The opinion of the court was delivered by: Garnett Thomas Eisele United States District Judge
ORDER GRANTING MOTION TO DISMISS
Defendant Micheal O. Leavitt, as Secretary of the Department of Health and Human Services ("HHS"), seeks the dismissal of this case for lack of subject matter jurisdiction. Plaintiff Larry Self opposes the motion. After considering the matter, the Court concludes that this case must be dismissed for lack of subject matter jurisdiction.
This case involves the Plaintiff's effort to prevent HHS from levying and collecting on a lien on settlement funds paid by Union Pacific Railroad Company ("UP") to resolve a wrongful death action. Noel Self died of injuries sustained in a railroad crossing accident with a train owned by UP. Prior to his death, Mr. Self was treated for injuries incurred in the accident. Medicare paid $114,000 for Mr. Self's medical care.
UP agreed to pay $125,000 to resolve a claim by Noel Self's Estate. On March 7, 2005, a hearing was held in the Circuit Court of Craighead County, Probate Division, for the purpose of considering and approving the proposed settlement. A representative of HHS, attorney Annisha M. Tanzie, was given prior notice of the hearing and advised that she should appear if HHS had any objection to the proposed settlement. HHS was not represented at the hearing.
Following the hearing, the Probate Judge entered a Judgment making the following findings: (1) UP alone contributed the settlement sum, no portion of which came from insurance moneys; (2) the settlement sum was not subject to the lien of HHS; (3) the settlement sum was allocated to damages payable to decedent's children only, who were not made whole by the payment because the damages for grief far exceeded the settlement amount; (4) HHS waived any objections to its findings by failing to appear and defend at the hearing; and (5) neither the State of Arkansas nor HHS had a valid lien upon any portion of the settlement proceeds because the settlement beneficiaries were not made whole. (Judgment, Exh. 1 to Complaint).
On September 13, 2006, Plaintiff Larry Noial Self filed the present Complaint for Declaratory Relief, therein seeking a declaration from this Court that the Defendant has no lien on the settlement sum. In response, HHS filed a motion to dismiss the Complaint for lack of subject matter jurisdiction.
Federal Rule of Civil Procedure 12(b)(1) permits a defendant to file a motion to dismiss for "lack of subject matter jurisdiction over the subject matter." In determining whether jurisdiction exists, the Court is "free to weigh the evidence and satisfy itself as to the existence of its power to hear the case." Osborn v. United States, 918 F.2d 724, 729-30 (8th Cir. 1990)(citations omitted).
The party invoking the Court's subject matter jurisdiction has the burden to establish that jurisdiction in fact exists. Id. If jurisdiction is found to be lacking, the Court is obligated to dismiss the case. Fed. R. Civ. P. 12(h); Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 583-84 (1999).
Defendant HHS contends that this action is prematurely filed because Plaintiff has not pursued, much less exhausted, his administrative remedies. Plaintiff concedes that he has not exhausted his administrative remedies, but argues that this case falls within an exception to the exhaustion rule. For the reasons stated below, the Court grants Defendant's motion to dismiss.
(1) MEDICARE'S SECONDARY PAYER STATUTORY SCHEME
Congress enacted the Medicare program in 1965 to pay the medical expenses of the elderly, disabled and those suffering from end stage renal failure. 42 U.S.C. §§ 1395 et seq. The Medicare program is administered by the Department of Health and Human Services. Prior to 1980, Medicare paid essentially all expenses of eligible participants without regard for whether the recipient was also covered by another health plan. See Social Security Amendments of 1965, Pub. L. No. 89-97, § 1862(b), 79 Stat. 286. Beginning in 1980, however, Congress enacted a series of amendments designed to reign in skyrocketing Medicare spending. Collectively, these amendments are referred to as the Medicare ...