LOUISE W. FLANAGAN, District Judge.
This matter comes before the court on plaintiff's motion for preliminary injunction. (DE 4). The issues raised have been briefed fully and the parties have been heard at oral argument. In this posture, plaintiff's motion is ripe for ruling. For the reasons stated below, plaintiff's motion for preliminary injunction is denied.
As provided in the complaint, plaintiff, a home health agency located in Fayetteville, North Carolina, and current participant in the federal Medicare program, seeks a court order enjoining defendant from revoking its Medicare billing privileges. (Compl., DE 1, ¶¶ 4, 13-14). On or about May 6, 2015, defendant issued a letter informing plaintiff that defendant was revoking plaintiff's Medicare billing privileges, effective June 5, 2015. (Id. ¶ 4). The decision to revoke plaintiff's Medicare billing privileges was made without a hearing. Plaintiff contends defendant's actions
On June 4, 2015, the court entered order granting plaintiff a temporary restraining order, and thereafter, on June 11, 2015, at which time the instant motion for preliminary injunction was noticed to be heard, extended that order.
To obtain a preliminary injunction, plaintiff must make a "clear showing" "[1] that he is likely to succeed on the merits, [2] that he is likely to suffer irreparable harm in the absence of preliminary relief, [3] that the balance of equities tips in his favor, and [4] that an injunction is in the public interest." Winter v. Natural Res. Def. Council, 555 U.S. 7, 20, 22, 129 S.Ct. 365, 172 L.Ed.2d 249 (2008). Injunctive relief is an "extraordinary remedy" and to obtain it, plaintiff must satisfy each of the four factors. Real Truth About Obama, Inc. v. Fed. Election Comm'n, 575 F.3d 342, 346 (2009), vacated 559 U.S. 1089, 130 S.Ct. 2371, 176 L.Ed.2d 764, reinstated in pertinent part 607 F.3d 355 (2010).
It is not likely plaintiff will prevail on the merits of its underlying procedural due process claim because due process does not require a pre-deprivation hearing where a Medicare provider is stripped of its billing privileges.
As noted, plaintiff was not afforded a pre-deprivation hearing. However, that is not to say that plaintiff was provided no process at all. To the contrary, plaintiff was afforded the opportunity to submit a
To determine whether a process is constitutionally sufficient, the court must weigh three factors: 1) the private interest to be affected by the action; 2) the risk of erroneous deprivation of that interest through the procedures that were used, and the probable value of added procedures; and 3) the government's interest, including the fiscal and administrative burdens of added procedures. Al-Hamdi, 356 F.3d at 575 (citing Mathews v. Eldridge, 424 U.S. 319, 335, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976)).
The "private interest" at stake is not substantial. Although plaintiff "plays a virtually indispensable role in the administration of Medicare Benefits, [it] is not the intended beneficiary of the Medicare Program." Northlake Cmty. Hosp. v. United States, 654 F.2d 1234, 1242 (7th Cir.1981). Plaintiff's financial need is only "incidental" to the purpose of the Medicare program, and "is not of constitutional significance." Id.; see also Town Ct. Nursing Ctr. v. Beal, 586 F.2d 266, 277 (3d Cir. 1978); Case v. Weinberger, 523 F.2d 602, 607 (2d Cir.1975).
Turning to the second and third Eldridge factors, the risk of erroneous deprivation of plaintiff's economic interest through the currently afforded process is low. The regulations afford plaintiff the ability to take corrective action prior to termination of its Medicare billing privileges. Moreover, because defendant's determination is based on defined criteria the need for a hearing is lessened where defendant can make determinations based on documentary evidence. See Northlake Cmty., 654 F.2d at 1242. Finally, the government has a high interest in not conducting pre-deprivation hearings. These hearings would lead to additional administrative expense; would delay defendant's ability to enforce her valid regulations, promulgated pursuant to the Medicare Act to the detriment of the public; and would lead to additional expenses, incurred in the form of reimbursements paid as Medicare benefits to plaintiff. Thus, on balance, the factors weigh heavily against plaintiff, and it cannot show a likelihood of success on the merits of its procedural due process claim.
In addition, in the specific context of this case, courts typically have held that pre-deprivation hearings are not required to satisfy procedural due process. See Varandani v. Bowen, 824 F.2d 307, 309-10 (4th Cir.1987) (holding physician not entitled to hearing prior to termination in a medicare program under Eldridge); see also Cathedral Rock of N. College Hill, Inc. v. Shalala, 223 F.3d 354, 364-65 (6th Cir.2000); Northlake Cmty., 654 F.2d at 1241-43; Beal, 586 F.2d at 279-80; Marion Nursing Ctr., Inc. v. Sebelius, No. 4:13-CV-2953, 2013 WL 6019322 (D.S.C. Nov. 13, 2013).
In Varandani, the Fourth Circuit rejected a physician's procedural due process claim, grounded in a deprivation of a liberty interest, the doctor's good reputation, accruing from termination of his Medicare reimbursement privileges. Varandani, 824 F.2d at 310-11. The court held that an informal pre-termination hearing satisfied due process and that the government's compelling interest in assuring safe health care for the public, as well as avoiding the extra costs associated with a full pre-deprivation hearing, allowed the government to grant plaintiff fewer pre-deprivation protections. Id. at 311.
Plaintiff similarly has not shown a likelihood of success on the merits of its substantive due process claim. "Unlike rights subject to procedural due process protection, which arise from sources other than the Constitution, substantive due process rights arise solely from the Constitution." Huang v. Bd. of Governors of Univ. of N.C., 902 F.2d 1134, 1142 (4th Cir.1990) (citing Regents of Univ. of Mich. v. Ewing, 474 U.S. 214, 229-30, 106 S.Ct. 507, 88 L.Ed.2d 523 (1985) (Powell, J., concurring)). Here, plaintiff has failed to allege the deprivation of any right flowing directly from the Constitution. Therefore, it also has not shown a likelihood of success on the merits on this claim. A finding that plaintiff is unlikely to succeed on the merits of its underlying claim ends the court's inquiry, as all four of the factors articulated in Winter must be met to warrant a preliminary injunction. See Real Truth, 575 F.3d at 346.
With respect to any future injury, plaintiff lacks standing to assert any claim for deprivation of due process accruing from a revocation of its billing privileges that has yet to occur.
Plaintiff has failed to satisfy the "injury in fact" requirement because any injury sustained as a result of defendant's reservation of the right to again revoke plaintiff's Medicare billing privileges is "too abstract" to be judicially cognizable. See Friends of the Earth, Inc. v. Gaston Copper Recycling Corp., 204 F.3d 149, 154 (4th Cir.2000). At this point, there has been no actual deprivation of due process and plaintiff cannot show defendant likely will deprive it of due process in the future.
The speculative nature of plaintiff's injury is bolstered by the preceding discussion of plaintiff's likelihood of success on the merits. In light of plaintiff's purely financial interest, the low likelihood of erroneous deprivation, and the substantial administrative and financial difficulties that a pre-deprivation hearing would impose on the government, plaintiff likely would not be "injured" if the government deprived it of its Medicare billing privileges without prior benefit of hearing. Accordingly, plaintiff lacks standing to assert a due
Based on the foregoing, plaintiff's motion for preliminary injunction is DENIED. The court's temporary restraining order hereby is dissolved.