GLOBAL RESCUE JETS, LLC V. KAISER FOUNDATION HEALTH PLAN, No. 20-56410 (9th Cir. 2022)
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Global Rescue Jets, which does business as Jet Rescue, billed Kaiser at Jet Rescue’s usual and customary rates. Kaiser paid only a fraction of the billed amount, however, because in its view Jet Rescue’s services were covered by Medicare and thus subject to payment at the much lower Medicare-approved rates. Jet Rescue brought this action against Kaiser to recover the additional sums Kaiser allegedly owes. Jet Rescue argues that it was not required to exhaust administrative remedies before filing suit and that the exhaustion requirement should have been excused in any event
The circuit court affirmed the district court’s dismissal, reasoning original Medicare beneficiaries must exhaust their administrative remedies before seeking judicial review of a claim for benefits. The panel also rejected Jet Rescue’s contention that the exhaustion requirement should be excused. The panel held that the exhaustion requirement may be excused if three conditions are satisfied: (1) the plaintiff’s claim is wholly collateral to a claim for Medicare benefits; (2) the plaintiff has made a colorable showing of irreparable harm; and (3) exhaustion would be futile. The panel concluded that Jet Rescue failed to meet the first and third requirements. Thus, the circuit court rejected both arguments and affirmed the district court’s judgment.
Court Description: Medicare Act The panel affirmed the district court’s dismissal for lack of subject matter jurisdiction of an action brought by Global Rescue Jets, LLC, which sought recovery of amounts it had billed Kaiser Foundation Health Plan, Inc., for international air ambulance services it provided to two patients who were enrolled in Kaiser Medicare Advantage plans under Medicare Part C. Global Rescue Jets, which does business as Jet Rescue, billed Kaiser at Jet Rescue’s usual and customary rates. Kaiser paid only a fraction of the billed amount, however, because in its view Jet Rescue’s services were covered by Medicare and thus subject to payment at the much lower Medicare-approved rates. The panel affirmed the district court’s dismissal on the ground that Jet Rescue, assignee of the two patients’ claims for healthcare benefits, failed to exhaust its administrative remedies under the Medicare Act. The panel held that the administrative review scheme under the Medicare Advantage program is modeled on the administrative review scheme Congress established under original Medicare, and it is well settled that, pursuant to 42 U.S.C. § 405, original Medicare beneficiaries must exhaust their administrative remedies before seeking judicial review of a claim for benefits. The panel concluded that there was no basis for creating a different rule with respect to administrative GLOBAL RESCUE JETS V. KAISER FOUND. HEALTH PLAN 3 exhaustion under the Medicare Advantage program. Accordingly, the panel held that the administrative exhaustion requirement imposed by Medicare Part C includes a both non-waivable “presentment” requirement and a waivable requirement that enrollees pursue a claim for benefits through each available level of administrative review. The panel concluded that Jet Rescue met the first of these requirements but not the second and therefore failed to exhaust administrative remedies. The panel rejected Jet Rescue’s arguments that 42 U.S.C. § 405(h) did not bar its lawsuit against Kaiser because (1) a Medicare Advantage organization is not an “officer or employee” of the United States or the Secretary of Health and Human Services, and (2) this lawsuit did not involve claims “arising under” the Medicare Act. The panel also rejected Jet Rescue’s contention that the exhaustion requirement should be excused. The panel held that the exhaustion requirement may be excused if three conditions are satisfied: (1) the plaintiff’s claim is wholly collateral to a claim for Medicare benefits; (2) the plaintiff has made a colorable showing of irreparable harm; and (3) exhaustion would be futile. The panel concluded that Jet Rescue failed to meet the first and third requirements. 4 GLOBAL RESCUE JETS V. KAISER FOUND. HEALTH PLAN
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