review-
ing an agency determination under § 405(g) has ade-
quate authority to resolve any statutory or constitu-
tional contention that the agency does not, or cannot,
decide.”). Petitioners thus err in asserting that the

12

assumption of mandamus jurisdiction pursuant to 28
U.S.C. 1361 affords the only avenue of relief on their
claims. Medicare’s jurisdictional scheme provides a
fully adequate remedy, and the court of appeals there-
fore correctly held that mandamus relief was inappro-
priate in this case.

CONCLUSION
The petition for a writ of certiorari should be denied.
Respectfully submitted.

PAUL D. CLEMENT
Acting Solicitor General

PETER D. KEISLER
Assistant Attorney General

BARBARA C. BIDDLE
JEFFREY CLAIR
Attorneys

NOVEMBER 2004

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386003_1379%3A2. Public record. Not legal advice.