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Context proves---the OLRC frequently changes Code and THEN Congress goes back and enacts those changes as laws

Samuel R. Maizel & Michael B. Potere 15, Maizel is a Partner in Dentons US LLP's Los Angeles office; he heads the firm's healthcare restructuring efforts; Potere is an Associate in Dentons US LLP's Los Angeles office, “Killing the Patient to Cure the Disease: Medicare's Jurisdictional Bar Does Not Apply to Bankruptcy Courts,” 32 Emory Bankr. Dev. J. 19, 2015, WestLaw

I. BACKGROUND ON 42 U.S.C. § 405(H) AND ITS ANALYTICAL FRAMEWORK: MEDICARE'S JURISDICTIONAL BAR ABSENT EXHAUSTION OF ADMINISTRATION REMEDIES

A. Section 405(h) and Its Legislative History

The Social Security Act requires exhaustion of administrative remedies prior to judicial review through 42 U.S.C. §§ 405(g) and (h), and this requirement specifically applies to the Medicare Act -- which itself has been described by courts as one of the “most completely impenetrable texts within human experience”5 -- via 42 U.S.C. §§ 1395ii (incorporating § 405(h)) and 1395ff(c) (incorporating § 405(g)).6 The relevant provisions state:

42 U.S.C. § 405(g) Judicial Review

Any individual, after any final decision of the Commissioner . . . may obtain a review of such decision by a civil action. . . . The court shall *22 have power to enter, upon the pleadings and transcript of the record, a judgment affirming, modifying, or reversing the decision of the Commissioner . . . with or without remanding the cause for a rehearing. . . . The judgment of the court shall be final except that it shall be subject to review in the same manner as a judgment in other civil actions.

42 U.S.C. § 405(h) Finality of Commissioner's Decision

The findings and decision of the Commissioner . . . after a hearing shall be binding upon all individuals who were parties to such hearing. No findings of fact or decision . . . shall be reviewed by any person, tribunal, or governmental agency except as herein provided. No action against the United States, . . . or any officer or employee thereof shall be brought under § 1331 or 1346 of title 28 to recover on any claim arising under this subchapter.7

Absent a final decision by the applicable administrative body, federal courts cannot take jurisdiction over a disputed issue arising under the Social Security or Medicare Acts. The concept underlying this requirement is that a party is not entitled to federal judicial relief unless and until available administrative remedies have been exhausted.8 The question then becomes whether such a jurisdictional limitation applies only to those suits brought pursuant to 28 U.S.C. §§ 1331 and 1336, or if § 405(h) applies to other federal jurisdictional grants, including the bankruptcy courts' jurisdictional grant in 42 U.S.C. § 1334.

Section 405 was enacted in 1939 as part of the Social Security Act.9 At that time, it barred jurisdiction under 28 U.S.C. § 41.10 Section 41 contained *23 twenty-eight sub-sections that granted the United States district courts “original jurisdiction” over various types of claims, including, in sub-section 19, “all matters and proceedings in bankruptcy.”11 In 1948, when Congress revised the U.S. Code, it extracted these jurisdictional grants from § 41 and re-codified some of them as 28 U.S.C. §§ 1331 to 1348, 1350 to 1357, 1359, 1397, 2361, 2401, and 2402.12 The re-codification included numerous substantive changes, such as removing the designation of a married woman as “disabled” for the purpose of tolling of the statute of limitations for her to bring a claim against the United States government.13 Although Congress re-wrote § 41, it did not correspondingly update § 405(h), which maintained its reference to § 41 for the next three decades. As such, § 405(h) was applied as though it referred to all of the jurisdictional grants that previously existed in § 41, largely due to the proposition in the 1975 Supreme Court decision Weinberger v. Salfi that the 1948 re-codification of 28 U.S.C. § 41 “caused no substantive change in the coverage of [§ 405(h)'s] jurisdictional bar.”14

In 1976, one year after the Weinberger decision, the Office of Law Revision Counsel15 [FOOTNOTE 15 BEGINS] The Office of the Law Revision Counsel is part of the United States House of Representatives and publishes the United States Code. See 2 U.S.C. §285(b) (2015). The United States Code contains the general and permanent laws of the United States. [FOOTNOTE 15 ENDS] revised § 405(h) by removing its reference to 28 U.S.C. § 41 and replacing it with references to 28 U.S.C. §§ 1331 (federal question jurisdiction) and 1346 (suits against the United States).16 Seemingly (and to at least one court, “clearly”), these were the only jurisdictional grants the Office *24 of Law Revision Counsel believed were relevant to Medicare Act claims.17 And so, after almost three decades, the Social Security Act caught up with and incorporated the changes in the Code pertaining to federal court jurisdiction.

Eight years later, in 1984, Congress expressly enacted the Law Revision Counsel's changes as part of the Deficit Reduction Act of 1984 (“DRA”).18 [FOOTNOTE 18 BEGINS] Deficit Reduction Act of 1984, Pub. L. No. 98-369, §2663(a)(4)(D), 98 Stat. 1162 (“Section 205(h) of such Act is amended by striking out ‘section 24 of the Judicial Code of the United States' and inserting in lieu thereof ‘section 1331 or 1346 of title 28, United States Code....”’). Changes to a statute by the Law Revision Counsel are not binding absent enactment by Congress. [FOOTNOTE 18 ENDS] As part of the DRA, Congress enacted a provision entitled, “Effective Dates,” which stated in sub-section (b) that:

Except to the extent otherwise specifically provided in this subtitle, the amendments made by section 2663 shall be effective on the date of the enactment of this Act; but none of such amendments shall be construed as changing or affecting any right, liability, status, or interpretation which existed (under the provisions of law involved) before that date.19

Some courts have found that this provision represents Congress's caution to the courts not to interpret § 2663's “technical corrections” as “substantive changes” to § 405(h).20 In so doing, however, these courts have ignored § 405(h)'s facially limited applicability to §§ 1331 or 1346.21

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