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Center for Dermatology & Skin Cancer, Ltd. v. Burwell

United States Court of Appeals, Seventh Circuit

October 21, 2014

CENTER FOR DERMATOLOGY AND SKIN CANCER, LTD., et al., Plaintiffs-Appellants,
v.
SYLVIA MATHEWS BURWELL, Secretary of Health and Human Services, et al., Defendants-Appellees

Argued September 11, 2014.

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 13-CV-04926 -- Marvin E. Aspen, Judge.

For Center For Dermatology And Skin Cancer Limited, ROBERT V. KOLBUSZ, Doctor, Diane M. Rzewuski, Carol F. Shunn, Hubert T. Brady, Plaintiffs - Appellants: David A. Golin, Attorney, Arnstein & Lehr Llp, Chicago, IL.

For SYLVIA MATHEWS BURWELL, Secretary of Health and Human Services, Wisconsin Physicians Service Insurance Corporation, Cahaba Safeguard Administrators Limited Liability Company, Defendants - Appellees: Lucy Christine Lisiecki, Department of Health And Human Services, Office of the Chief Counsel, Region V, Chicago, IL; Abigail L. Peluso, Office of The United States Attorney, Chicago, IL.

Before BAUER, MANION, and KANNE, Circuit Judges.

OPINION

Page 587

Manion, Circuit Judge.

Robert V. Kolbusz, M.D., is a practicing dermatologist who was indicted for Medicare fraud. After the indictment was returned, the Secretary for the Department of Health and Human Services ceased automatically processing his claims for Medicare reimbursement. During the pretrial preparation of his defense in the criminal proceeding, Dr. Kolbusz brought this mandamus action on behalf of himself, his medical corporation, and three patients, seeking to compel the Secretary to process claims submitted for reimbursement. In response, the Secretary filed a motion to dismiss for lack of subject-matter jurisdiction, arguing that Dr. Kolbusz failed to exhaust his administrative remedies before proceeding with his mandamus action. The district court agreed with the Secretary and dismissed this case for lack of subject-matter jurisdiction. Dr. Kolbusz appealed and we affirm.

I. Facts

Robert V. Kolbusz, M.D., owns and operates the Center for Dermatology and Skin Cancer, Ltd., in northern Illinois. He was a participating provider of Medicare from 1993 until December 2012. Because he was a participating provider, Dr. Kolbusz received payment for services rendered

Page 588

to patients directly from Medicare. On October 3, 2012 he was indicted by a federal grand jury for Medicare fraud. See United States v. Kolbusz, No. 12 CR 782 (N.D.Ill.) (Lee, J.).[1] As a consequence of the indictment, the Secretary's designees imposed fraud prevention procedures on Dr. Kolbusz's practice, including payment suspension, resulting in his ultimate withdrawal from the Medicare program.[2]

In July 2013, Dr. Kolbusz filed suit against the Secretary of the Department of Health and Human Services (the " Secretary" ) and her contractors, asserting three bases for subject-matter jurisdiction: (1) federal question jurisdiction, § 28 U.S.C. 1331; (2) the Medicare Act, 42 U.S.C. § 1395 et seq ; and (3) mandamus, 28 U.S.C. § 1361.[3] The suit was directed at the Secretary's acts or omissions regarding two distinct batches of Medicare claims submitted for reimbursement and sought to compel her to process those claims. Dr. Kolbusz allegedly sought initial determination of a batch of Medicare reimbursement claims covering October 4, 2012 through December 31, 2012. Of the 783 claims he submitted, 55 were denied. Dr. Kolbusz timely sought a redetermination of the 55 denied claims, which was granted, but denied on the merits. Dr. Kolbusz alleges that he appealed these decisions to the second level of administrative review (reconsideration), but that he has yet to receive a response regarding the qualified independent contractor's (" QIC" ) reconsideration.

Dr. Kolbusz's second batch of claims was allegedly submitted after he withdrew as a participating provider in the Medicare program on January 1, 2013. Dr. Kolbusz alleges that of the " approximately 2300" claims submitted after January 1, 2013, including those filed by co-plaintiff patients, " most" have not yet received initial determinations. He alleges that " approximately 250" of the claims were denied through initial determinations, and then denied again on appeal through reconsideration, Dr. Kolbusz alleges that these 250 claims are currently ...


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