United States District Court, N.D. Illinois, Eastern Division
DER-YEGHIAYAN, DISTRICT JUDGE.
matter is before the court on Defendant Secretary of the
Department of Health and Human Services' motion to
dismiss. For the reasons stated below, the motion to dismiss
Joyce Bookshester (Bookshester) contends that she suffers
from diabetes and that Defendant denied her Medicare claim
for supplies for her continuous glucose monitor (CGM).
Bookshester pursued an administrative appeal and on August 8,
2016, the Medicare Appeals Council denied the appeal.
Bookshester filed the instant action, seeking a review of the
final decision of Defendant. Bookshester includes in her
complaint claims seeking judicial review under the
Administrative Procedures Act (APA), 5 U.S.C. § 701
et seq. (Counts I-VI), and a mandamus claim (Count
VII). Defendant now moves to dismiss the instant action for
lack of jurisdiction, and failure to state a valid claim.
Rule of Civil Procedure 12(b)(1) (Rule 12(b)(1)) requires a
court to dismiss an action when it lacks subject matter
jurisdiction. Fed.R.Civ.P. 12(b)(1); see also Ezekiel v.
Michel, 66 F.3d 894, 897 (7th Cir. 1995)(stating that
when reviewing a motion to dismiss brought under Rule
12(b)(1), the court “must accept as true all
well-pleaded factual allegations, and draw reasonable
inferences in favor of the plaintiff”). When subject
matter jurisdiction is not apparent on the face of the
complaint and is contested, “the district court may
properly look beyond the jurisdictional allegations of the
complaint . . . to determine whether in fact subject matter
jurisdiction exists.” Sapperstein v. Hager,
188 F.3d 852, 855-56 (7th Cir. 1999)(internal quotations
omitted)(quoting United Transportation Union v. Gateway
Western Railway Co., 78 F.3d 1208, 1210 (7th Cir.
1996)). The burden of proof in regards to a Rule 12(b)(1)
motion is on the party asserting that the court has subject
matter jurisdiction. Id.
ruling on a motion to dismiss brought pursuant Federal Rule
of Civil Procedure 12(b)(6) (Rule 12(b)(6)), the court must
draw all reasonable inferences that favor the plaintiff,
construe the allegations of the complaint in the light most
favorable to the plaintiff, and accept as true all
well-pleaded facts and allegations in the complaint.
Appert v. Morgan Stanley Dean Witter, Inc., 673 F.3d
609, 622 (7th Cir. 2012); Thompson v. Ill. Dep't of
Prof'l Regulation, 300 F.3d 750, 753 (7th Cir.
2002). A plaintiff is required to include allegations in the
complaint that “plausibly suggest that the plaintiff
has a right to relief, raising that possibility above a
‘speculative level'” and “if they do
not, the plaintiff pleads itself out of court.”
E.E.O.C. v. Concentra Health Services, Inc., 496
F.3d 773, 776 (7th Cir. 2007)(quoting in part Bell
Atlantic Corp. v. Twombly, 127 S.Ct. 1955, 1965 (2007));
see also Morgan Stanley Dean Witter, Inc., 673 F.3d
at 622 (stating that “[t]o survive a motion to dismiss,
the complaint must contain sufficient factual matter,
accepted as true, to state a claim to relief that is
plausible on its face, ” and that “[a] claim has
facial plausibility when the plaintiff pleads factual content
that allows the court to draw the reasonable inference that
the defendant is liable for the misconduct
alleged”)(quoting Ashcroft v. Iqbal, 556 U.S.
662 (2009))(internal quotations omitted).
argues that this court lacks subject matter jurisdiction over
the claims in Counts I through VI, and that the remaining
mandamus claim is either moot or should be dismissed for
failure to state a valid claim.
APA Claims (Counts I-VI)
argues that Bookshester failed to exhaust her administrative
remedies for most of her APA claims, and that the only claim
that she did exhaust does not meet the amount in controversy
Exhaustion of Administrative Remedies Defendant contends
that Bookshester only exhausted her administrative remedies
in regard to a claim involving the disposable sensors used
with the CGM. A Medicare claimant is required to exhaust her
“administrative remedies by obtaining a final decision
of the Secretary before they can present a claim for judicial
review.” Martin v. Shalala, 63 F.3d 497, 503
(7th Cir. 1995); see also 42 U.S.C. § 405(g);
1395ff(b)(1)(explaining administrative exhaustion);
Michael Reese Hosp. & Med. Ctr. v. Thompson, 427
F.3d 436, 440-41 (7th Cir. 2005)(holding that a provision
“incorporated into the Medicare Act . . . has been held
to preclude federal question jurisdiction unless the Medicare
program's administrative review process has been
exhausted”). The administrative record confirms that
Bookshester pursued administrative remedies only in regard to
the disposable sensors and not in regard to the whole CGM
system. (AR 3-16, 416-19, 1156-1169, 1377-1383). It was clear
from the decision of the administrative law judge (ALJ) that
the sole claim being pursued related to the disposable
sensors. The ALJ specifically stated that the issue presented
concerned “Medicare coverage for the disposable senors
for a” CGM system. (AR 1157). The Appeals Council also
made clear the limited scope of appeal, stating that the ALJ
issued a decision concerning “Medicare coverage of
disposable sensors . . . for use with a” CGM system,
that the “items at issue [were] 28 units of disposable
sensors, ” and that “no other components for the
GCM System” were at issue, “except the
sensors.” (AR 3, 7). The court notes that Bookshester
also pursued administrative remedies relating to an OmniPod
Insulin Management System that is not the subject of the
complaint in the instant action. (AR 7, 1157). Bookshester
argues that the exhaustion requirement should be waived and
makes a vague reference to the futility of administrative
remedies. (Resp. 10). Bookshester, however, has not shown
that such remedies would have been futile or shown that she
was prevented from pursuing her administrative remedies for
all the APA claims she presented in her complaint.
Bookshester has not provided a sufficient justification for
her failure to pursue the entire GCM system during the
administrative appeal process. The Seventh Circuit has
emphasized that “[t]he exhaustion requirement serves an
important purpose, preventing the premature interference with
agency processes so that the agency can function efficiently
and can correct its own errors, as well as affording the
parties and the courts the benefit of the agency's
experience and expertise and compiling a record which is
adequate for judicial review.” Michael Reese Hosp.
& Med. Ctr., 427 F.3d at 441; Martin, 63
F.3d at 504 (explaining exhaustion can be waived in certain
instances such as when it would be futile, if it was
collateral to the benefits claim, and irreparable harm would
result). BookShester chose not to pursue administrative
remedies concerning the entire GCM system and cannot now
circumvent that process by pursuing unexhausted claims before
this court. Therefore, Defendant's motion to dismiss all
APA claims other than the APA claims relating to the
disposable sensors, is granted.
Amount in Controversy
argues that the APA claim premised upon the disposable
sensors does not meet the amount in controversy requirement.
Pursuant to 42 U.S.C. § 1395ff(b)(1)(E), the amount in
controversy for judicial review of Medicare claim is $1, 500.
Id.; see also 80 Fed. Reg. 57827 (setting
$1, 000 threshold for judicial review). In the instant
action, Bookshester seeks compensation for the denial of
coverage over 28 disposable sensors (Sensors). Defendant
contends that the Sensors only cost Bookshester $150.
Bookshester contends that Medicare Summary Notice relied upon
by Defendant contains hearsay and lacks a foundation. The
record shows, however, that Bookshester herself relied upon
the Medicare Summary Notice pursuing her claims. (AR 416-19).
Bookshester has not pointed to any facts to call into
question the validity of the Medical Summary Notice and the
court can rely on the document in determining whether the
court has jurisdiction to hear her claim.
Sapperstein, 188 F.3d at 855-56. Even if this court
considers the invoice that Bookshester has submitted with her
response dated August 23, 2013, the invoice indicates that
such charges only amounted to $499. (DE 19-3: 7). This court
therefore lacks jurisdiction over the remaining APA claim and
Defendant's motion to dismiss the claim is granted. The
court notes that Bookshester ...