United States Court of Appeals, District of Columbia Circuit
September 19, 2017
from the United States District Court for the District of
Columbia (No. 1:15-cv-01663)
James Ayers argued the cause for appellants.
him on the briefs was Gregory Glen Marshall.
Caroline D. Lopez, Attorney, U.S. Department of Justice,
argued the cause for appellee Eric D. Hargan. With her on the
brief was Alisa B. Klein, Attorney.
Scarborough argued the cause for appellee Doctors Hospital at
him on the brief were John K. Villa, Enu Mainigi, and Richard
Before: Henderson and Griffith, Circuit Judges, and Williams,
Senior Circuit Judge.
LECRAFT HENDERSON, CIRCUIT JUDGE
prevent Medicare abuse through self-dealing, the Stark Law
prohibits a physician from referring patients to a hospital
or other healthcare facility in which he has a financial
interest. There is an exception, however, for a
physician-owned hospital, as long as the hospital complies
with various reporting requirements. The Affordable Care Act
amended the Stark Law to limit the ability of a
physician-owned hospital to expand but carved out expansion
exceptions for hospitals in medically underserved areas. As
amended, the Stark Law prohibits judicial review of the
procedure used to grant or deny an application for an
expansion exception. The sole issue in this appeal is whether
the district court correctly interpreted the
preclusion-of-review provision to deprive it of subject
matter jurisdiction. For the reasons that follow, we affirm.
XVIII of the Social Security Act of 1935, 42 U.S.C.
§§ 1395-1395lll, establishes Medicare, a
medical insurance program for the elderly and disabled.
Section 1877 of the Act- commonly referred to by the surname
of its sponsor, former U.S. Congressman Peter Stark-forbids
"self-referrals" by which a physician could profit
from Medicare reimbursements to healthcare providers with
which he has a financial relationship. 42 U.S.C. §
1395nn(a)(1)-(2). The "hospital ownership"
exception accommodates physician-owned hospitals by allowing
a physician to refer patients to a hospital in which he has
an ownership interest, provided the hospital complies with
reporting and disclosure requirements. 42 U.S.C. §
1395nn(d)(3)(D), (i)(1)(C)-(E), (i)(2).
VI of the Patient Protection and Affordable Care Act of 2010
(ACA) amends the Stark Law to prohibit physician-owned
hospitals to expand beyond "the number of operating
rooms, procedure rooms and beds for which the hospital is
licensed … on March 23, 2010." Pub. L. No.
111-148 § 6001(a), 124 Stat. 119, 684-689, codified as
amended at 42 U.S.C. § 1395nn(d)(2)-(3), (i). The
expansion restriction exempts some hospitals in medically
underserved communities-"applicable hospitals" and
"high Medicaid facilities"-subject to approval by
the Secretary of the U.S. Department of Health and Human
Services (HHS). See 42 U.S.C. § 1395nn(i)(3).
As amended by the ACA, section 1395nn(i)(3) reads, in
(A)Process. (i) … The Secretary shall
establish and implement a process under which a
hospital … may apply for an exception from the
[nonexpansion] requirement …. [(ii)] The process
under clause (i) shall provide … the community
… the opportunity to provide input with respect to the
application. (iii) … The Secretary shall implement
the process under clause (i) on February 1, 2012.
(iv) … Not ...