Laura Wilson, Personal Representative of the Estate of Max Wilson, Deceased v. United States

United States Court of Appeals for the Federal Circuit

04-5051

LAURA WILSON, Personal Representative
of the Estate of MAX WILSON, Deceased,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

Frank Mafrice, Sommers, Schwartz, Silver & Schwartz, P.C., of Southfield,
Michigan, for appellant. With him on the brief was Patrick Burkett.

Marla Conneely, Trial Attorney, Commercial Litigation Branch, Civil Division, United
States Department of Justice, of Washington, DC, argued for appellee. On the brief were
Peter D. Keisler, Assistant Attorney General, David M. Cohen, Director, Brian M. Simkin,
Assistant Director, and Richard S. Ewing, Trial Attorney.

Appealed from: United States Court of Federal Claims

Judge Christine O.C. Miller
 United States Court of Appeals for the Federal Circuit

04-5051

LAURA WILSON, Personal Representative
of the Estate of MAX WILSON, Deceased,

Plaintiff-Appellant,

v.

UNITED STATES,

Defendant-Appellee.

__________________________

DECIDED: April 21, 2005
__________________________

Before LOURIE, SCHALL, and LINN, Circuit Judges.

SCHALL, Circuit Judge.

Plaintiff-Appellant Laura Wilson is the personal representative of the estate of her

deceased husband, Max Wilson. Prior to his death, Mr. Wilson received medical

services that were paid for by Medicare. Following his death, Mr. Wilson’s estate

brought a medical malpractice action against a hospital and two doctors. After the

estate settled the action and received payment from the defendants, the Department of

Health and Human Services (“HHS”), on behalf of Medicare, claimed entitlement to a

portion of the settlement. Ms. Wilson, on behalf of the estate, paid the claim and then
filed suit in the United States Court of Federal Claims to recover the payment. In the

suit, she contended that the government’s claim against her husband’s estate was

improper and therefore constituted an illegal exaction. Ms. Wilson now appeals the

decision of the Court of Federal Claims that dismissed her suit for lack of jurisdiction.

Wilson v. United States, 58 Fed. Cl. 760 (2003) (“Order”). The court ruled that it lacked

jurisdiction under the Tucker Act because Ms. Wilson’s claim1 arose under the Medicare

statutes and because jurisdiction over such a claim is vested exclusively in federal

district court. We affirm.

BACKGROUND

I.

Some background will help the reader to understand the issue in this case. Title

XVIII of the Social Security Act, 79 Stat. 291, as amended, 42 U.S.C. § 1395 et seq.,2

commonly known as the Medicare Act, established the Medicare program. See Heckler

v. Ringer, 466 U.S. 603, 605 (1984). Medicare is a system of federally funded heath

insurance for the aged, the disabled, and people suffering from end-stage renal

disease. See Health Ins. Ass’n of Am., Inc. v. Shalala, 23 F.3d 413, 414 (D.C. Cir.

1994). It is administered by the Centers for Medicare and Medicaid Services, a subunit

of HHS, formerly known as the Health Care Financing Administration.3 United States v.

Baxter Int’l, Inc., 345 F.3d 886, 873 n.2 (11th Cir. 2003). Part A of the Medicare Act, 42

1
For ease of reference, we refer to the claim that Ms. Wilson brought as the
personal representative of the estate of her deceased husband as “Ms. Wilson’s claim.”
2
Unless otherwise indicated, all statutory references are to the 2000
version of the United States Code.
3
For convenience, we refer to the United States in this case as “HHS,” “the
Secretary,” “Medicare,” or “the government,” as the context requires.

04-5051 2
U.S.C. § 1395c et seq., provides insurance for the cost of hospital and related post

hospital services. Part B of the Act provides for voluntary coverage for the cost of

medical services, e.g., physicians’ fees, through private health insurance carriers. 42

U.S.C. § 1395j et seq.

For the first fifteen years, Medicare paid for medical services without regard to

whether they were also covered by an employer group health plan. Health Ins. Ass’n,

23 F.3d at 414. However, in 1980, Congress enacted a series of amendments,

commonly referred to as the Medicare Secondary Payer (“MSP”) provisions, which were

designed to make Medicare a “secondary payer” with respect to such a plan. New York

Life Ins. Co. v. United States, 190 F.3d 1372, 1373-74 (Fed. Cir. 1999) (citing Health

Ins. Ass’n, 23 F.3d at 414). The MSP statute provides, in relevant part, as follows:4

(2) Medicare secondary payer

(A) In general

Payment under this subchapter may not be made, except as
provided in subparagraph (B), with respect to any item or service to
the extent that –
(i) payment has been made, or can reasonably be expected
to be made, with respect to the item or service as required
under paragraph (1),5 or
(ii) payment has been made or can reasonably be expected to
be made promptly (as determined in accordance with
regulations) under a workmen’s compensation law or plan of the
United States or a State or under an automobile or liability
insurance policy or plan (including a self-insurance plan) or
under no fault insurance.

4
In this opinion, we refer to the MSP provisions as they existed prior to the
Medicare Prescription Drug, Improvement, and Modernization Act of 2003, Pub. L. 108-
173, 117 Stat. 2066. The changes made by that legislation are not pertinent to this
case.
5
Paragraph (1) of 42 U.S.C. § 1395y(b) covers, inter alia, the payment of
benefits by group health plans.

04-5051 3
 In this subsection, the term “primary plan” means a group health plan
or large group health plan, to the extent that clause (i) applies, and a
workmen’s compensation law or plan, an automobile or liability
insurance policy or plan (including a self-insured plan) or no fault
insurance, to the extent that clause (ii) applies.

42 U.S.C. § 1395y(b)(2)(A). In the event that Medicare is not reimbursed for a

conditional payment with respect to a medical item or service, “the United States may

bring an action against any entity which is required or responsible (directly as a third-

party administrator, or otherwise) to make payment with respect to the . . . item or

service (or any portion thereof) under a primary plan.” Id. § 1395y(b)(2)(B)(ii). Finally,

under the MSP provisions, the United States is subrogated (to the extent Medicare

makes payment for a medical item or service) to “any right . . . of an individual or any

other entity to payment with respect to such item or service under a primary plan.” Id.

§ 1395y(b)(2)(B)(iii).

Thus, if a Medicare recipient has medical insurance provided through a “primary

plan,” Medicare is precluded from paying for medical services except to provide

secondary coverage. Put another way, “Medicare serves as a backup insurance plan to

cover that which is not paid for by a primary insurance plan.” Thompson v. Goetzmann,

337 F.3d 489, 496 (5th Cir. 2003). As the Court of Federal Claims observed, “[m]edical

care thus is secured for a Medicare-eligible person whose care is covered by an insurer

that should be the primary payer, but has not resolved the claim timely enough to pay

for the medical care at the time payment is due.” Order, 58 Fed. Cl. at 761.

04-5051 4
 Judicial review of claims arising under the Medicare Act is pursuant to 42 U.S.C.

§ 405(g), which is made applicable to the Medicare Act by 42 U.S.C. § 1395ii6 and

which provides, in relevant part, as follows:

(g) Judicial review

Any individual, after any final decision of the [Secretary] made after
a hearing to which he was a party, irrespective of the amount in
controversy, may obtain a review of such decision by a civil action
commenced within sixty days after the mailing to him of notice of such
decision or within such further time as the [Secretary] may allow. Such
action shall be brought in the district court of the United States for the
judicial district in which the plaintiff resides, or has his principal place of
business, or, if he does not reside or have his principal place of
business within any such judicial district, in the United States District
Court for the District of Columbia. . . .

Section 405(h) of Title 42 provides that “[n]o findings of fact or decision of the

[Secretary] shall be reviewed by any person, tribunal, or governmental agency except

as herein provided.” It also provides that “[n]o action against the United States, the

[Secretary,] or any officer or employee thereof shall be brought under section 1331 or

1346 of Title 28 to recover on any claim arising under this subchapter [i.e., the Medicare

Act].” 42 U.S.C. § 405(h).

6
Section 1395ii provides in relevant part: “The provisions of . . . [42 U.S.C.
§ 405] . . . shall also apply with respect to [the Medicare Act] to the same extent as they
are applicable with respect to [the Social Security Act], except that, in applying such
provisions with respect to [the Medicare Act], any reference therein to the
Commissioner of Social Security or the Social Security Administration shall be
considered a reference to the Secretary or the Department of Health and Human
services, respectively.

04-5051 5
 Finally, before bringing suit pursuant to 42 U.S.C. § 405(g), an individual must

exhaust administrative remedies. Shalala v. Ill. Council on Long Term Care, Inc., 529

U.S. 1, 20 (2000); Ringer, 466 U.S. at 627; Weinberger v. Salfi, 422 U.S. 749, 762

(1975). Administrative remedies are provided by 42 U.S.C. §§ 1395ff and gg. Section

1395ff provides that an individual dissatisfied with an “initial determination” with respect

to a claim for benefits is entitled to reconsideration of the determination and a hearing,

and after such a hearing, “to judicial review of the Secretary’s final decision . . . as is

provided in section 405(g) of this title.” 42 U.S.C. § 1395ff(b)(1)(A). Section 1395gg

provides that the Secretary may review a decision to seek reimbursement of an

incorrect Medicare payment from an individual. It further provides that the Secretary

shall waive recovery when an individual is “without fault,” when “recovery would defeat

the purposes of [the Medicare Act],” or when recovery “would be against equity or good

conscience.” Id. § 1395gg(c).

We now turn to the facts of this case.

II.

In April of 2000, Ms. Wilson, as the personal representative of the estate of her

deceased husband, Max Wilson, filed a medical malpractice action in state court in

Michigan against the Genesys Regional Medical Center and two doctors who had

treated her husband prior to his death. Eventually, Ms. Wilson settled the case for

$160,000. Subsequently, on June 20, 2002, in a letter to Ms. Wilson’s attorney, HHS

formally asserted a claim for reimbursement against the settlement. HHS stated that

Medicare had made payments for Mr. Wilson’s care in the amount of approximately

$126,000 under Medicare Part A and in the amount of approximately $21,000 under

04-5051 6
Medicare Part B. In seeking reimbursement, HHS discounted the total amount of the

payments by the estimated amount of Ms. Wilson’s attorney fees and the expenses

incurred in pursuing the malpractice action. This resulted in a claim by HHS in the

amount of $88,744.72. The asserted basis for seeking reimbursement from the estate

was that HHS was entitled to repayment for conditional payments made by Medicare on

behalf of Mr. Wilson under the MSP provisions discussed above, in particular 42 U.S.C.

§ 1395y(b)(2)(B)(i). After indicating the circumstances under which HHS would waive

reimbursement of an overpayment under the MSP provisions, HHS stated: “Your client

may appeal our decision if: he/she disagrees that they received an overpayment; or

they disagree with the amount of the overpayment; or they disagree with our decision

not to waive their repayment of the overpayment.” In that regard, HHS advised Ms.

Wilson’s attorney as to the time periods for submitting an appeal (60 days with respect

to Part A services, 6 months with respect to Part B services) and as to where the appeal

should be submitted (Medicare Part A Intermediary, PO Box 12201, Roanoke, Virginia

24023-2201). Ms. Wilson did not appeal to the fiscal intermediary. Rather, on

December 6, 2002, she settled the claim for reimbursement by paying HHS the sum of

$48,277.33.

III.

On March 24, 2003, Ms. Wilson filed suit in the Court of Federal Claims, seeking

to recover the $48,277.33 she had paid HHS. In her suit, she alleged that the

government, through HHS, had effected an illegal exaction because it had engaged in a

wrongful assertion of statutory power under the MSP provisions. Ms. Wilson asserted

that the Court of Federal Claims had jurisdiction over her claim under the Tucker Act, 28

04-5051 7
U.S.C. § 1491(a)(1). In due course, the government moved to dismiss the suit for lack

of jurisdiction. The government argued that the Court of Federal Claims lacked

jurisdiction because Congress had explicitly provided that the federal district courts are

the exclusive judicial fora for issues related to the coverage and payment provisions of

the Medicare Act and because Ms. Wilson had failed to exhaust her administrative

remedies.

On December 4, 2003, the Court of Federal Claims granted the government’s

motion to dismiss. Order, 58 Fed. Cl. at 760. The court concluded that Ms. Wilson’s

claim arose under the Medicare Act and thus was covered by 42 U.S.C. § 405(h). Id. at

765. The court reasoned that although Tucker Act jurisdiction is not expressly

precluded by the third sentence of section 405(h),7 section 405(g) vests judicial review

of any claims arising under the Medicare Act exclusively in federal district court. The

court also concluded that section 405(g) barred judicial review of Ms. Wilson’s claim

because she had failed to exhaust her administrative remedies by seeking either a

waiver from the Secretary or review of the agency’s determination to seek

reimbursement from the estate pursuant to the procedures prescribed in the Medicare

Act. Id. at 765-66. In that regard, the court pointed to the provisions of 42 U.S.C.

§§ 1395ff and gg noted above.

Ms. Wilson timely appealed the court’s decision. We have jurisdiction pursuant

to 28 U.S.C. § 1295(a)(3).

7
The third sentence of 42 U.S.C. § 405(h), which is quoted above, reads as
follows: “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 to recover on any claim
arising under this subchapter [i.e., the Medicare Act].”

04-5051 8
 DISCUSSION

I.

Whether the Court of Federal Claims properly dismissed Ms. Wilson’s complaint

for lack of subject matter jurisdiction is a question of law that we review de novo. W.

Co. of N. Am. v. United States, 323 F.3d 1024, 1029 (Fed. Cir. 2003). Ms. Wilson

asserted subject matter jurisdiction in the Court of Federal Claims under the Tucker Act,

which provides as follows:

The United States Court of Federal Claims shall have
jurisdiction to render judgment upon any claim against the
United States founded either upon the Constitution, or any
Act of Congress or any regulation of an executive
department, or upon any express or implied contract with the
United States, or for liquidated or unliquidated damages in
cases not sounding in tort.

28 U.S.C. § 1491(a)(1).

A claim may be asserted under the Tucker Act “for recovery of monies that the

government has required to be paid contrary to law.” Aerolineas Argentinas v. United

States, 77 F.3d 1564, 1572 (Fed. Cir. 1996). Such a claim may be maintained when the

“plaintiff has paid money over to the Government, directly or indirectly or in effect,” and

seeks return of all or part of the money on the ground that it was “improperly paid,

exacted, or taken from the claimant in contravention of the Constitution, a statute, or a

regulation.” Eastport S.S. Corp. v. United States, 372 F.2d 1002, 1007 (Ct. Cl. 1967).

However, an illegal exaction claim may not be asserted in the Court of Federal Claims

under the Tucker Act when “Congress has expressly placed jurisdiction elsewhere.”

Aerolineas Argentinas, 77 F.3d at 1573 (quoting S. Puerto Rico Sugar Co. Trading

Corp. v. United States, 334 F.2d 622, 626 (Ct. Cl. 1964)). As we have explained,

04-5051 9
“[w]hen . . . a ‘specific and comprehensive scheme for administrative and judicial review’

is provided by Congress, the Court of Federal Claims’ Tucker Act jurisdiction over the

subject matter covered by the scheme is preempted.” Vereda, Ltda v. United States,

271 F.3d 1367, 1375 (Fed. Cir. 2001) (quoting St. Vincent’s Med. Ctr. v. United States,

32 F.3d 548, 549-50 (Fed. Cir. 1994), and citing United States v. Fausto, 484 U.S. 439,

454-55 (1998); Appalachian Reg’l Healthcare, Inc. v. United States, 999 F.2d 1573,

1577 (Fed. Cir. 1993)).

St. Vincent’s Medical Center is of particular relevance to this case, because, in

that case, we found preemption of Tucker Act jurisdiction by certain provisions of the

Medicare Act, albeit not the provisions at issue here. St. Vincent’s Medical Center, a

hospital, sought reimbursement for electricity costs it had incurred in providing services

to Medicare beneficiaries. 32 F.3d at 547. St. Vincent’s filed a request with HHS for a

retroactive payment after it belatedly became liable for un-metered electricity costs.

After HHS’s intermediary reviewing agency denied the request, St. Vincent’s filed an

appeal with HHS’s Provider Reimbursement Review Board (“PRRB”), pursuant to 42

U.S.C. § 1395oo.8 Id. Before the PRRB issued a ruling on its claim, however, St.

Vincent’s filed suit in the Court of Federal Claims. Id.

According to 42 U.S.C. § 1395oo(a), “a provider seeking judicial review of a

denial of reimbursement must first bring its claim before the PRRB.” St. Vincent’s, 32

F.3d at 549. Section 1395oo(f)(1) provides for judicial review in federal district court of

8
Section 1395oo(a) provides in relevant part that “[a]ny provider of services
which has filed a required cost report within the time specified in regulations may obtain
a hearing with respect to such cost report by a Provider Reimbursement Review
Board . . . .”

04-5051 10
matters that are adjudicated on their merits by the PRRB and of those matters that the

PRRB has certified for expedited judicial review. Id. In St. Vincent’s, we held that

Tucker Act jurisdiction was preempted because Congress had provided a specific and

comprehensive scheme for administrative and judicial review of Medicare

reimbursement claims of the kind asserted by St. Vincent’s. Id. at 549-50. We stated:

“Only where Congress has not specified procedures for review of Medicare

reimbursement claims can those claims be entertained under the Tucker Act.” Id. at

550. Further, we emphasized: “[42 U.S.C. § 405(h),] read in conjunction with 42 U.S.C.

§ 1395ii, unequivocally provides that ‘no action’ arising under the Medicare Act shall be

brought in any forum or before any tribunal that is not specifically provided for in the

Medicare Act.” Id. In short, if a claim arises under the Medicare Act, it may not be

pursued in the Court of Federal Claims.9 With the legal framework in place, we turn to

the parties’ contentions on appeal.

II.

Ms. Wilson argues that the Court of Federal Claims erred in dismissing her

complaint for lack of jurisdiction. She contends that she presented an illegal exaction

claim within the court’s Tucker Act jurisdiction. In Ms. Wilson’s words: “[T]he

Government made a lawless demand for reimbursement from a separate, tort

settlement for the amounts previously paid as Medicare benefits, claiming a right of

reimbursement under the MSP provisions of the Medicare Act, particularly, 42 U.S.C.

9
When we refer here to claims “arising under” the Medicare Act, we refer to
claims for which specialized administrative review under 42 U.S.C. § 1395ff and judicial
review under 5 U.S.C. § 405(g) are available. We do not suggest that the application of
5 U.S.C. § 405(h) precludes judicial review through other avenues in cases where the

04-5051 11
§ 1395y(b).” (Br. of Appellant at 14.) Recognizing the exception to Tucker Act

jurisdiction over an illegal exaction claim stated in Aerolineas Argentinas and other

cases, Ms. Wilson contends that her claim does not fall within the exception because

Congress has not “expressly placed jurisdiction elsewhere.” She urges that her claim

did not arise under the Medicare Act because there was no dispute regarding Mr.

Wilson’s eligibility for Medicare benefits and because the government has never

claimed that it overpaid or has been overcharged for Medicare benefits. In addition, Ms.

Wilson states that “the Government has no right to repayment of the amount of

Medicare benefits paid, from a third-party tort recovery, because the

Defendants/tortfeasors, in such cases, are not insurance ‘plans’ or self-insurance ‘plans’

within the meaning of 42 U.S.C. § 1395y(b).” (Br. of Appellant at 16.) Under these

circumstances, she asserts, there was no administrative remedy available to her under

either 42 U.S.C. § 1395ff or 1395gg. Ms. Wilson states that because her claim does not

implicate a dispute regarding the amount of benefits to which Mr. Wilson was entitled,

the Secretary has not made an “initial determination” under section 1395ff. At the same

time, she argues that section 1395gg relates only to the recovery of incorrect payments,

i.e., when “more than the correct amount is paid” as Medicare benefits.10 Thus, Ms.

(Cont’d. . . .)
specialized administrative and judicial review processes provided in the statute are not
available.
10
Section 1395gg provides, in relevant part, as follows:

(b) Incorrect payments on behalf of individuals; payment
adjustment

Where—
(1) more than the correct amount is paid under this subchapter to a
provider of services or other person for items or services furnished an

04-5051 12
Wilson argues that while the statutory scheme of the Medicare Act requires that all

aspects of a present or future claim for benefits be channeled through the administrative

process, the administrative scheme was not intended to address her claim, because it

did not arise under the Medicare Act. Finally, Ms. Wilson urges that, even if her claim

could properly be viewed as arising under the Medicare Act, she should not be required

to exhaust the administrative remedies set forth in the Act. According to Ms. Wilson, the

exceptions to the exhaustion doctrine recognized by the Supreme Court in McCarthy v.

Madigan, 503 U.S. 140 (1992), apply to her case.

For its part, the government argues that the Court of Federal Claims did not err in

dismissing Ms. Wilson’s complaint for lack of jurisdiction. The government

characterizes Ms. Wilson’s action as a challenge to the right of Medicare to recover

from tort liability settlements any conditional payments made on the beneficiary’s behalf.

Under these circumstances, the government argues, any court adjudicating Ms.

Wilson’s claim would have to “analyze the full scope and extent of a Medicare

beneficiary’s entitlement to benefits and interpret the MSP provisions of the Medicare

Act.” (Br. of Appellee 14-15.) Consequently, according to the government, Ms.

Wilson’s claim must be viewed as arising under the Medicare Act. As a result, Ms.

Wilson was required to exhaust her administrative remedies under the Medicare Act

(Cont’d. . . .)
individual and the Secretary determines (A) that, within such period as he
may specify, the excess over the correct amount cannot be recouped from
such provider of services or other person, or (B) that such provider of
services or other person was without fault with respect to the payment of
such excess over the correct amount, . . . proper adjustments shall be
made, under regulations prescribed . . . by the Secretary, by decreasing
subsequent payments . . . .
42 U.S.C. § 1395gg(b).

04-5051 13
and then proceed to district court, neither of which she did. The government concludes

by urging that Ms. Wilson’s argument that it would be futile for her to pursue

administrative remedies is without merit. The government contends that the exceptions

to the exhaustion requirement upon which Ms. Wilson relies are inapposite.

III.

The Supreme Court has addressed the “arising under” issue. In Weinberger v.

Salfi, 422 U.S. 749, 762 (1975), a deceased wage earner’s widow, who represented a

class, appealed the Social Security Administration’s denial of her application for

survivor’s benefits for herself and for her daughter, asserting jurisdiction in federal

district court under 28 U.S.C. § 1331, the general federal question statute.11 The Court

began its analysis by noting that the third sentence of section 405(h), “[o]n its face, . . .

bars district court federal-question jurisdiction over suits, such as this one, which seek

to recover Social Security benefits.” Id. at 756-57. The Court went on to explain that

the third sentence of section 405(h) amounts to more than a codification of the doctrine

of administrative remedies. The Court stated that it provides that “no action [arising

under the Social Security Act] shall be brought under section 1331, not merely that only

those actions shall be brought in which administrative remedies have been exhausted.”

Id. at 758. The Court also determined that because Salfi’s action arose under the

Social Security Act, “the third sentence of § 405(h) preclude[d] resort to federal-question

jurisdiction for the adjudication of [Salfi’s] constitutional contentions.” Id. at 761. This

was the case because the Social Security Act “provide[d] both the standing and

11
§ 1331. Federal question
The district courts shall have original jurisdiction of all civil actions arising
under the Constitution, laws, or treaties of the United States.

04-5051 14
substantive basis for the presentation of [the] constitutional contentions.” Id. Thus, the

Court concluded that section 405(g), to the exclusion of section 1331, is the sole

avenue for judicial review for all claims “arising under” the Social Security Act. Id. at

760-61.

In Heckler v. Ringer, 466 U.S. 603, 605 (1984), the Supreme Court extended the

holding of Salfi to the Medicare Act. In Ringer, four Medicare beneficiaries brought an

action challenging the Secretary’s policy and ruling that no Medicare payments would

be provided for a particular surgical procedure, alleging that the policy and ruling

violated the Medicare Act, the Administrative Procedure Act, and the Constitution’s Due

Process Clause. 466 U.S. at 611 n.7. The Court found the plaintiffs’ constitutional

claim to be “inextricably intertwined” with their claim for benefits. Id. at 614. Thus, the

Court held that the claim arose under the Medicare Act, and that “all aspects of

respondents’ claim for benefits should be channeled first into the administrative process

which Congress has provided for the determination of claims for benefits.” Id.

IV.

As seen, Ms. Wilson’s contention is that HHS’s demand for reimbursement was

unlawful because it was contrary to the MSP provisions of the Medicare Act. Ms.

Wilson’s argument is that HHS’s demand upon her husband’s estate was unlawful

because Medicare had not made an overpayment or an incorrect payment on her

husband’s behalf and because, as far as the MSP provisions are concerned, the

defendants in the malpractice action did not constitute a “plan” or a self-insured “plan”

under 42 U.S.C. § 1395y(b)(2)(A). This argument implicates the meaning and scope of

various provisions of the Medicare Act. For this reason, we think Ms. Wilson’s claim

04-5051 15
presents precisely the kinds of questions that are meant to be addressed under the

scheme for administrative and judicial review that is contemplated by the Act: what a

given provision of the Act means and what conduct is covered by that provision. In

other words, we think the Act provides both the “standing and substantive basis” for Ms.

Wilson’s claim. At the same time, we think it can fairly be said that Ms. Wilson’s illegal

exaction claim is “inextricably intertwined” with both the claim of HHS relating to the

Medicare benefits that were paid to Mr. Wilson and Ms. Wilson’s challenge to HHS’s

claim. Thus, if Ms. Wilson was dissatisfied with HHS’s determination that the receipt of

proceeds from the malpractice settlement constituted an overpayment, she had

available to her the administrative review process provided by the Medicare Act.

We already have mentioned 42 U.S.C. § 1395ff(b)(1)(A) in our discussion of the

Medicare scheme in the BACKGROUND section of this opinion. More specifically, that

section provides, in relevant part, as follows:

[A]ny individual dissatisfied with any initial determination
under [42 U.S.C. § 1395ff(a)(1)] shall be entitled to
reconsideration of the determination, and . . . a hearing
thereon by the Secretary . . . and to judicial review of the
Secretary’s final decision after such hearing as is provided in
section 405(g) of this title.

42 U.S.C. § 1395ff(b)(1)(A). Section 1395ff(a)(1) provides in turn that “[t]he Secretary

shall promulgate regulations and make initial determinations . . . in accordance with

those regulations” with respect to:

(A) The initial determination of whether an individual
is entitled to benefits under [Medicare Part A or Part B].
(B) The initial determination of the amount of benefits
available to the individual under such parts.
(C) Any other initial determination with respect to a
claim for benefits under such parts . . . .

04-5051 16
Id. § 1395ff(a)(1). Pursuant to 42 C.F.R. § 405.704 (2002), a decision of the Secretary

is an “initial determination” if it involves an issue

having a present or potential effect on the amount of benefits
to be paid under Part A of Medicare, including a
determination as to whether there has been an overpayment
or underpayment of benefits paid under Part A, and if so, the
amount thereof.

42 C.F.R. § 405.704(b)(13).

Ms. Wilson argues that these provisions do not provide her an administrative

remedy because they are limited to disputes over Medicare “benefits.” She argues that

her dispute is not about Medicare benefits at all. We disagree. We think her request for

repayment of the portion of the settlement she paid to the government is a request for

Medicare benefits within the meaning of section 1395ff and the corresponding

regulations. Ms. Wilson paid the government but now seeks to recover that money.

This is essentially a claim contesting the agency’s initial determination that it overpaid

benefits to Mr. Wilson, and is thus a claim for benefits. See Buckner v. Heckler, 804

F.2d 258, 260 (4th Cir. 1986) (“Buckner’s claim that she is entitled to the overpayment

is, in essence, one for medicare benefits.”). We thus agree with the Court of Federal

Claims that Ms. Wilson failed to exhaust all available administrative remedies. As the

court correctly noted, Order, 58 Fed. Cl. at 766, under section 405(g), it is only through

the relevant administrative procedures that a plaintiff may seek judicial review, and even

then only in federal district court.

Ms. Wilson argues, however, that because what HHS did was contrary to the

Medicare Act, the scheme for administrative and judicial review under the Act does not

apply. Acceptance of Ms. Wilson’s argument would subvert the carefully crafted

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scheme that Congress created in the Act. That is because it would mean that whenever

a Medicare claimant disagreed with agency action on the ground that the action was

contrary to statute (even if the question turned on the meaning of a statutory provision),

he or she could opt out of the administrative review process. Not only would that be an

illogical result, but the Supreme Court has made it clear that “Congress, in both the

Social Security Act and the Medicare Act, insisted upon an initial presentation to the

agency.” Ill. Council, 529 U.S. at 20 (citing Ringer, 466 U.S. at 627; Salfi, 422 U.S. at

762).

V.

The issue before us today is one of first impression for this court. That said, our

determination that Ms. Wilson’s claim arises under the Medicare Act is consistent with

the rulings of two other circuits.

Fanning v. United States, 346 F.3d 386 (3d Cir. 2003), arose out of a class action

settlement pertaining to orthopedic bone screws manufactured by AcroMed

Corporation. AcroMed began manufacturing bone screw devices for use in spinal

fusion surgery beginning in 1983. By the early part of the 1990s, thousands of

individuals who had undergone spinal fusion surgery had experienced complications

and infirmities that they alleged were caused by the bone screws, resulting in a “flood”

of product liability suits against AcroMed. In due course, the Judicial Panel on

Multidistrict Litigation transferred all of the pending cases to the United States District

Court for the Eastern District of Pennsylvania. Id. at 390. Thereafter, Daniel Fanning,

acting as a class representative, reached a settlement with AcroMed on behalf of the

class. Pursuant to the terms of the settlement, AcromMed transferred $100 million into

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a trust fund for distribution to class members who qualified for payment in accordance

with a procedure to be established by the court. Id.

Eventually, HHS sought reimbursement from the settlement trust fund for

Medicare payments that had been made to members of the settlement class for various

medical expenses arising from injuries allegedly suffered as a result of using AcroMed

bone screws. HHS asserted that it was entitled to payment under 42 U.S.C.

§ 1395y(b)(2). In response, Fanning filed suit in the district court under 28 U.S.C.

§ 1331 on behalf of himself and the class, seeking to enjoin the government from

enforcing any of the rights asserted by HHS under the MSP provisions of the Medicare

Act. Id.

The government moved to dismiss the suit for lack of jurisdiction, arguing that the

class members were not entitled to judicial review because they had failed to exhaust

their administrative remedies before bringing suit, as required by 42 U.S.C. § 405(h).

Id. The district court denied the motion to dismiss, certified the class and entered a

preliminary injunction barring the government from taking any action to obtain

reimbursement from class members for Medicare payments. Id. at 391.

The government appealed the issuance of the preliminary injunction, and the

Third Circuit reversed, ordering the complaint dismissed for lack of jurisdiction. Id. at

402. The court pointed out that the government’s basis for seeking reimbursement from

the settlement trust fund was that AcroMed, the alleged tortfeasor who created the trust

fund, was a “self-insured plan” and was, therefore, the primary payer under the MSP.

Id. at 400. The court determined:

The essence of the claim asserted in Fanning’s amended
class action complaint is that the government is not entitled

04-5051 19
 to recover Medicare overpayments from a fund created as a
result of a settlement with an alleged tortfeasor because
Congress never intended to treat a settlement trust fund as
payments from a primary insurer under the MSP. We
believe there may be force to Fanning’s argument.
However, the government’s basis for seeking MSP
reimbursement from the AcroMed settlement trust fund is
that AcroMed is a “self-insured plan” and is, therefore the
primary payer under the MSP. Accordingly, the claim
asserted in the amended class action complaint is wholly
dependent upon determining whether or not AcroMed is a
“self-insured plan” and therefore, a “primary plan” under the
MSP. It is thus apparent that both the standing and the
substantive basis for the claim asserted in the amended
class action complaint are rooted in, and derived from, the
Medicare Act. Consequently, the claim is one “arising
under” the Medicare Act and the third sentence of § 405(h)
therefore deprived the district court of federal question
jurisdiction. The AcroMed class settlement plaintiffs are thus
required by § 405(h), as interpreted by Salfi, Ringer, and
Illinois Council, to channel their claim through the agency.

Id. at 399-400 (footnote omitted).12

Also instructive, we think, is Buckner v. Heckler, 804 F.2d 258 (4th Cir. 1986). In

that case, Evelyn Buckner incurred $20,845.45 in medical expenses as the result of an

automobile accident. Medicare paid for $20,636.66 of the expenses. Subsequently,

Buckner’s private automobile insurance carrier paid the hospital $5,317.76, leaving an

overpayment to the hospital of $5,108.97. The Secretary made a claim against the

hospital for the overpayment pursuant to 42 U.S.C. § 1395y(b)(1). Buckner also

claimed entitlement to the overpayment and filed a declaratory judgment action against

the Secretary. The district court dismissed the action for lack of jurisdiction, and the

Fourth Circuit affirmed, holding that Buckner had failed to exhaust her administrative

12
“Moreover,” the court added, “we note, but do not decide, that a
reasonable argument can be made that the AcroMed class settlement members are in
fact seeking benefits.” Id. at 401 n.16.

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remedies by presenting her claim for benefits to the Secretary. The court found Ringer

to be dispositive and noted its holding that exhaustion of administrative remedies is

required for all claims arising under the Medicare Act. Id. at 259. The court went on to

explain that Buckner’s claim that she was entitled to the overpayment was, in essence,

one for Medicare benefits. Id. at 260. Thus, the court concluded that “[t]o permit

Buckner to maintain a declaratory judgment action in this instance ‘would allow [her]

substantially to undercut Congress’ carefully crafted scheme for administering the

Medicare Act.’” Id. (quoting Ringer, 466 U.S. at 621).

Like the Third Circuit in Fanning and the Fourth Circuit in Buckner, we do not

address the merits of Ms. Wilson’s claim. Because the Medicare Act contains its own

comprehensive administrative and judicial review scheme which was available to Ms.

Wilson, “Congress has expressly placed jurisdiction elsewhere,” and there is no Tucker

Act jurisdiction over Ms. Wilson’s claim. Aerolineas, 77 F.3d at 1573.

Ms. Wilson’s reliance on Thompson v. Goetzmann, 337 F.3d 489, 496 (5th Cir.

2003), and Mason v. American Tobacco Co., 346 F.3d 36 (2d Cir. 2003), is misplaced.

In Goetzmann, Bernice Loftin underwent surgery to replace her hip joint with a

prosthesis manufactured by Zimmer, Inc. When complications arose, Loftin was forced

to undergo a second surgery. Medicare paid approximately $143,881.82 for the two

surgeries. Subsequently, Loftin brought suit against Zimmer for product liability, and

eventually the parties settled for the sum of $256,000. Loftin’s attorney, Goetzmann,

deducted his contingency fee and distributed the balance to Loftin. The government

then proceeded to assert an independent right of recovery under the MSP provisions

against Loftin, Goetzmann, and Zimmer, pursuant to 42 U.S.C. § 1395y(b)(2)(B)(ii). In

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its suit, the government alleged that Zimmer was a “self-insured plan” under the MSP

provisions by reason of its product liability settlement with Loftin. The district court

dismissed the government’s complaint pursuant to Federal Rule of Civil Procedure

12(b)(6) for failure to state a claim upon which relief could be granted. In so doing, the

court held as a matter of law that Zimmer could not have paid for Loftin’s medical

services “promptly” as required by 42 U.S.C. § 1395y(b)(2)(A). The Fifth Circuit

affirmed, but on the separate ground that Zimmer’s settlement agreement with Loftin

was not a “self-insurance plan” under section 1395y(b)(2)(A). 337 F.3d at 501. The

court concluded that Zimmer was “simply an alleged tortfeasor” and that the

government had failed to allege anywhere in the complaint that Zimmer paid Loftin

according to a pre-existing primary plan of self-insurance. Id. at 504.

In Mason, the plaintiffs asserted a private right of action under the provision of

the Medicare Act pursuant to which individuals may be awarded double damages

against a primary plan that has wrongfully denied them payment for health care that has

been paid for by Medicare. See 42 U.S.C. § 1395y(b)(3)(A). The plaintiffs alleged that

the defendants, major producers of tobacco products, should have been the primary

payers for the health care services needed to treat certain tobacco-related illnesses of

Medicare beneficiaries. The district court dismissed the complaint, and the Second

Circuit affirmed, holding that the defendants’ status as accused tortfeasors did not

convert them under the statute into primary plans or self-insured plans.

Neither Goetzmann nor Mason involved a jurisdictional issue, as is presented

here: whether the trial court (in this case, the Court of Federal Claims) lacks jurisdiction

over a plaintiff’s claim because the claim arises under the Medicare Act and therefore is

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subject to the specialized review procedures of the Act. Rather, Goetzmann and

Wilson addressed the merits of whether particular plaintiffs (the government in

Goetzmann, the individual plaintiffs in Mason) were entitled to recovery under the

provisions of the Medicare Act at issue. Jurisdictional issues such as those presented

here were not an issue in either case.

VI.

As noted above, Ms. Wilson argues that the exceptions to the exhaustion

doctrine recognized by the Supreme Court in McCarthy v. Madigan, 503 U.S. 140

(1992), apply to her case. In McCarthy, the Court noted that “administrative remedies

need not be pursued if the litigant’s interests in immediate judicial review outweigh the

government’s interests in the efficiency or administrative autonomy that the exhaustion

doctrine is designed to further.” 503 U.S. at 146 (quoting West v. Bergland, 611 F.2d

710, 715 (1979)). The Court went on to explain three sets of circumstances in which

the interests of the individual weigh heavily against requiring administrative exhaustion:

(1) where there is an unreasonable or indefinite timeframe for administrative action; (2)

where there is some doubt as to whether the agency is empowered to grant effective

relief; and (3) where the administrative body is shown to be biased or has otherwise

predetermined the issue before it. Id. at 146-49. We agree with the Court of Federal

Claims that the exceptions to the exhaustion doctrine do not apply in Ms. Wilson’s case.

As the Supreme Court has recognized, Congress has insisted that matters arising under

the Medicare Act be presented in the first instance to the agency. Ill. Council, 529 U.S.

at 20; Ringer, 466 U.S. at 627 (“Congress must have felt that cases of individual

hardship resulting from delays in the administrative process had to be balanced against

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the potential for overly casual or premature intervention in an administrative system that

processes literally millions of claims every year.”).

CONCLUSION

For the foregoing reasons, we agree with the Court of Federal Claims that the

scheme for comprehensive administrative and judicial review set forth in the Medicare

Act preempts Tucker Act jurisdiction over Ms. Wilson’s claim for reimbursement. We

therefore affirm the Court of Federal Claims’ dismissal of Ms. Wilson’s suit for lack of

jurisdiction.

Each party shall bear its own costs.

AFFIRMED

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