Empire Health Foundation v. Burwell

209 F. Supp. 3d 261, 2016 U.S. Dist. LEXIS 127095, 2016 WL 5107010
CourtDistrict Court, District of Columbia
DecidedSeptember 19, 2016
DocketCivil Action No. 2015-2251
StatusPublished
Cited by4 cases

This text of 209 F. Supp. 3d 261 (Empire Health Foundation v. Burwell) 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
Empire Health Foundation v. Burwell, 209 F. Supp. 3d 261, 2016 U.S. Dist. LEXIS 127095, 2016 WL 5107010 (D.D.C. 2016).

Opinion

MEMORANDUM OPINION

JAMES E. BOASBERG, United States District Judge

Are we there? Is Godot coming? Is this agency decision final? Needing to ask typically signals the answer: Not yet. This case involves Medicare reimbursements for hospital services provided over ten years ago. In that decade, Plaintiffs Empire Health Foundation and hospitals it owns have sought reimbursement through successive stages of Medicare’s administrative-review process. Just when they thought that the process was culminating, the Provider Reimbursement Review Board then reviewing their claim remanded it, directing them to start over. Empire Health had enough and sued to challenge that remand order.

Defendant Sylvia Burwell, the Secretary of Health and Human Services, now moves to dismiss the Complaint for want of subject-matter jurisdiction. She argues that it is not yet time to hear this case, as the remand does not constitute a final agency decision for the Court to review. Because the Court agrees, it will grant the Motion and let the administrative gears keep grinding.

I. Background

Plaintiff Empire Health is a charitable organization based in Spokane, Washington, which owns Valley Hospital and Deaconess Medical Center (also Plaintiffs here). See Second Am. Compl. (SAC), ¶ 5. Some time ago, those hospitals provided services and are now in the midst of a process to obtain Medicare reimbursement. (For ease of reference, the Court will refer to all Plaintiffs collectively as “Empire Health.”) Before exploring Plaintiffs’ quest, the Court will lay out how Medicare reimbursement works generally.

A. Medicare Reimbursement Process

Title XVIII of the Social Security Act, commonly known as the Medicare Act, establishes the federal Medicare program. See 42 U.S.C. § 1395 et seq. Medicare funds medical care for elderly or disabled persons by reimbursing hospitals and other entities for services that they provide those patients. See Ne. Hosp. Corp. v. Sebelius, 657 F.3d 1, 2 (D.C.Cir.2011). The Center for Medicare and Medicaid Services (CMS), a component of the Depart *264 ment of Health and Human Services, administers the reimbursement process. See Ark. Dep’t of Health & Human Servs. v. Ahlborn, 547 U.S. 268, 275, 126 S.Ct. 1752, 164 L.Ed.2d 459 (2006).

Reimbursement, apparently, is far from swift. At the start of the Medicare process, CMS enlists private companies—known as “fiscal intermediaries”—to tabulate who is owed what. To that end, at year’s close, providers participating in Medicare submit cost reports to their fiscal intermediaries. See Sebelius v. Auburn Reg’l Med. Ctr., - U.S. -, 133 S.Ct. 817, 822, 184 L.Ed.2d 627 (2013); see also 42 C.F.R. §§ 413.20, 413.24. These intermediaries then audit each cost report and inform the provider of the total amount of Medicare reimbursement to which it is entitled, in a document known as a Notice of Program Reimbursement (NPR). See Emanuel Med. Ctr., Inc. v. Sebelius, 37 F.Supp.3d 348, 350 (D.D.C.2014) (citing 42 C.F.R. § 405.1803).

A hospital or other provider believing that it is not being reimbursed its fair share in the NPR may bring a challenge with the Provider Reimbursement Review Board (PRRB) and, if still unsatisfied, obtain further review by the Secretary (which occurs at her discretion). See 42 U.S.C. § 1395oo(a), (f). “The Board can affirm, modify, or reverse the fiscal intermediary’s award; the Secretary in turn may affirm, modify, or reverse the PRRB’s decision.” Emanuel, 37 F.Supp.3d at 350 (citing 42 U.S.C. § 1395oo(d)-(f)). If, at the end of these appeals, the provider still feels shortchanged, it has “the right to obtain judicial review of any final decision.” 42 U.S.C. § 1395oo(f)(1); 42 C.F.R. § 405.1877.

B. Medicare Reimbursement Amount

Beyond this intricate procedural setup, brewing the actual reimbursement amount itself requires a master class in molecular gastronomy. Although this Opinion will provide only an overview of how the NPR is concocted, past Opinions of this Court detail the reimbursement recipe. E.g., Cooper Hosp./Univ. Med. Ctr. v. Burwell, No. 14-1991, 179 F.Supp.3d 31, 36-38, 2016 WL 1436646, at *2-3 (D.D.C. Apr. 11, 2016).

To begin, even though Medicare purportedly reimburses hospitals for providing services, the actual reimbursement sum is roughly pegged to the number of patients discharged. See 42 U.S.C. § 1395ww(d). Certain adjustments are then tossed into the cauldron. One such adjustment is a bump-up for hospitals that “serve[] a significantly disproportionate number of low-income patients”—the so-called “disproportionate share hospital” or “DSH” adjustment. See 42 U.S.C. § 1395ww(d)(5)(F)(i)(I).

This DSH adjustment relies on another formula, which churns out a percentage representing the number of low-income patients that the hospital serves. See id. § 1395ww(d)(5)(F); see also Allina Health Servs. v. Sebelius, 746 F.3d 1102, 1105 (D.C.Cir.2014). One ingredient in this percentage is a fraction that takes into consideration the number of hospital-inpatient days spent by patients who were covered by Medicare and received Supplemental Security Income. See 42 U.S.C. § 1395ww(d)(5)(F)(vi)(1). CMS determines this Medicare-SSI fraction by matching Medicare-patient billing records with individual SSI records maintained by the Social Security Administration; the Agency then provides that fraction to the fiscal intermediary calculating the DSH adjustment and reimbursement entitlement. See 75 Fed Reg. 50, 276 (Aug. 16, 2010).

C. CMS Ruling 1498-R

So what could possibly go wrong? A few years back, this convoluted scheme came *265 under attack, resulting in a decision by a fellow judge in this district that required HHS to tweak its Medicare-SSI fraction. See Baystate Med. Ctr. v. Leavitt, 587 F.Supp.2d 37 (D.D.C.2008), as amended, 587 F.Supp.2d 44 (D.D.C.2008). In response, in 2010, CMS published a ruling that attempted to fix some of the issues raised, by making three alterations to how the fraction was calculated. See CMS Ruling 1498-R, 2010 WL 3492477 (Apr. 28, 2010). That Ruling in part rejiggered the process for matching Medicare and SSI records. See id. at *2.

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Bluebook (online)
209 F. Supp. 3d 261, 2016 U.S. Dist. LEXIS 127095, 2016 WL 5107010, Counsel Stack Legal Research, https://law.counselstack.com/opinion/empire-health-foundation-v-burwell-dcd-2016.