New Orleans Regional Physician Hospital Organization, Inc v. United States

CourtUnited States Court of Federal Claims
DecidedOctober 27, 2015
Docket11-541
StatusPublished

This text of New Orleans Regional Physician Hospital Organization, Inc v. United States (New Orleans Regional Physician Hospital Organization, Inc v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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New Orleans Regional Physician Hospital Organization, Inc v. United States, (uscfc 2015).

Opinion

In The United States Court of Federal Claims No. 11-541C (E-Filed: October 27, 2015)

) NEW ORLEANS REGIONAL PHYSICIAN ) HOSPITAL ORGANIZATION, INC., d/b/a ) PEOPLES HEALTH NETWORK, ) ) Motion for Reconsideration; RCFC Plaintiff, ) 54(b); Discovery; RCFC 26(b)(1) ) v. ) ) THE UNITED STATES, ) ) Defendant. ) )

Monica Ann Frois, New Orleans, La., for plaintiff.

Antonia Ramos Soares, Trial Attorney, with whom were Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Robert E. Kirschman, Jr., Director, and Franklin E. White, Jr., Assistant Director, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, D.C., for defendant.

ORDER

Plaintiff, New Orleans Regional Physician Hospital Organization, Inc., d/b/a Peoples Health Network (PHN or plaintiff), has filed a motion for reconsideration of a portion of the court’s August 21, 2015 Opinion and Order. 1 Pl.’s Mot., Sept. 18, 2015, ECF No. 121-1; see generally New Orleans Reg’l Physician Hosp. Org., Inc. v. United States (New Orleans), 122 Fed. Cl. 807 (2015). Plaintiff maintains that “the current circumstances of this case and basic principles of fairness and justice warrant reconsideration of the Court’s denial of PHN’s request for discovery related to other

1 Plaintiff’s briefing in this case generally consists of a short motion, accompanied by a more substantive memorandum in support of the respective motion. See, e.g., ECF Nos. 33 & 33-1; 82 & 82-1; 121 & 121-1. Although the court refers to certain filings herein as plaintiff’s motion (or Pl.’s Mot.), the court is generally citing to the memoranda filed in support of said motion. [Medicare Advantage Organizations (MAOs)].” Pl.’s Mot. 1. The United States (defendant) responds that plaintiff has failed to meet its burden of establishing that reconsideration is warranted. 2 Def.’s Resp. 4, Sept. 30, 2015, ECF No. 125.

For the reasons set forth herein, plaintiff’s motion for reconsideration is DENIED.

I. BACKGROUND

A. Breach of Contract Action

PHN is a Medicare Advantage Health Plan that provides managed care services to Medicare recipients in approximately fifteen Louisiana parishes around New Orleans. 3 Am. Compl. ¶¶ 1, 9, Oct. 21, 2011, ECF No. 6-1. In August 2005, PHN had approximately 35,000 Medicare Advantage enrollees. Id. ¶ 11. This amounted to roughly 70% of all beneficiaries enrolled in Medicare Advantage plans in New Orleans. Id. Between January 1, 2004 and December 31, 2006, PHN contracted with the Centers for Medicare and Medicaid Services (CMS), part of the United States Department of Health and Human Services (HHS), through two Medicare Advantage contracts. Id. ¶¶ 7, 8. Pursuant to these contracts, CMS made monthly payments to PHN to cover the medical costs of PHN’s Medicare recipients. Id. ¶ 9.

Hurricane Katrina struck the New Orleans area on August 29, 2005, and Hurricane Rita followed a few weeks later. Id. ¶¶ 10, 12. As a result of the levee failures around New Orleans and other damage caused by the hurricanes, most of the city’s residents left New Orleans—and therefore PHN’s service area—for extended periods of time. Id. ¶ 12.

PHN alleges that, in early September 2005 and repeatedly thereafter, CMS “unilaterally modified” the contracts in order to ensure that PHN’s Medicare Advantage enrollees continued receiving medical services regardless of where they had settled and regardless of the prevailing reimbursement rates for Medicare Advantage Plans or medically-related services in those areas. Id. ¶ 13. PHN also alleges, among other things, that CMS reduced its monthly payments to PHN based on the new, temporary domiciles of PHN’s re-located enrollees. Id. ¶ 14. According to PHN, CMS made “oral representations” that it would reimburse PHN for the higher costs arising from defendant’s unilateral contract modifications and directives, but has since refused to 2 Attached to defendant’s response is an appendix (Def.’s App.), ECF No. 125-1, consisting of various documents to which the court cites herein. 3 On August 26, 2011, PHN filed its complaint in this court. Compl., ECF No. 1. On October 21, 2011, PHN filed an amended complaint correcting a typographical error. See Pl.’s Mot. Amend Pleadings, ECF No. 6; Am. Compl, ECF No. 6-1.

2 provide any reimbursement. Id. ¶¶ 18, 22. PHN avers that these unilateral modifications were in breach of both contracts, causing PHN damages in excess of $27 million. Id. ¶¶ 20–23.

B. Summary of the Procedural History and Relevant Discovery Disputes 4

On June 1, 2012, the court put in place a discovery schedule. Order, ECF No. 20. Since that time, the parties have been entangled in numerous discovery and scheduling disputes.

On November 29, 2012, PHN served CMS with written discovery requests. See Def.’s App. A001–14, ECF No. 125-1. Relevant here are request for production numbers 11 and 27, which state, in pertinent part:

Request for Production No. 11:

Please produce legible photocopies of any and all documents [and] communications . . . of any kind evidencing instructions . . . provided by you to any [MAO] . . . following Hurricane Katrina and/or Hurricane Rita, pertaining to, among other things, reimbursement, medically-related services, enrollee’s domicile, displaced enrollees, relocated enrollees, medical management, cost-sharing, co-pays, out-of-pocket expenses, deductibles, utilization of services to enrollees, and/or prior medical authorization requirements.

....

Request for Production No. 27:

Please produce legible photocopies of all documents that refer to or relate to how and what other [MAOs] were paid, re-paid, and/or reimbursed by you following Hurricanes Katrina and Rita for monies lost and/or increased costs borne as a result of and/or related to alternations of standard and/or general requirements for referrals, prior authorizations, cost-sharing, area-of-service, enrollment, re-enrollment, disenrollment, and risk scores.

Id. at A008, A011. CMS’s contracts with other MAOs are substantially the same as its

4 A more complete history of the parties’ discovery disputes is provided in the court’s August 21, 2015 order. New Orleans Reg’l Physician Hosp. Org., Inc. v. United States (New Orleans), 122 Fed. Cl. 807, 810–13 (2015).

3 contracts with PHN. See Pl.’s Mot. 4.

Instead of responding to the requests for fact discovery, defendant moved for summary judgment on various grounds on January 31, 2013. Def.’s Mot., ECF No. 26. Defendant argued that the contracts at issue incorporate section 1135 of the Social Security Act, and thereby authorize the Secretary of HHS to waive certain Medicare requirements during public health emergencies. See id. at 19–28. Defendant also argued that PHN’s claim that CMS orally represented that it would reimburse PHN for its hurricane-related financial losses fails as a matter of law because the subject contracts, by their terms, could be modified only in writing. See id. at 32–34.

On February 19, 2013, plaintiff filed a motion pursuant to Rule 56(d) requesting that the summary judgment motion either be deferred or denied, to allow for limited discovery. Pl.’s Rule 56(d) Mot., ECF No. 29. On March 5, 2013, plaintiff filed its first motion to compel, requesting that the court compel defendant to produce full and complete responses to plaintiff’s first set of interrogatories and requests for production. Pl.’s 1st Mot. Compel 1, ECF No. 33.

On April 16, 2013, Judge George W. Miller—to whom the case was then assigned—entered an order staying further briefing on defendant’s summary judgment motion and authorizing plaintiff to engage in a limited, ninety-day period of discovery. See Order, ECF No. 46.

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