Baylor County Hospital District v. Burwell

163 F. Supp. 3d 372, 2016 U.S. Dist. LEXIS 20672, 2016 WL 687161
CourtDistrict Court, N.D. Texas
DecidedFebruary 19, 2016
DocketCivil Action No. 7:15-cv-00053-O
StatusPublished
Cited by4 cases

This text of 163 F. Supp. 3d 372 (Baylor County Hospital District v. Burwell) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Baylor County Hospital District v. Burwell, 163 F. Supp. 3d 372, 2016 U.S. Dist. LEXIS 20672, 2016 WL 687161 (N.D. Tex. 2016).

Opinion

MEMORANDUM OPINION AND ORDER

Reed O’Connor, UNITED STATES DISTRICT JUDGE

Before the Court are Defendant’s Motion for Summary Judgment and Brief in Support (ECF Nos. 19-20), filed October 15, 2015; Plaintiffs Consolidated Motion for Summary Judgment and Response to Defendant’s Motion for Summary Judgment (“Cross-Motion & Resp.”) and Brief in Support (ECF Nos. 21-22), filed November 16, 2015; Defendant’s Consolidated Response to Plaintiffs Cross-Motion for Summary Judgment and Reply in Support of Her Motion for Summary Judgment (“Resp. & Reply”)' (ECF No. 26), filed December 7, 2015; and Plaintiffs Reply Brief in Support of its Cross Motion for Summary Judgment (“Reply”) (ECF- No. 27), filed December 22, 2015. Having considered the Motions, related briefing, and applicable law, the Court finds that Defendant’s Motion for Summary Judgment should be GRANTED, and Plaintiffs Cross-Motion for Summary Judgment should be DENIED.

I. BACKGROUND

The following facts are primarily taken from Plaintiffs First Amended Complaint for Judicial Review of Final Adverse Agency Decision on Critical Access Hospital Status. Am. Compl., ECF No. 25. Title XVIII of the Social Security Act establishes the Medicare Program (“Medicare”), which provides federal health insurance benefits to most persons over age 65 and to younger persons with certain disabilities. Id. ¶ 7. The Centers for Medicare and Medicaid Services (“CMS”) is the federal agency responsible for administering Medicare. Id. Plaintiff Baylor County Hospital District (“Baylor”) is a Medicare-certified provider of services within the meaning of 42 U.S.C. § 1395x(u) and operates Seymour Hospital, located in the rural area of Seymour, Texas. Id. ¶ 2.

The Medicare Rural Hospital Flexibility Program provides for the designation of certain health care facilities as Critical Access Hospitals (“CAHs”). Id. ¶ 8 (citing ■Balanced Budget Act of 1997, Pub. L. 105-33 § 4201, codified at 42 U.S.C. § 1395i-4(c)(2)(B)(i)(I) (hereinafter “§ 1395Í-4”)). The CAH designation was created to ensure that Medicare beneficiaries are able to access hospital services in rural areas by providing for greater Medicare payments to CAH-designated hospitals. Am. Compl. ¶ 8, ECF No. 25. To qualify for CAH status, § 1395Í-4 requires that a hospital be “located more than a 35-mile drive (or in the case of mountainous terrain or in areas with only secondary roads available, a 15-mile drive) from a hospital.... ” Id. ¶ 9 (quoting § 1395Í-4.) Neither § 1395Í-4 nor the accompanying administrative regulations, codified at 42 C.F.R. § 485.610(c), define “primary” or “secondary” roads. Id. ¶ 10. In 2007, CMS published its State Operations Manual (“SOM”), which interpreted “primary road” to be: “(1) a numbered federal highway; (2) a numbered state highway with two or more lanes in each direction; or (3) a road that is shown [376]*376as a primary highway divided by a median strip on a map prepared in accord with the U.S. Geological Survey standards.” Id. (citing SOM, Pub. No. 199-07, Chapter 2, § 2256A). The SOM does not include a definition for “secondary” road. Id. Roads that do not qualify as “primary” roads are treated as “secondary” roads. Id.

Seymour Hospital is located 31.8 miles from a hospital in Throckmorton, Texas, and thus fails to meet the 85-mile distance requirement. Id. ¶ 14. Only one road connects the two hospitals. Id. ¶ 15. The road has only “one lane in each direction and no median strip, no passing lanes and no paved shoulders.” Id. However, approximately 28.4 miles of the road is designated as U.S. Highway 183/283. Id. ¶ 16. CMS therefore designated the road as “primary” because it carries a federal, not state, highway designation, and does not meet the lesser 15-mile requirement when only secondary roads are available. Id.

Baylor contends that “[i]f the road had a state rather than a federal highway designation, it would be considered a ‘secondary’ road and the 15 mile distance test would be satisfied” because for “a state highway to be considered a ‘primary’ road under CMS’s policy interpretation, it would have to have two or more lanes in each direction or have a median strip,” which U.S. Highway 183/283 lacks. Id. ¶ 16 (emphasis added). Baylor argues that the Secretary wrongly denied Seymour Hospital CAH status, relying on an arbitrary rule that ignores the weight that § 1395Í-4 and the accompanying regulation afford to qualitative differences between primary and secondary roads. See id. ¶¶ 11, 22.

CMS denied Baylor’s original application for CAH status in 2013, and again upon reconsideration two months later. See Def.’s Br. Supp. Mot. 7, ECF No. 20 (citing CMS Letter to Seymour Hospital (“CMS Letter”) App. 17, ECF No. 18). Baylor appealed CMS’s decision to the Departmental Appeals Board Civil Remedies Division ALJ (“the ALJ”), asserting that CMS’s policy interpretation conflicts with the language and intent of § 1395L4. Am. Compl. ¶ 17, ECF No. 25. The ALJ granted summary judgment in favor of CMS, ruling that the Secretary’s policy determination was reasonable. Id. ¶ 19. Plaintiff appealed the ALJ’s decision to the Department Appeals Board Appellate Division (“the DAB”), which has final review authority over the reconsideration and appeal process for the Secretary’s determinations.1 Id. ¶ 20; see also Def.’s Resp. Pl.’s Mot. & Reply Mot. 8, ECF No. 26. The DAB affirmed the ALJ decision on January 21, 2015, ruling that CMS could “reasonably require that state highways and undesignated roads be treated as equivalent to federal highways only when they demonstrated specific characteristics typical of most federal highways.” Am. Compl. ¶ 20, ECF No. 25. Baylor has exhausted its administrative remedies and now brings the above-styled action pursuant to 42 U.S.C. § 1395cc(h), 42 U.S.C. § 405(g), and 5 U.S.C. § 701-06, asserting that the Secretary’s final decision affirming CMS’s ■interpretation was in error. Id. ¶¶ 21-22.

II. LEGAL STANDARD

A. Motion for Summary Judgment

Summary judgment is proper when the pleadings and evidence on file [377]*377show “that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “[T]he substantive law will identify which facts are material.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A genuine dispute as to any material fact exists “if the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Id.

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163 F. Supp. 3d 372, 2016 U.S. Dist. LEXIS 20672, 2016 WL 687161, Counsel Stack Legal Research, https://law.counselstack.com/opinion/baylor-county-hospital-district-v-burwell-txnd-2016.