United States District Court, District of Columbia
BERMAN JACKSON UNITED STATES DISTRICT JUDGE.
American Clinical Laboratory Association, a trade association
that represents clinical and anatomic pathology laboratories,
Compl. [Dkt. # 1] ¶ 18, has challenged a regulation
issued by the Secretary of the U.S. Department of Health and
Human Services, Alex M. Azar, II. The regulation at issue
implements Section 216 of the Protecting Access to Medicare
Act of 2014 (“PAMA”) by requiring certain
laboratories to report pricing information to the agency for
use in establishing Medicare rates. Plaintiff contends that
the definition of the term “applicable
laboratory” in the regulation violates PAMA and the
Administrative Procedure Act (“APA”). In
response, defendant asserts that in the statute, Congress
expressly precluded judicial review of issues such as these,
and the Court has no jurisdiction to hear the case. While the
Court acknowledges that plaintiff's arguments on the
merits raise important questions, it agrees with defendant
that it cannot resolve this dispute, and it will dismiss this
matter for lack of subject matter jurisdiction.
federal Medicare program, established by Title XVIII of the
Social Security Act, provides health insurance to the elderly
and disabled. Amgen, Inc. v. Smith, 357 F.3d 103,
105 (D.C. Cir. 2004). The program is administered by the
Department of Health and Human Services (“HHS”),
and the Secretary of the Department is authorized to
“giv[e] content to the broad outlines of the Medicare
statute.” Dialysis Clinic, Inc. v. Leavitt,
518 F.Supp.2d 197, 199 (D.D.C. 2007), quoting Thomas
Jefferson Univ. v. Shalala, 512 U.S. 504, 506-07
(1994). Part A of Medicare covers inpatient hospital
stays and related services, while Part B covers outpatient
treatment and services, such as doctor's visits and
laboratory tests. See Abington Crest Nursing & Rehab.
Ctr. v. Sebelius, 575 F.3d 717, 718 (D.C. Cir. 2009).
case concerns laboratory tests paid for under Medicare Part B
- specifically, clinical diagnostic laboratory tests, which
are performed on specimens, such as blood or urine, and are
used in monitoring, diagnosing, and treating patients.
Pl.'s Corrected Mem. of P. & A. in Supp. of Pl.'s
Mot. for Summ. J. [Dkt. # 31-1] (“Pl.'s
Mem.”) at 4. They can range from routine blood work to
sophisticated genetic and molecular tests. Pl.'s Mem. at
1984, Medicare has paid for these tests based on a fee
schedule. See Medicare Program; Medicare Clinical
Diagnostic Lab. Tests Payment Sys.; Final Rule, 81 Fed. Reg.
41, 036, 41, 036 (June 23, 2016) (“Final Rule”)
(codified at 42 C.F.R. §§ 414.500-414.522). In
2014, Congress passed the Protecting Access to Medicare Act
of 2014, which, among other things, revised the payment
scheme for diagnostic tests by substituting a market-based
approach for the Clinical Laboratory Fee Schedule. Pub. L.
No. 113-93, § 216, 128 Stat. 1040, 1053 (2014) (codified
at 42 U.S.C. § 1395m-1).
216 of PAMA provides that Medicare payments for clinical
diagnostic laboratory tests will be based upon what private
payors pay laboratories for these tests. See 42
U.S.C. § 1395m-1(a); see also Thomas C. Fox
et al., Health Care Fin. Transactions Man.
§ 21:21 (2018). To calculate the appropriate payment
amounts, the Secretary is authorized to gather data, and
Section 216 requires “applicable laborator[ies]”
to report to HHS the amounts and volume of private sector
payments they receive for tests, 42 U.S.C. § 1395m-1(a),
which the Secretary will then use to calculate Medicare's
payment rates for the tests. Id. § 1395m-1(b).
statute defines “applicable laboratory” to mean a
laboratory for which a majority of the revenues it receives
from Medicare “are from this section, section
1395l(h) of this title, or section 1395w-4 of this
title” - in other words, that they are from
Medicare's Clinical Laboratory Fee Schedule or its
Physician Fee Schedule. Id. § 1395m-1(a)(2);
see also Pl.'s Mem. at 8.
statute also requires the Secretary to issue rules about how
these applicable laboratories would report the amounts and
volume of private sector payments they receive to the agency.
Id. at § 1395m-1(a)(12). So in 2016, after
publishing a preliminary rule and providing a public
notice-and-comment period, the Secretary issued a final rule
implementing Section 216. See Final Rule. In it, the
Secretary further defined an “applicable
laboratory” to mean one that “[b]ills Medicare
Part B under its own National Provider Identifier
(NPI).” 81 Fed. Reg. at 41, 098; 42 C.F.R. §
414.502. Plaintiff objects to the additional gloss on the
December 11, 2017, plaintiff filed this lawsuit, challenging
the definition of “applicable laboratory” set
forth in the Final Rule. Compl. [Dkt. # 1]. Pending before
the Court are the parties' cross-motions for summary
judgment. Pl.'s Mot. for Summ. J. [Dkt. # 13]; Def.'s
Cross-Mot. for Summ. J. & Opp. to Pl.'s Mot. for
Summ. J. [Dkt. # 27] (“Def.'s Cross- Mot. &
Opp.”). The motions are fully briefed,
see Pl.'s Combined Opp. to Def.'s Mot. and
Reply in Supp. of Pl.'s Mot. for Summ. J. [Dkt. # 29]
(“Pl.'s Opp.”); Def.'s Reply in Supp. of
Cross-Mot. for Summ. J. [Dkt. # 34-1]. The Court
received four amicus briefs,  and the administrative record
[Dkt. # 38] was filed on May 4, 2018.
courts are courts of limited jurisdiction, and the law
presumes that “a cause lies outside this limited
jurisdiction.” Kokkonen v. Guardian Life Ins. Co.
of Am., 511 U.S. 375, 377 (1994); see also Gen.
Motors Corp. v. EPA, 363 F.3d 442, 448 (D.C. Cir. 2004)
(“As a court of limited jurisdiction, we begin, and
end, with an examination of our jurisdiction.”).
“[B]ecause subject-matter jurisdiction is ‘an
Art[icle] III as well as a statutory requirement . . . no
action of the parties can confer subject-matter jurisdiction
upon a federal court.'” Akinseye v. District of
Columbia, 339 F.3d 970, 971 (D.C. Cir. 2003), quoting
Ins. Corp. of Ir., Ltd. v. Compagnie des Bauxites de
Guinee, 456 U.S. 694, 702 (1982). Under Rule 12(b)(1),
the plaintiff bears the burden of establishing jurisdiction
by a preponderance of the evidence. See Lujan v. Defs. of
Wildlife, 504 U.S. 555, 561 (1992); Shekoyan v.
Sibley Int'l Corp., 217 F.Supp.2d 59, 63 (D.D.C.
considering a motion to dismiss for lack of jurisdiction,
unlike when deciding a motion to dismiss under Rule 12(b)(6),
the court “is not limited to the allegations of the
complaint.” Hohri v. United States, 782 F.2d
227, 241 (D.C. Cir. 1986), vacated on other grounds,
482 U.S. 64 (1987). Rather, “a court may consider such
materials outside the pleadings as it deems appropriate to
resolve the question [of] whether it has jurisdiction to hear
the case.” Scolaro v. D.C. Bd. of Elections &
Ethics, 104 F.Supp.2d 18, 22 (D.D.C. 2000), citing