Federal Court Denies HHS's Attempt To
Dismiss ACA's Lawsuit

In a major and crucial development in the American Chiropractic Association's ongoing lawsuit against the Department of Health and Human Services over the denial of chiropractic services in Medicare HMOs, the U.S. District Court for the District of Columbia has ruled against a government attempt to dismiss ACA's lawsuit.

On Jan. 22, the federal court ruled that to require the ACA to exhaust the agency's administrative process would constitute "no review at all," and, therefore, under the applicable standards established by the United States Supreme Court, the ACA is entitled to bring its claim before the federal bench.

"The court's decision today is a monumental breakthrough for our lawsuit against the HHS," said ACA President Dr. James A. Mertz. "The American Chiropractic Association has argued the reasonable proposition that chiropractic services should be provided by doctors of chiropractic because they are the only providers licensed, trained and educated to perform manual manipulation of the spine to correct a subluxation. Now we will have an opportunity to argue our position before a federal court and not be bogged down in internal administrative gridlock."

The district court had previously ruled in ACA's favor, in an opinion dated July 7, 2000, that the ACA had standing to sue on behalf of the chiropractic profession. However, the court deferred its judgment on whether or not the ACA needed to "exhaust administrative remedies" before it could seek relief from the federal court pending additional briefing by the parties.

ACA's lawsuit alleges among other things that that the Secretary of HHS has improperly permitted physical therapists, medical doctors and doctors of osteopathy to provide the chiropractic benefit of manual manipulation of the spine to correct a subluxation to Medicare beneficiaries. The government had argued that these concerns could be addressed in the administrative process. It argued that a patient, or a chiropractor through an assignment of claim, could proceed through the agency's internal administrative process in order to address ACA's concerns.

The district court let stand Counts 2, 3, and 5, which will now proceed to full litigation. "Requiring administrative review of plaintiff's claims would effectively result in the complete preclusion of review...," the court ruled.

The court noted that "Because enrollees have no incentive to pursue a claim asserting that chiropractors should be the exclusive Medicare providers of manual manipulations, they do not provide a vehicle for presenting Counts 2, 3 or 5 for administrative and, ultimately, judicial review." Counts 2 and 3 alleged that the HHS Secretary's policies unlawfully permit non-chiropractors to perform manipulation of the spine to correct a subluxation. Count 5 alleges that the government has failed to ensure that managed-care organizations properly allocate portions of monthly, predetermined sums they receive from Medicare for the coverage of manual manipulation of the spine to correct a subluxation.

Of the remaining counts of ACA's lawsuit, the court granted the federal government's request to dismiss Count 4. Count 1 of the lawsuit was satisfied by the release of a report dealing with chiropractic services under the Medicare HMO program. Count 4 alleged that the HHS Secretary's policies unlawfully permit a managed-care organization to require a referral by a primary-care physician before a Medicare patient may visit and receive manual manipulation of the spine to correct a subluxation from a chiropractor. The court dismissed this count, "Because an administrative remedy exists under the Medicare program for the claim alleged in [this count]."

The parties are required under procedures applicable to all court actions to meet within 15 days of the order to discuss the status of the issues and file a report with the court 10 days after that.

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