## Facts

- Medicare provides an integrated administrative review process for providers dissatisfied with certain determinations, culminating in judicial review of a final agency decision under 42 U.S.C. § 405(g), as incorporated by 42 U.S.C. § 1395cc(h)(1).
- 42 U.S.C. § 405(h), incorporated into Medicare by 42 U.S.C. § 1395ii, bars actions “arising under” the Medicare laws from being brought under 28 U.S.C. § 1331.
- An association of Medicare-participating nursing homes challenged regulations authorizing sanctions and remedies for facilities that violate Medicare standards.
- The association alleged the regulations were unconstitutionally vague, violated due process, and included rules not promulgated in compliance with the Administrative Procedure Act.
- The association filed directly in federal district court under § 1331 and intentionally bypassed the Medicare administrative route to § 405(g) review.
- The district court dismissed for lack of jurisdiction; the court of appeals reversed based on a reading of prior precedent that it believed permitted federal-question jurisdiction for this type of pre-enforcement regulatory challenge.

## Issues

1. Whether 42 U.S.C. § 405(h), as incorporated into Medicare by 42 U.S.C. § 1395ii, bars § 1331 federal-question jurisdiction over a provider association’s pre-enforcement challenge to Medicare regulations.
2. Whether an exception exists permitting § 1331 jurisdiction when requiring administrative channeling would effectively result in no meaningful judicial review.

## Decision

- The Supreme Court reversed the court of appeals and reinstated dismissal for lack of jurisdiction.
- Section 405(h) bars § 1331 jurisdiction for claims “arising under” Medicare, including broad, anticipatory challenges to regulations that are tied to Medicare enforcement, eligibility, or payment consequences.
- The prior decision recognizing review outside the channel applies only where the statutory scheme would otherwise provide no review at all for the category of claims.
- Because providers could obtain judicial review by proceeding through the administrative process and then seeking § 405(g) review after a final agency decision, the association could not proceed under § 1331.

## Legal Principles

- Section 405(h), as incorporated into Medicare, generally makes § 405(g) the exclusive path to judicial review for claims “arising under” Medicare.
- A claim “arises under” Medicare when it is closely connected to Medicare benefits, provider participation, or sanctions, even if framed as a facial, procedural, statutory, or constitutional challenge.
- Direct § 1331 review is permitted only in the narrow circumstance where applying the channeling requirement would amount to no review at all for the relevant category of claims.
- Practical burdens, delay, or the need to incur enforcement consequences before obtaining review do not, by themselves, defeat channeling where meaningful § 405(g) review remains available.

## Conclusion

The Court held that Medicare’s channeling provisions bar federal-question suits by providers challenging Medicare regulations when the claims arise under the Act and can ultimately be reviewed through the administrative process culminating in § 405(g) review, reserving an exception only for situations in which channeling would effectively eliminate review altogether.


Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (2000)