Trust Under the Will of James Wills v. Burwell

306 F. Supp. 3d 684
CourtDistrict Court, E.D. Pennsylvania
DecidedJanuary 25, 2018
DocketCIVIL ACTION NO. 16–6615
StatusPublished
Cited by2 cases

This text of 306 F. Supp. 3d 684 (Trust Under the Will of James Wills v. Burwell) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Trust Under the Will of James Wills v. Burwell, 306 F. Supp. 3d 684 (E.D. Pa. 2018).

Opinion

EDUARDO C. ROBRENO, District Judge

Plaintiff Wills Eye Hospital appeals the agency decision denying its application to enroll in Medicare as a hospital. The agency denied the application on the basis that Wills Eye was not sufficiently engaged in providing inpatient care.1

Before the Court are the parties' cross-motions for summary judgment on the administrative record. For the reasons discussed below, the Court will GRANT the Secretary's Motion for Summary Judgment.2

I. BACKGROUND

Medicare, established under Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq. (2001), provides a system of federally-funded health insurance for eligible elderly and disabled individuals. Medicare is administered by the Secretary of the Department of Health and Human Services. Heckler v. Ringer, 466 U.S. 602, 605, 104 S.Ct. 2013, 80 L.Ed.2d 622 (1984). The Secretary delegates responsibility for administering the Medicare program to the Centers for Medicare & Medicaid Services Program ("CMS"). See, e.g., Reg'l Med. Transp., Inc. v. Highmark, Inc., No. CIV.A. 04-1969, 2008 WL 936925, at *1 (E.D. Pa. Apr. 2, 2008). Under the Medicare statute, hospitals and other health care providers enter into written provider *688agreements with the Secretary in order to render services to Medicare beneficiaries and receive reimbursement. § 1395cc.

A. Factual Background

The Wills Eye Trust, doing business as Wills Eye Hospital, is a testamentary trust administered by the Commonwealth of Pennsylvania. See Compl. ¶ 12, ECF No. 11. From 2002 to 2006, Wills Eye operated a hospital at 900 Walnut Street in Philadelphia. In 2006, Wills Eye sold its inpatient program at 900 Walnut Street to Thomas Jefferson University Hospital and partnered with Jefferson as an academic affiliate for the provision of inpatient care. Id. at ¶¶ 31-32; Admin. Rec. ("AR") 977. In 2002, Wills Eye created a separate facility at 840 Walnut Street, and that facility began participating in the Medicare program as an Ambulatory Surgical Center. Compl. ¶¶ 31-21. In 2011, Wills Eye renovated the 840 Walnut facility and added four inpatient beds. Id. at ¶¶ 34, 36; AR 3, 14, 40. In 2013, Wills Eye received state licensure of the 840 Walnut Street facility as a hospital from the Pennsylvania Department of Health, and applied for Medicare enrollment as a hospital. AR 14.

To participate in Medicare as a hospital, an entity must enroll in the program by filing an enrollment form; receive approval of a Medicare intermediary; and obtain a hospital license from the state in which it is located. The state licensing agency conducts a survey of all prospective enrollees to determine, on behalf of CMS, if the applicant satisfies the Medicare Conditions of Participation for hospitals. See 42 C.F.R. §§ 482.11 through 482.58. Additionally, such an applicant must qualify as a "hospital" under section 1861 of the Medicare Act. See 42 C.F.R. § 488.3(a)(1).

The Medicare Act defines "hospital," in relevant part, as an institution that "is primarily engaged in providing, by or under the supervision of physicians, to inpatients (A) diagnostic services and therapeutic services for medical diagnosis, treatment, and care of injured, disabled, or sick persons, or (B) rehabilitation services for the rehabilitation of injured, disabled, or sick persons ...". 42 U.S.C. § 1395x(e)(1). Similarly, CMS's regulations provide, in relevant part, that a "qualified hospital" is a facility that "[i]s primarily engaged in providing, by or under the supervision of doctors of medicine or osteopathy, inpatient services for the diagnosis, treatment, and care or rehabilitation of persons who are sick, injured, or disabled ...". 42 C.F.R. § 409.3.

The parties do not dispute that Wills Eye fulfilled the state licensing requirements as a hospital, and was surveyed and recommended for Medicare enrollment as a hospital by the Medicare intermediary. Pl. Mot. 20, ECF No. 20; Def. Mot. 13-14, ECF No. 22. Even so, CMS denied Wills Eye's application to enroll in Medicare as a hospital. Pl. Mot. 22, ECF No. 20. CMS based this denial on its determination that Wills Eye was not a "hospital" as defined by § 1395x(e)(1) because it "[was] not primarily engaged in providing inpatient services." Id. at 22.

B. The Administrative Appeals

Wills Eye sought reconsideration and contended, inter alia, that CMS was subjecting it to a new enrollment standard without having first adopted that standard through rulemaking. Pl. Mot. at 22, ECF No. 20. Wills Eye also noted that, according to hospital survey data obtained through the American Hospital Association and the Department of Health, eighty-four percent of hospitals then enrolled in Medicare did not have a "greater inpatient than outpatient volume," and that thirty-seven percent of hospitals participating in Medicare had lower percentages of inpatient *689care than did Wills Eye. Id. at 23. This data included other specialty eye and ear hospitals that CMS had enrolled in Medicare. Id. Nevertheless, CMS denied Wills Eye's request on reconsideration, reiterating its reasoning and justification.

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306 F. Supp. 3d 684, Counsel Stack Legal Research, https://law.counselstack.com/opinion/trust-under-the-will-of-james-wills-v-burwell-paed-2018.