Jenner & Block

Firm Files Petition for Writ of Certiorari in Supreme Court on Jurisdictional Debate Regarding Bankruptcy and Medicare

On February 2, 2017, Jenner & Block filed a petition for writ of certiorari in the United States Supreme Court on behalf of Bayou Shores, a skilled nursing facility in Florida.  Bayou Shores cared for severely ill patients, nearly all of whom were indigent and relied upon Medicaid and Medicare to pay for their care. The petition asks the Court to decide two related questions regarding the power of federal courts to adjudicate the bankruptcy cases of health care companies with claims on administrative appeal through the Medicare system.  The petition argues that both questions have sharply divided the courts of appeals, and the uncertainty surrounding them imposes a significant burden on health care providers and their patients.

The case surrounds Bayou Shores, which filed for bankruptcy after the government threatened to terminate its Medicare and Medicaid provider agreements.  The bankruptcy court presided over, and ultimately confirmed, Bayou Shores’ plan for reorganization.  But the district court reversed the confirmation orders, finding that the Medicare Act stripped the court of jurisdiction.  Bayou Shores appealed the district court’s decision to the Eleventh Circuit and moved to stay the termination of its provider agreements pending appeal.  The district court granted a stay, stating that it would be “draconian” to upend patients and their families “based on a jurisdictional debate that has resulted in significant contrary opinions among the circuit courts and lower courts.”  The Eleventh Circuit affirmed, holding that a section of the Medicare Act bars district and bankruptcy courts from hearing Medicare-related claims.  In contrast, the Ninth Circuit and several bankruptcy courts have held that district and bankruptcy courts are not barred from exercising jurisdiction over claims arising under the Medicare Act.

“Because the Eleventh Circuit’s decision squarely conflicts with the decisions of other circuits on two important questions of federal law, and because this case is an optimal vehicle through which to address those closely related questions, the petition for a writ of certiorari should be granted,” the petition reads.

Partner Lindsay C. Harrison authored the petition.