Banner Health v. Burwell, Civil Action No. 10-1638 (CKK)

• Decision Date: 31 March 2016
• Docket Number: Civil Action No. 10-1638 (CKK)
• Citation: 174 F.Supp.3d 206
• Parties: Banner Health f/b/o Banner Good Samaritan Medical Center, et al., Plaintiffs v. Sylvia M. Burwell, Secretary of the U.S. Department of Health and Human Services, Defendant
• Court: U.S. District Court — District of Columbia

174 F.Supp.3d 206

Banner Health f/b/o Banner Good Samaritan Medical Center, et al., Plaintiffs

v.Sylvia M. Burwell, Secretary of the U.S. Department of Health and Human Services, Defendant

Civil Action No. 10-1638 (CKK)

United States District Court, District of Columbia.

Signed March 31, 2016

Stephen P. Nash, Michihiro M. Tsuda, Mimi Hu Brouillette, Sven C. Collins, Squire Patton Boggs, Denver, CO, John Louis Oberdorfer, Samantha R. Petrich, Squire Patton Boggs (U.S.) LLP, Washington, DC, for Plaintiffs.

James C. Luh, U.S. Department of Justice, Washington, DC, for Defendant.

MEMORANDUM OPINION

COLLEEN KOLLAR-KOTELLY, United States District Judge

On September 2, 2015, the Court issued a lengthy Memorandum Opinion and resolved all of the parties' then-pending dispositive motions, including their cross-motions for summary judgment. See Banner Health v. Burwell , 126 F.Supp.3d 28 (D.D.C.2015). In order to put that opinion and this final opinion in context, it is important to note briefly the history of the prior opinions the Court has issued over the years. See Banner Health v. Sebelius , 797 F.Supp.2d 97 (D.D.C.2011) (resolving motion to dismiss); Banner Health v. Sebelius , 905 F.Supp.2d 174 (D.D.C.2012) (resolving renewed motion to dismiss or for judgment on the pleadings); Banner Health v. Sebelius , 945 F.Supp.2d 1 (D.D.C.2013) (resolving motion to compel regarding administrative record) decision vacated in part on reconsideration , No. CV 10–01638 (CKK), –––F.Supp.2d ––––, 2013 WL 11241368 (D.D.C. July 30, 2013) ; Banner Health v. Burwell, 55 F.Supp.3d 1 (D.D.C.2014) (resolving motion to amend complaint); see also Minter Order dated Oct. 14, 2015 (denying Plaintiffs' [151] Motion for Clarification). The Court makes the opinions referenced here and the associated orders part of this opinion in order to provide the necessary context for this Court's final resolution to the remaining issues in this case.

This past September, the Court granted summary judgment to Defendant on all issues except for one issue regarding the fiscal year (“FY”) 2004 fixed loss threshold rulemaking. The Court remanded that rule to the agency to allow the agency to explain its decision regarding its treatment of certain data, or to recalculate the fixed loss threshold for that fiscal year if necessary. Specifically, the Court concluded that it was necessary for the agency “to explain further why it did not exclude the 123 identified turbo-charging hospitals from the charge inflation calculation for FY 2004.” Id. 126 F.Supp.3d at 98, 2015 WL 5164965, at *45. The Court retained jurisdiction only pending the “limited remand to the agency regarding the FY 2004 rulemaking.” Order, ECF No. 149, at 2. Subsequently, the agency published a notice in the Federal Register on January 22, 2016, providing a further explanation for the FY 2004 fixed loss threshold rule. See 81 Fed. Reg. 3,727 (Jan. 22, 2016). The agency determined that no recalculations were necessary. When that Federal Register notice was filed with the Court, the Court noted that the explanation provided by the agency on remand is more detailed and fulsome than the agency's initial explanation and includes analysis that addresses the Court's prior concerns about the deficiency of the original rulemaking. That said, the Court ordered limited additional briefing on February 2, 2016, regarding the sufficiency of that notice in light of the issues that required the remand in the first instance. The supplemental briefing ensures that the parties' positions were fully presented to the Court. Upon consideration of the pleadings,¹ the relevant legal authorities, and the record as a whole, the Court concludes that the agency has satisfied its task on remand and has provided an adequate explanation for the FY 2004 fixed loss threshold rule. Accordingly, the Court GRANTS summary judgment to Defendant on the remaining issue in this case and dismisses this case in its entirety.

Analysis

There are two issues before this Court. First, has the agency satisfied its task on remand in responding to this Court's September 2, 2015, Order? That is, has it explained why the agency “did not exclude the 123 identified turbo-charging hospitals from the charge inflation calculation for FY 2004.” Second, has the agency's explanation in response to that question introduced new problems or inconsistencies? See Alpharma, Inc. v. Leavitt , 460 F.3d 1, 9–10 (D.C.Cir.2006).

Before addressing both of those questions, the Court reiterates the narrow scope of the remaining issues in this case. In ordering the supplemental briefing that has now been filed, the Court emphasized that the supplementary briefing was not an opportunity to revisit issues that the Court has already conclusively decided and that it was not an opportunity for Plaintiffs to expand the modest scope of the issues remaining in this case. Plaintiffs have tried to do so. But the Court need not dignify the arguments that are not properly before the Court by addressing them any further.²

Turning to the first issue that is properly before the Court, the adequacy of the agency's explanation about why it did not exclude the 123 “turbo-charging hospitals” from the FY 2004 calculations, the Court concludes that the agency's explanation is adequate. The Court need not reiterate the agency's explanation at length—enough ink has been spilled in this case already. The Court finds the agency's explanations in its Federal Register notice persuasive. The Court also finds that none of Plaintiffs' arguments undermine the persuasiveness of that explanation, let alone the reasonableness necessary to survive this Court's deferential review. In short, it is reasonable that the agency concluded that the other changes to the fixed loss threshold calculation scheme that were implemented in 2003—as detailed at great length in this Court's September 2, 2015, Memorandum Opinion—were sufficient to account for the problem of turbo-charging.³ It is also sufficient that the agency concluded that excluding the 123 hospitals from the data analysis would hurt, rather than improve, the overall quality of the data.⁴

With respect to the second issue properly before the Court, whether the agency has introduced any new problems into the explanation necessitated by this Court's remand, see Alpharma , 460 F.3d at 9, the Court...