This provision appears applicable to the claims of the plaintiffs since plaintiffs are dissatisfied with the amount of the reimbursements. Plaintiffs maintain, however, that the provision does not apply to them because they do not contest the determinations by the fiscal intermediary of the amounts of the reimbursements. Rather, they object to the regulations relating to the determination of the reimbursement, which regulations they claim are both unconstitutional and arbitrary and capricious and work to deprive them of full reimbursement for reasonable costs. Thus, while plaintiffs ultimately object to the amounts of the reimbursements, they do so only because they object to the regulations that led to the determinations of the amounts of the reimbursements. They emphasize that they do not claim that the fiscal intermediary did not follow the regulations or that it erred in its calculations. Having thus identified their objection, plaintiffs assert that the § 1395 oo process does not permit the PRRB to consider their attack on the regulations. They argue that since the PRRB is itself bound by the statute and challenged regulations and since plaintiffs seek to challenge not specific cost reports but the validity of the regulation itself, the PRRB is without jurisdiction under § 1395 oo since it cannot afford the relief sought.
Plaintiffs' contentions are an obvious effort to circumvent Weinberger v. Salfi, 422 U.S. 749, 45 L. Ed. 2d 522, 95 S. Ct. 2457 (1975), which held that resort to the statutorily-provided administrative review procedure is required in situations such as plaintiffs'. This Court, however, finds plaintiffs' effort unsuccessful.
First, assuming arguendo that plaintiffs are correct that the § 1395 oo process could not consider their claims, plaintiffs ignore the fact that in Salfi and cases subsequent thereto the administrative process was equally incapable of giving the plaintiffs the relief sought. Nonetheless, the Supreme Court in Salfi held that resort to the administrative review procedure was required whether "necessitated by discretionary decisions of the Secretary or by his nondiscretionary application of allegedly unconstitutional statutory restrictions." 422 U.S. at 762. Similarly, the Court in Milo Community Hospital v. Weinberger, 525 F.2d 144, 147 (1st Cir. 1975), held that the administrative process was "not made inapplicable by reason of a constitutional challenge, beyond the power of the Secretary to take remedial action."
Second, in addition to misreading Salfi, plaintiffs read the § 1395 oo process too narrowly. Plaintiffs take the view that the Secretary has limited the process so as to preclude the PRRB from considering plaintiffs' claims that the regulations are both unconstitutional and arbitrary and capricious. In this regard, plaintiffs cite portions of defendant's Part A, Intermediary Manual, Health Insurance Manual-13. See plaintiffs' memorandum in opposition to defendant's motion to dismiss or for summary judgment, at 7-8, filed February 4, 1976. The sections cited by the plaintiffs put matters dealing with disputes as to the constitutionality of the law, regulations, or social security act instructions or rulings beyond the jurisdiction of the PRRB. Even if this Manual has the force and effect of law and is binding on the PRRB, as plaintiffs submit and defendant denies, it does not resolve the issue at hand.
Assuming arguendo that the Secretary has prohibited the PRRB from considering plaintiffs' constitutional challenges, this Court does not find that the Secretary has likewise prohibited the PRRB from deciding plaintiffs' claims on the alternate ground that the regulations are arbitrary and capricious in violation of the Medicare Act. Further, an examination of the provisions of 42 U.S.C. § 1395 oo reveals that the Secretary could consider plaintiffs' constitutional claims even if the PRRB could not. Subsection (f) of the provision, 42 U.S.C. § 1395oo(f), allows for review by the Secretary of decisions of the PRRB, and plaintiffs have advanced no claim that the Secretary has limited in any way his scope of review over the PRRB. Thus, resort to the administrative process is even more compelling in this instance, for, unlike Salfi and Milo Community Hospital, supra, the relief sought is clearly within the competence of the Secretary who, in his discretion, originally implemented the challenged regulations.
Even if initial application to the PRRB by plaintiffs of its claims seems formalistic and futile, as plaintiffs argue, it is a statutory prerequisite to judicial review which must be followed. A determination of futility can only be made by the Secretary, once a claim has been presented, and not by the Court. Weinberger v. Salfi, 422 U.S. at 766-67. Further, as shown above, this Court is not convinced that the futility of resort to the PRRB is a foregone conclusion, as plaintiffs contend. This Court thus finds that, contrary to plaintiffs' assertions, 42 U.S.C. § 1395 oo provides an administrative review process, available to plaintiffs and applicable to their claims, which must be resorted to as a prerequisite to obtaining judicial review.
III. SUBMISSION TO THE 42 U.S.C. § 1395 oo ADMINISTRATIVE REVIEW PROCEDURE IS A JURISDICTIONAL PREREQUISITE TO JUDICIAL REVIEW; AND 42 U.S.C. § 405(h) MAKES THIS THE EXCLUSIVE AVENUE TO JUDICIAL REVIEW OF THIS CASE.
As previously noted, plaintiffs have sought to invoke federal jurisdiction pursuant to 28 U.S.C. § 1331 (federal question) and 5 U.S.C. § 701 et seq. (Administrative Procedure Act) in their efforts to bypass the administrative review procedure and obtain direct judicial review of their claims. Plaintiffs have not attempted to invoke jurisdiction under 42 U.S.C. §§ 405(h) or 1395 oo ; nor does it appear they could succeed in such attempts since they have not met the jurisdictional prerequisites -- which include administrative exhaustion -- to judicial review contained in these provisions.
This Court finds it does not have jurisdiction under either of the alleged bases because the Supreme Court's decision in Weinberger v. Salfi, supra, makes it clear that the exclusive jurisdictional basis for the present case is 42 U.S.C. § 1395 oo and, as noted above, plaintiffs' complaint is insufficient to invoke jurisdiction under this statute.
The conclusion that there is no jurisdiction under 28 U.S.C. § 1331 is compelled not merely because of the exclusivity of the statutorily-established administrative review process, infra, but also because the Medicare Act itself expressly precludes jurisdiction under 28 U.S.C. § 1331. Section 405(h) of Title 42 U.S.C., which is incorporated in the Medicare Act by 42 U.S.C. § 1395ii "to the same extent as [it is] applicable with respect to [Title II]," mandates that the Secretary's decisions shall be reviewed only as provided in the Act -- which provision is here made in § 1395 oo -- and, in the third sentence, provides:
"No action against the United States, the Secretary, or any officer or employee thereof shall be brought under [§§ 1331 et seq. ] of Title 28 to recover on any claim arising under this subchapter."
The Supreme Court in Weinberger v. Salfi, supra, in an action arising under Title II of the Social Security Act, 42 U.S.C. §§ 401 et seq., conclusively determined the question of jurisdiction under 28 U.S.C. § 1331. The Court, in finding that the third sentence of § 405(h) precluded resort to federal question jurisdiction for the adjudication of the appellee's constitutional contentions, stated:
"that the third sentence of § 405(h) is more than a codified requirement of administrative exhaustion is plain from its own language, which is sweeping and direct and which states that no action shall be brought under § 1331, not merely that only those actions shall be brought in which administrative remedies have been exhausted . . . ." 422 U.S. at 757.