Your Home Visiting Nurse Services, Inc. v. Secretary of Health and Human Services, 96-5525

Citation132 F.3d 1135
Decision Date22 December 1997
Docket NumberNo. 96-5525,96-5525
PartiesMedicare & Medicaid Guide P 45,968 YOUR HOME VISITING NURSE SERVICES, INC., Plaintiff-Appellant, v. SECRETARY OF HEALTH AND HUMAN SERVICES, Defendant-Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (6th Circuit)

Diana L. Gustin (argued and briefed), Knoxville, TN, for Plaintiff-Appellant.

Howard H. Lewis (argued and briefed), Social Security Administration, Office of General Counsel, Atlanta, GA, D. Gregory Weddle, Asst. U.S. Attorney (briefed), Office of the U.S. Attorney, Knoxville, TN, for Defendant-Appellee.

Before: LIVELY, MERRITT, and SUHRHEINRICH, Circuit Judges.

MERRITT, Circuit Judge.

We are asked once again to review and construe federal health care statutes and regulations governing reimbursement to a "provider" of services.

The plaintiff, Your Home Visiting Nurse Service, Inc., provides home nursing services to Medicare beneficiaries and receives reimbursement from Medicare. This program is administered by the United States Department of Health and Human Services. As part of the reimbursement procedures, Your Home submits annual cost reports to Blue Cross and Blue Shield of South Carolina, a fiscal intermediary acting as the agent of defendant, the Secretary of Health and Human Service.

Your Home sought to reopen cost reports submitted to Blue Cross for fiscal year 1989 due to findings of "new and material" evidence that the reports should be modified. Blue Cross declined to reopen the cost reports. Your Home then appealed Blue Cross's denial to reopen the cost reports to the Provider Reimbursement Review Board. The Review Board found that it lacked jurisdiction to review a fiscal intermediary's decision not to reopen the plaintiff's 1989 cost reports. Your Home appealed the denial of jurisdiction by the Review Board to the district court. The district court dismissed the complaint, upholding the Review Board's determination that it lacked jurisdiction and further holding that the district court did not have federal question or mandamus jurisdiction to review directly the fiscal intermediary's decision. A timely appeal to this Court followed. For the reasons set forth below, this Court affirms the judgment of the district court.

This appeal concerns four cost reports that Your Home submitted for the 1989 fiscal year. Blue Cross issued notices of program reimbursement pursuant to 42 C.F.R. § 405.1803 for these cost reports, setting out the reimbursement due and listing the expenses allowed and disallowed. Your Home did not appeal any of the four notices of program reimbursement to the Review Board within the 180-day appeal period specified by statute, 42 U.S.C. § 1395oo. Your Home, however, did file a timely request with Blue Cross to reopen the 1989 cost reports pursuant to 42 C.F.R. § 405.1885 on the ground that Your Home had discovered "new and material evidence" affecting its reimbursement. In particular, Your Home alleged that a prior fiscal intermediary calculated the applicable owner compensation rates incorrectly for the 1987 fiscal year, which then in turn affected the 1989 cost reports.

Your Home raises three issues on appeal: (1) whether the Provider Reimbursement Review Board has jurisdiction to review a fiscal intermediary's denial of a request to reopen a Medicare cost report; (2) whether the district court has federal question jurisdiction to review a fiscal intermediary's denial of a request to reopen a Medicare cost report and (3) whether the district court has mandamus jurisdiction to review a fiscal intermediary's denial of a request to reopen a Medicare cost report. We will address each of these issues separately below. 1

1. The Review Board's Jurisdiction

42 U.S.C. § 1395oo(a) states:

Any provider ... which has filed a required cost report ... may obtain a hearing with respect to such cost report by a Provider Reimbursement Review Board ... if [in addition to other requirements that are not at issue] (1) such provider (A)(i) is dissatisfied with a final determination of the ... fiscal intermediary ... as to the amount of total program reimbursement due the provider....

Your Home's argument turns on whether a fiscal intermediary's denial of a request to reopen is unambiguously a "final determination ... as to the amount of total program reimbursement due the provider" within the plain meaning of that phrase.

The reopening procedure was created by regulation rather than statute. The Medicare statute does not require, or even mention, a reopening procedure. Nevertheless, the regulations promulgated by the Secretary specify that a fiscal intermediary's determination "may be reopened" (emphasis added) when a request to reopen is made within three years of the determination. 42 C.F.R. § 405.1885(a). The regulations specify, however, that "[j]urisdiction for reopening a determination or decision rests exclusively with that administrative body that rendered the last determination or decision." 42 C.F.R. § 405.1885(c). The criteria for reopening are set forth in the Provider Reimbursement Manual, which provides:

Whether or not the intermediary will reopen a determination, otherwise final, will depend upon whether new and material evidence has been submitted, or a clear and obvious error was made, or the determination is found to be inconsistent with the law, regulations and rulings, or general instructions.

Provider Reimbursement Manual § 2931.2.

Although the regulations specify that new determinations after a cost report has been reopened are subject to review in the same manner as initial decisions, 42 C.F.R. § 405.1889, the regulations are silent as to whether a decision not to reopen is subject to review. The Provider Reimbursement Manual, however, states: "A refusal by the intermediary to grant a reopening requested by the provider is not appealable to the Board...." Provider Reimbursement Manual, Appendix A, p B.4.

The Provider Reimbursement Review Board found that it lacked jurisdiction based on the above language in the Provider Reimbursement Manual. The district court affirmed, construing the Provider Reimbursement Manual language as an interpretive rule pursuant to Shalala v. Guernsey Mem. Hosp., 514 U.S. 87, 115 S.Ct. 1232, 131 L.Ed.2d 106 (1995), and deferring to the Secretary's interpretation of the Review Board's jurisdiction pursuant to Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). At least two circuit courts have also held that the Review Board does not have jurisdiction over refusals to reopen based on the language in the Manual. Good Samaritan Hosp. Reg'l Med. Ctr. v. Shalala, 85 F.3d 1057 (2d Cir.1996); Athens Community Hosp., Inc. v. Schweiker, 743 F.2d 1, 4 n. 1 (D.C.Cir.1984); Saint Mary of Nazareth Hosp. Ctr. v. Schweiker, 741 F.2d 1447 (D.C.Cir.1984) (when fiscal intermediary reopens with respect to some, but not all, issues, Provider Reimbursement Review Board lacks jurisdiction to review partial denial of reopening).

Your Home argues that deference to the Secretary's interpretation in the Manual is inappropriate here because that interpretation is contrary to the plain meaning of the statute. In particular, Your Home argues that a denial of a reopening request is plainly a "final determination" as that phrase is used in the statute. Your Home attempts to bolster this argument by relying on the presumption that administrative actions are subject to judicial review. See Bowen v. Michigan Academy, 476 U.S. 667, 670, 106 S.Ct. 2133, 2135-36, 90 L.Ed.2d 623 (1986).

In Good Samaritan Hospital, the Second Circuit explained its holding as follows:

the plain meaning of [42 U.S.C.] § 1395oo(a) does not compel a holding that a reopening denial is a 'final determination' of the amount of total program reimbursement. To the contrary, we believe that the statute may be construed permissibly as stating that a reopening denial is a refusal to revisit the final determination. .... "[W]hile ... a decision not to reopen is in some sense 'final,' it does not, in and of itself, establish an amount of total program reimbursement [as required by the statute].

Instead it is a final determination that there are not grounds on which to reconsider a previous final determination as to the amount of total program reimbursement.

Good Samaritan Hosp., 85 F.3d at 1061 (quoting Good Samaritan Hosp. Reg'l Med. Ctr. v. Shalala, 894 F.Supp. 683 (S.D.N.Y.1995)). In light of this statutory ambiguity, deference to the Secretary's regulations and interpretations is appropriate.

This conclusion is bolstered by the Supreme Court's holding in Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977). In Sanders, an Administrative Law Judge denied a social security disability claimant's request to reopen a claim and the claimant sought judicial review. The claimant argued that the district court had jurisdiction pursuant to section 205(g) of the Social Security Act, which provides: "Any individual, after any final decision of the Secretary made after a hearing to which he was a party ... may obtain a review of such decision by a civil action commenced within sixty days...." 42 U.S.C. § 405(g). The Supreme Court held that this did not confer jurisdiction because the Social Security Act does not require hearings on petitions to reopen. Moreover, the Court suggested that there would be no federal court jurisdiction even if the Secretary promulgated regulations allowing for hearings on such petitions:

[T]he opportunity to reopen final decisions and any hearing convened to determine the propriety of such action are afforded by the Secretary's regulations and not by the Social Security Act. Moreover, an interpretation that would allow a claimant judicial review simply by filing and being denied a petition to reopen his claim would frustrate the congressional purpose ... to impose a 60-day limitation upon judicial review of...

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