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Royalty Ambulance Services, Inc. v. Department of Health and Human Services

United States District Court, C.D. California

May 8, 2014

ROYALTY AMBULANCE SERVICES, INC
v.
DEPARTMENT OF HEALTH AND HUMAN SERVICES, et al.

CIVIL MINUTES - GENERAL

CHRISTINA A. SNYDER, District Judge.

Proceedings: (In Chambers:) PLAINTIFF'S EX PARTE APPLICATION FOR A TEMPORARY RESTRAINING ORDER (Dkt. #9, filed April 25, 2014)

(In Chambers:) ORDER PLAINTIFF'S RESPONSE TO ORDER TO SHOW CAUSE WHY THIS ACTION SHOULD NOT BE DISMISSED FOR LACK OF SUBJECT MATTER JURISDICTION (Dkt. #22, filed May 6, 2014)

I. INTRODUCTION

Plaintiff Royalty Ambulance Services, Inc. filed this action on April 16, 2014, against defendants Department of Health and Human Services (the "Department"), the Secretary of Health and Human Services (the "Secretary"), the Centers for Medicare & Medicaid Services ("CMS"), the Chief Operating Officer of the Centers for Medicare & Medicaid Services, and Noridian Healthcare Solutions ("Noridian"). Dkt. #1. The complaint seeks declaratory and injunctive relief. Id.

Plaintiff filed an ex parte application for a temporary restraining order on April 25, 2014. Dkt. #9. No opposition has been filed. By order dated April 29, 2014, the Court reserved ruling on plaintiff's application for a temporary restraining order, and ordered plaintiff to show cause why this action should not be dismissed for lack of subject matter jurisdiction. Dkt. #11. Plaintiff responded to the order to show cause on May 6, 2014. Dkt. #22. After considering the parties' arguments, the Court finds and concludes as follows.

II. PLAINTIFF'S RESPONSE TO THE ORDER TO SHOW CAUSE

The original complaint in this action alleged that this Court has subject matter jurisdiction over this action pursuant to 5 U.S.C. § 702, which is a provision of the Administrative Procedure Act ("APA"). In the order to show cause, the Court stated that the APA does "not provide an independent jurisdictional grant." Charles A. Wright & Arthur R. Miller, 14 Fed. Practice & Procedure, Juris. § 3655 (3d ed.); see also Califano v. Sanders , 430 U.S. 99, 105-06 (1977). Thus, the complaint did not sufficiently allege subject matter jurisdiction because it did not appear "on the face of the plaintiff's properly pleaded complaint." Caterpillar Inc. v. Williams , 482 U.S. 386, 392 (1987). Plaintiff appends a proposed amended complaint to its response to the order to show cause, which asserts that 28 U.S.C. § 1331 is the basis for this Court's subject matter jurisdiction over this action. The proposed amended complaint appears to correct the deficiency identified by the Court in its order to show cause. See Reno v. Catholic Soc. Servs., Inc. , 509 U.S. 43, 56 (1993) (quoting Califano , 430 U.S. at 105) (explaining that 28 U.S.C. § 1331, and not the APA, "confer[s] jurisdiction on federal courts to review agency action"). Plaintiff requests leave to file this proposed amended complaint. That request is hereby GRANTED.

III. PLAINTIFF'S APPLICATION FOR A TEMPORARY RESTRAINING ORDER

A. Background

In brief, plaintiff asserts that it is an ambulance service company that is permitted to operate in Los Angeles County and Orange County, and has contracts for services with multiple hospitals in those counties. Sarkisyan Decl. ¶ 3. Plaintiff further asserts that it has been enrolled in Medicare Part B as a provider of ambulance services since on or about May 1, 2009. Id . ¶ 4. Plaintiff avers that all bills for services that it provided under Medicare were reviewed and approved by CMS through its billing contractor. Id . ¶ 5. Noridian served as that billing contractor beginning in October 2013. Id.

Plaintiff states that it operated continuously as a provider of ambulance services to Medicare patients from May 2009 to February 2014. Id . ¶ 6. Plaintiff asserts that, during this period, services provided to patients covered by Medicare "made up over 90% of [its] total billing." Id.

Plaintiff states that it received a letter from Noridian on March 6, 2014, stating that its "Medicare privileges [were] being revoked effective January 17, 2014." Id., Ex. 2. The March 6, 2014 letter states that plaintiff's privileges are being revoked pursuant to 42 C.F.R. 424.535(a)(1) based on information that plaintiff conducted business in these counties without the "proper ambulance permits." Id., Ex. 2. According to the letter, the determination that plaintiff was operating without proper permits was based on information received from the San Bernardino and Riverside County EMS agencies, as well as Noridian's review of plaintiff's claims data. Id . Plaintiff contends that a review of its own records shows that "all services provided originated in either Los Angeles or Orange [C]ounties." Id . ¶ 10. Additionally, plaintiff states that "neither county has provided any documentation of a service pick-up by [plainitff] which occurred within either Riverside County or San Bernardino County." Id . ¶ 12. Rather, San Bernardino County has stated that it was informed via an anonymous letter that plaintiff performed an unauthorized pick-up within its boundaries. Id . Riverside County has stated that it was led to believe that plaintiff performed unauthorized services based on "information that was received from [CMS]." Id., Ex. 6.

Plaintiff states that it appealed the revocation of its Medicare billing privileges, but no decision has yet been received.[1] Id . ¶ 14. Plaintiff avers that it continues to provide services to patients covered by Medicare in order to maintain its relationships with its clients, but has been unable to bill and collect payment for these services due to the revocation of its billing privileges. Id . ¶ 17. Plaintiff states that, since March 6, 2014, it has provided services valued at $140, 000 to patients covered by Medicare. Id . According to plaintiff, it has continued to provide these services in order to "maintain its business relationship with its clients." Id . Plaintiff asserts that, ...


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