CA1: PT challenges to Medicare regs need to be properly exhausted

Puerto Rican Association of Physical Medicine and Rehabilitation v. US, No. 07-2476 affirms a decision of the District Court, which rejects a challenge to a regulation which indicates that Medicare reimbursement is not available for physical therapy.  The relevant regulation is 42 C.F.R. §§ 410.60(a)(3)(iii), 484.4, which limits reimbursement services provided by people that meet certain educational criteria, even if the services are provided in the doctor’s office, or “Essentially, the ...regulations require that whether therapy is billed as "incident to" a doctor's services or as an independent medical service, those providing the therapy meet the same qualifications.”  The plaintiffs, after the adoption of the statute, filed an “administrative appeal” with the “Centers for Medicare and Medicaid Services ("CMS"), the agency that administers Medicare on behalf of the Secretary [of Health and Human Services].”  CMS responded that the “doctors that their letter had ‘no legal bearing on CMS’ and suggest[ed]that they ‘pursue whatever other administrative processes are available."” Then, the plaintiffs sued. 

The First holds that because Congress enacted a specific statute, 42 U.S.C. 1395ii and 42 U.S.C. 405(h), provides a specific channel for administrative review, they needed to exhaust.   Or, in the words of the Supreme Court in Weinberger v. Salfi, 422 U.S. 749, 760-61 (1975), those statutes apply if the "the standing and the substantive basis" derive from the statute. 

The government concedes that if an actual claim were denied, it could be administratively challenged and brought to court.