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January 8, 2013

Physicians' challenge of Physician Fee Schedule reimbursement methods dismissed for lack of jurisdiction

By Danielle H. Capilla, JD

Six physicians unsuccessfully appealed the dismissal of their lawsuit against CMS, its Administrator, and Secretary Sebelius challenging the method CMS and HHS use to determine the value of physician reimbursements under the Physician Fee Schedule (PFS) (Fischer v Berwick, January 7, 2012, per curiam). The suit, which alleged that CMS and HHS overly relied on the American Medical Association's Relative Value Update Committee's recommendations for the process of determining Relative Value Units (RVUs), which influences the PFS, was dismissed by the district court for lack of subject matter jurisdiction after finding that the physicians' claims were barred under 42 U.S.C. sec 1395w-4(i)(1)(B), which prohibits judicial review of the determination of RVUs. The Fourth Circuit upheld the dismissal.

Jurisdiction. The Fourth Circuit found that section 1395w-4(i)(1)(B) provides that there will be no administrative or judicial review regarding the determination of RVUs, which is clear and explicit legislative intent to prohibit the judicial review of challenges to RVU determination. Because the physicians were challenging the process of determining the RVUs, and not a policy that is ancillary to their determination, their claim was properly barred by the district court.

Other errors. The physicians argued that even if their claims were barred, the district court erred by failing to conduct a cursory review of the merits of their case. If the cursory review revealed a clear violation of statutory mandate by the agency, the court would gain jurisdiction over the matter. The Fourth Circuit found that the physicians failed to raise this argument at the district court level and as such waived this claim; however, they noted that there was no merit to the argument because neither CMS nor HHS violated a clear statutory mandate. The physicians also argued that the RVU determination was unconstitutional; however the court found that they had no legitimate property interest in having RVUs determined in any particular manner. Finally, the physicians argued that the district court improperly dismissed their claims that alleged the AMA RUC committee violated the rules of the Federal Advisory Committee Act (FACA) by failing to open its meetings and records to the public. However, the committee is not an advisory committee subject to the FACA, and the court upheld the district court's dismissal.

The case number is 12-1713.

Timothy F. Maloney, Veronica B. Nannis, Matthew M. Bryant, (Joseph, Greenwald & Laake, P.A.), for Appellants. William B. Schultz, (U.S. Department of Justice), Robert W. Balderston, Lawrence J. Harder, Amy Weiser, (Department of Health and Human Services), Stuart F. Delery (Acting Assistant Attorney General), Mark B. Stern, Alisa B. Klein, (U.S. Department of Justice), Rod J. Rosenstein (U.S. Attorney) for Appellees.

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