Evangelical Community Hospital v. Becerra

CourtDistrict Court, District of Columbia
DecidedSeptember 30, 2022
DocketCivil Action No. 2021-1368
StatusPublished

This text of Evangelical Community Hospital v. Becerra (Evangelical Community Hospital v. Becerra) 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
Evangelical Community Hospital v. Becerra, (D.D.C. 2022).

Opinion

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _________________________________________ ) EVANGELICAL COMMUNITY ) HOSPITAL, et al., ) ) Plaintiffs, ) ) v. ) ) Case No. 21-cv-01368 (APM) XAVIER BECERRA, ) ) Defendant. ) _________________________________________ )

MEMORANDUM OPINION

I.

Plaintiffs Evangelical Community Hospital (“Evangelical”) and Memorial Healthcare

Center (“Memorial”) are two acute-care hospitals that participate in the Medicare program.

Medicare funding is provided to Plaintiffs in the form of a reimbursement from the Centers for

Medicare and Medicaid Services (“CMS”). To obtain a reimbursement, providers such as

Plaintiffs submit a cost report to a Medicare contractor, who reviews the report and determines the

amount of reimbursement to which the provider is entitled.

Plaintiffs each received four separate reimbursement determinations from their Medicare

contractor covering the cost reporting periods ending in December 2008, 2009, 2010, and 2012

(for Memorial) and in June 2011, 2012, 2013, and 2014 (for Evangelical). Finding fault with the

reimbursement determinations, Plaintiffs initiated a formal hearing process by making a request

for a hearing (“RFH”) before the relevant administrative body tasked with adjudicating Medicare

reimbursement disputes, the Provider Reimbursement Review Board (“the Board”). Each of

Plaintiffs’ hearing requests raised four distinct issues, which were identical across all eight of the hearing requests they made. One of those issues, what the parties referred to as “Issue 4,” is the

subject of the instant action. 1 While the scope and specificity of Issue 4 is contested, Issue 4 raised

the specter of an “incorrect[] calculati[on]” made when determining Plaintiffs’ entitlement to a

Disproportionate Share Hospital payment—an additional reimbursement available to providers

who serve a high percentage of low-income patients.

Through the administrative hearing process, Plaintiffs sought expedited judicial review

(“EJR”) of their claims—an expedited pathway to federal court, through which Plaintiffs can

obtain review of questions of law over which the Board lacks authority. The Board denied

Plaintiffs’ EJR requests and dismissed Issue 4 from all eight appeals. The Board first determined

that Plaintiffs’ issue statements concerning Issue 4 in their RFH were overly vague, in violation of

the agency’s regulations and the Board’s rules. The Board found, in the alternative, that to the

extent Plaintiffs’ RFH could be interpreted to encompass the more granular set of issues discussed

in Plaintiffs’ final moving papers before the Board, Plaintiffs’ failure to raise those issues in their

preliminary moving papers rendered the issues abandoned.

Plaintiffs filed suit before this court, asserting that the Board violated the Administrative

Procedure Act (“APA”) by (1) improperly narrowing the Board’s jurisdiction, as determined by

Congress in the Medicare Act; and (2) arbitrarily and capriciously applying the agency’s

regulations and the Board’s rules to Plaintiffs’ claims. Plaintiffs also seek a writ of mandamus for

the same alleged violations. Defendant in this matter is Secretary of Health and Human Services

Xavier Becerra, in his official capacity.

1 In six of the eight appeals, Plaintiffs withdrew, transferred, or dismissed all other issues, aside from Issue 4, from the appeals. See Def.’s Cross-Mot. for Summ. J., ECF No. 18 [hereinafter Def.’s Cross-Mot.], at 8. In the other two appeals, Plaintiff Memorial transferred two issues from the appeals, leaving Issue 4 and one other issue active. Id.; see also Compl. for Jud. Review, ECF No. 1 [hereinafter Compl.], Ex. 1, ECF No. 1-1 [hereinafter Ex. 1], at 2 n.2. Plaintiff Memorial did not seek EJR on the other issue, and it is not before the court. Def.’s Cross-Mot. at 8–9; Ex. 1 at 2–5.

2 Before the court is Plaintiffs’ Motion for Summary Judgment and Defendant’s Cross-

Motion for Summary Judgment. See Pls.’ Mot. for Summ. J., ECF No. 16 [hereinafter Pls.’ Mot.];

Def.’s Cross-Mot. for Summ. J., ECF No. 18 [hereinafter Def.’s Cross-Mot.]. As discussed below,

Plaintiffs have failed to demonstrate that the Board acted in an arbitrary and capricious manner in

denying Plaintiffs’ EJR request. Accordingly, Defendant’s Cross-Motion for Summary Judgment

is granted, and Plaintiffs’ Motion for Summary Judgment is denied.

II.

Under the Medicare Prospective Payment System, hospitals that provide inpatient services

to covered patients receive payment at a predetermined amount per discharged patient, irrespective

of the actual costs the hospital incurs. 42 U.S.C. § 1395ww(d). However, the statute also provides

for certain payment adjustments beyond the standard per patient payment.

The subject of Plaintiffs’ RFH is an adjustment known as the Disproportionate Share

Hospital adjustment. This additional reimbursement is available to hospitals that serve a

disproportionate number of low-income patients. See id. § 1395ww(d)(5)(F). A provider’s

Disproportionate Share Hospital adjustment is determined by calculating the hospital’s

Disproportionate Patient Percentage—the sum of two fractions commonly known as the Medicaid

Fraction and the Medicare-SSI Fraction. See id. § 1395ww(d)(5)(F)(vi). The Medicaid Fraction

reflects the number of inpatient hospital days attributable to patients eligible for medical assistance

under a state Medicaid plan but who are not entitled to Medicare Part A benefits. Id.

§ 1395ww(d)(5)(F)(vi)(II). The Medicare-SSI Fraction captures the number of inpatient hospital

days attributable to patients who are entitled to both Medicare Part A and Supplemental Social

Security Income (“SSI”) benefits. Id. § 1395ww(d)(5)(F)(vi)(I).

3 At the close of each fiscal year, a hospital submits to a Medicare contractor a cost report

that accounts for its costs during a particular reporting period. See 42 C.F.R. § 405.1801(b) (2022).

The Medicare contractor is responsible for issuing a Notice of Program Reimbursement, which

informs the provider of their final reimbursement payment for the fiscal year. See id. § 405.1803.

If a provider is dissatisfied with the payment amount, then the provider may ultimately appeal to

the Board via the administrative process set forth in the Medicare statute and attendant regulations.

See 42 U.S.C. § 1395oo(a); 42 C.F.R. § 405.1835 (2022).

The Medicare statute lays out three jurisdictional prerequisites that must be met for the

Board to have authority to hear an appeal:

(1) [the] provider . . . is dissatisfied with a final determination of the Secretary as to the amount of the payment [they received];

...

(2) the amount in controversy is $10,000 or more; and

(3) [the] provider files a request for a hearing within 180 days after notice of the intermediary’s final determination.

42 U.S.C. § 1395oo(a).

Final decisions of the Board are subject to judicial review pursuant to the Medicare statute.

See 42 U.S.C.

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Evangelical Community Hospital v. Becerra, Counsel Stack Legal Research, https://law.counselstack.com/opinion/evangelical-community-hospital-v-becerra-dcd-2022.