Ashli Healthcare, Inc. v. Becerra

• Court: District Court, E.D. California
• Decided: August 21, 2024
• Docket: 1:23-cv-01443
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 ----oo0oo---- 11 12 ASHLI HEALTHCARE, INC., No. 1:23-cv-01443 WBS BAM 13 Plaintiff, 14 v. MEMORANDUM AND ORDER RE: PLAINTIFF’S MOTION TO COMPEL 15 XAVIER BECERRA, in his official COMPLETION OF ADMINISTRATIVE capacity as Secretary, United RECORD 16 States Department of Health and Human Services, 17 Defendant. 18 19 ----oo0oo---- 20 Plaintiff Ashli Healthcare, Inc. -- a provider of 21 medical equipment to Medicare beneficiaries -- brought this 22 action seeking judicial review of the final decision of the 23 Secretary of the United States Department of Health and Human 24 Services, which concerns a Medicare overpayment assessed against 25 plaintiff. (First Am. Compl. (“FAC”) (Docket No. 23).) 26 Presently before the court is plaintiff’s motion to compel the 27 “completion” of the administrative record. (Docket No. 27.) 28 Jurisdiction in this action is predicated upon section 1 405(g) of the Social Security Act, which authorizes judicial 2 review of a “final decision” of the Secretary of Health and Human 3 Services “made after a hearing.” See 42 U.S.C. §§ 405(g), 4 1395ff. The parties agree that the decision of the ALJ 5 constitutes the “final decision” of the Secretary where, as here, 6 the Medicare Appeals Council has declined to review or issue any 7 order on the ALJ decision. See 42 C.F.R. §§ 405.1048(a)(1), 8 405.1132. The court need not decide whether the Social Security 9 Act or the Administrative Procedure Act provides the standard of 10 review applicable to this motion, because the outcome is the same 11 under either approach. 12 Plaintiff styles the instant motion as one to 13 “complete” the administrative record, arguing that while the 14 documents at issue were not before the ALJ, they were, in fact, 15 considered by the Medicare contractors in making the appealed 16 determinations. This argument is factually unsupported by both 17 the allegations of the complaint and the record before the court. 18 Plaintiff first seeks to include documents concerning 19 various recalculations of the overpayment assessed against it. 20 There is no indication that the ALJ decision relied on these 21 documents. The topic of overpayment recalculations was entirely 22 unaddressed by the ALJ’s decision, nor did plaintiff raise it 23 before the ALJ beyond a passing reference. (See ALJ Decision at 24 11; Admin. Record at 3247-3250, 7001-7042.) Indeed, it appears 25 that the overpayment recalculations were not at issue in any of 26 the decisions throughout the relevant appeals process, which did 27 not provide calculations of the overpayment owed. (See Admin. 28 Record at 769-780, 3263-3319, 3720-3743, 4457-4495.) 1 Rather, plaintiff contends that the recalculations were 2 separately made (or should have been made) by one of the 3 contractors following each partially favorable decision. (See 4 FAC ¶¶ 221-22, 227-28, 234-36; see also Admin. Record at 387, 5 991.) The court cannot possibly conclude that any agency 6 decisionmaker meaningfully “considered” the overpayment 7 recalculations, whether “directly or indirectly,” see Blue 8 Mountains Biodiversity Project v. Jeffries, 99 F.4th 438, 452 9 (9th Cir. 2024), when none of the decisions under review by the 10 ALJ addressed that issue. 11 Plaintiff next seeks to include a file containing the 12 statistical “universe” of Medicare claims used to determine the 13 overpayment amount that includes, rather than excludes, certain 14 “zero-paid” claims.1 Once again, there is no indication that the 15 ALJ considered such a document. In fact, again, there is no 16 evidence that any of the Medicare contractors involved considered 17 this document. To the contrary, the complaint alleges, and the 18 record indicates, that the universe file relied upon by the 19 contractors excluded zero-paid claims. (See FAC ¶ 214 (“The 20 purported universe file included only fully and partially paid 21 claim lines; all zero paid claims had been removed, as explicitly 22 stated by [Medicare contractor]”); ALJ Decision at 11; Admin. 23 Record at 3311, 3314, 4490.) 24 1 As relevant background, the Medicare contractors relied 25 upon “statistical sampling and extrapolation” to calculate the overpayment, which requires designation of a “target universe” 26 from which the sampling is conducted. (See FAC ¶¶ 129-30, 179, 27 210-111.) The “universe” utilized by the contractors allegedly excluded “zero-paid” claims, which are “fully adjudicated claims 28 for which the payment amount was zero.” (See id. ¶¶ 166, 214.) 1 Plaintiff’s first claim contends that this exclusion 2 led to errors in the statistical extrapolation process and 3 thereby violated due process. (See FAC ¶ 246 (“[Medicare 4 contractor] improperly excluded zero-paid claims from the sample 5 frame in conducting its statistical sampling and 6 extrapolation”).) Plaintiff cannot now argue that a universe 7 file including zero-paid claims was considered by the agency, 8 when the theory it advances is premised on the fact that the 9 agency failed to consider those claims. 10 The court also notes that both the ALJ’s conclusions 11 concerning the statistical extrapolation and the due process 12 claims brought by plaintiff in this action raise legal questions 13 that do not require examination of the underlying overpayment 14 calculations or Medicare claims data. (See ALJ Decision at 11; 15 FAC ¶¶ 243-78.) Accordingly, the court’s consideration of this 16 case would not be aided by the documents plaintiff seeks to 17 include. Cf. Fence Creek Cattle Co. v. U.S. Forest Serv., 602 18 F.3d 1125, 1131 (9th Cir. 2010) (expansion of administrative 19 record is appropriate where necessary “to determine if the agency 20 has considered all factors and explained its decision” or “to 21 explain technical terms or complex subjects”). 22 The court thus concludes that plaintiff has failed to 23 provide “clear evidence” to overcome the “presumption of 24 regularity” applied to “an agency’s statement of what is in the 25 record,” see Goffney v. Becerra, 995 F.3d 737, 748 (9th Cir. 26 2021), and will deny plaintiff’s motion. 27 To be clear, the court makes no determination as to the 28 propriety of either the Secretary’s alleged failure to provide eee IE REE IEEE IE IE RE EE EE

1 | plaintiff with the overpayment recalculations or the exclusion of 2 zero-paid claims from the statistical universe; these are merits- 3 | based questions inappropriate for consideration on this 4 procedural motion. But it is plain that the relevant agency 5 decision making processes did not rely on these materials, nor 6 does the court require them. 7 IT IS THEREFORE ORDERED that plaintiff’s motion to 8 compel completion of the administrative record (Docket No. 27) 9 be, and the same hereby is, DENIED. 10 Dated: August 21, 2024 . - atten A hd. □□ □ WILLIAM B. SHUBB 12 UNITED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28