Baptist Memorial Hospital v. Johnson

603 F. Supp. 2d 40, 2009 U.S. Dist. LEXIS 25465
CourtDistrict Court, District of Columbia
DecidedMarch 25, 2009
DocketCivil Action 02-1919 (PLF)
StatusPublished
Cited by16 cases

This text of 603 F. Supp. 2d 40 (Baptist Memorial Hospital v. Johnson) is published on Counsel Stack Legal Research, covering District Court, District of Columbia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baptist Memorial Hospital v. Johnson, 603 F. Supp. 2d 40, 2009 U.S. Dist. LEXIS 25465 (D.D.C. 2009).

Opinion

OPINION

PAUL L. FRIEDMAN, District Judge.

Plaintiff hospital brings suit for declaratory and injunctive relief in the nature of mandamus, asking the Court to compel defendant, the Secretary of Health and Human Services, through the Centers for Medicare and Medicaid Services (“CMS”) to reopen a final payment decision issued by the Secretary’s payment agent and to recalculate the Secretary’s reimbursement of plaintiff for services it rendered to indigent clients. 2 Three motions are currently before the Court for consideration — defendant’s motion to dismiss for lack of jurisdiction, plaintiffs motion for discovery, and plaintiffs motion for summary judgment. 3 After careful consideration of the parties’ *42 papers and the entire record in the case, the Court will deny plaintiffs motion for discovery, will grant defendant’s motion to dismiss and, as a result, finds that plaintiffs motion for summary judgment is moot. The case will be dismissed.

I. BACKGROUND

This case is related to an issue that has been litigated before this Court and resolved by the United States Court of Appeals for the District of Columbia Circuit in Monmouth Med. Ctr. v. Thompson, 257 F.3d 807 (D.C.Cir.2001), and In re Medicare Reimbursement Litig., 414 F.3d 7 (D.C.Cir.2005), cert. denied, 547 U.S. 1054, 126 S.Ct. 1672, 164 L.Ed.2d 396 (2006). The history of this litigation is described, in brief, below.

The Medicare Act, Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq., creates a federally funded health insurance program for the elderly and disabled. Part A of the Medicare Act reimburses hospitals for the operating costs of certain inpatient services. See 42 U.S.C. § 1395ww. In order to obtain this reimbursement, eligible hospitals file cost reports with their “fiscal intermediaries,” see 42 C.F.R. § 413.20, usually insurance companies serving as the Secretary’s agents for the purpose of reimbursing health care providers. See 42 C.F.R. § 421.3; In re Medicare Reimbursement Litigation, 414 F.3d at 8. The intermediaries audit the hospitals’ cost reports and then issue Notice of Program Reimbursements (“NPRs”) in which they determine the amount owed by the Secretary to the hospitals for the fiscal year at issue. See 42 C.F.R. § 405.1803(a). Hospitals may appeal the NPR to the Provider Reimbursement Review Board (the “PRRB”) within 180 days. See 42 U.S.C. § 1395oo (a). The PRRB may reverse, affirm or modify the intermediary’s decision; subsequently, the Secretary may similarly reverse affirm or modify the PRRB’s decision. See 42 U.S.C. §§ 1395oo (d), (f)(1). Hospitals still dissatisfied with the final decision may seek judicial review by filing suit in the appropriate United States District Court. See 42 U.S.C. § 1395oo (f); In re Medicare Reimbursement Litig., 414 F.3d at 8.

Reimbursement to hospitals varies based on hospital-specific factors, see 42 U.S.C. § 1395ww(d)(5); those hospitals that serve a “significantly disproportionate number of low-income patients” receive increased reimbursements known as “disproportionate share” (“DSH”) adjustments. 42 U.S.C. § 1395ww(d)(5)(F)(i)(I). Congress enacted legislation that established detailed criteria for determining hospital eligibility and the extent of any DSH adjustment. See 42 U.S.C. § 1395ww(d)(5)(F); In re Medicare Reimbursement Litig., 414 F.3d at 9. The HCFA promulgated interpretive regulations to implement these provisions — regulations that four circuits subsequently found to be inconsistent with the Medicare Act because they improperly restricted DSH eligibility and reduced payments to eligible hospitals. See Cabell Huntington Hosp. Inc. v. Shalala, 101 F.3d 984 (4th Cir.1996); Legacy Emanuel Hosp. & Health Ctr. v. Shalala, 97 F.3d 1261 (9th Cir.1996); Deaconess Health Servs. Corp. v. Shalala, 83 F.3d 1041 (8th Cir.1996) (per curiam); Jewish Hosp., Inc. v. Sec’y of Health and Human Servs., 19 F.3d 270 (6th Cir.1994).

In light of these decisions, the Administrator of HCFA issued a ruling that rescinded the challenged regulation nationwide, announcing a new interpretation more favorable to hospitals. See Health Care Financing Administration Ruling 97-2 (February 27, 1997) (“HCFAR 97-2”); see also In re Medicare Reimbursement Litigation, 414 F.3d at 9. In Monmouth *43 Med. Ctr. v. Thompson, 257 F.3d at 813-15, the court of appeals addressed the reach of HCFAR 97-2 in conjunction with 42 C.F.R. § 405.1885(b) (1997), which required an NPR to be reopened and revised if, within three years, the HCFA provided notice to the intermediary that the decision was “inconsistent with the applicable law.” Id. at 813. 4 The court held that because HCFAR 97-2 constitutes “notice” under 42 C.F.R. § 405.1885(b) (1997), that regulation imposed a clear duty on intermediaries, enforceable through mandamus, to reopen NPRs issued for the three years prior to the Secretary’s issuance of HCFAR 97-2. Id. at 814. The court found that even though HCFAR 97-2 stated that it only had prospective effect, the mandatory language of 42 C.F.R. § 405.1885(b) (1997) created a nondiscre-tionary duty to reopen NPRs decided under the rescinded regulation within the three years prior to its issuance. Id.

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Bluebook (online)
603 F. Supp. 2d 40, 2009 U.S. Dist. LEXIS 25465, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baptist-memorial-hospital-v-johnson-dcd-2009.