Centro Radiologico Rolon, Inc. v. United States

• Decision Date: 31 March 2017
• Docket Number: CIVIL NO. 14-1611 (PG)
• Parties: CENTRO RADIOLOGICO ROLON, INC., ET AL. Plaintiffs, v. UNITED STATES OF AMERICA, ET AL., Defendants.
• Court: U.S. District Court — District of Puerto Rico

CENTRO RADIOLOGICO ROLON, INC., ET AL. Plaintiffs, v. UNITED STATES OF AMERICA, ET AL., Defendants.

CIVIL NO. 14-1611 (PG)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

March 31, 2017

OPINION AND ORDER

Plaintiffs Centro Radiologico Rolon, Inc. ("CRR"), and its owners Cesar del Valle and Maite Rolon (collectively, the "plaintiffs") filed the instant action against defendants the United States of America; the United States Department of Health and Human Services ("HHS"); the United States Attorney for the District of Puerto Rico, Rosa Emilia Rodriguez-Velez; the Secretary of HHS; the Attorney General of the United States; and First Coast Services Options, Inc. ("First Coast"), a Center for Medicare and Medicaid Services ("CMS") contract carrier (collectively, the "defendants"), seeking judicial review of a final decision issued by the Secretary of the HHS affirming the revocation of CRR's Medicare enrollment and billing privileges. See Docket No. 1. Plaintiffs also request a writ of mandamus, declaratory judgment, and temporary restraining order or preliminary injunction. Id. at ¶¶ 38-40.

Before the court is the defendants' motion for judgment on the pleadings, or in the alternative, to dismiss (Docket No. 15),¹ and the plaintiffs' opposition thereto (Docket No. 34). After a close examination of the evidence on record and a careful review of the applicable statutory and case law, the court GRANTS the defendants' motion for the reasons explained below.

I. STANDARD OF REVIEW

A. Motion for Judgment on the Pleadings

Rule 12(c) of the Federal Rules of Civil Procedure allows a party, "[a]fter the pleadings are closed but within such time as not to delay the trial, [to] move for judgment on the pleadings." Courts treat a Rule 12(c) motion for judgment on the pleadings "much like a Rule 12(b)(6) motion todismiss." Pérez-Acevedo v. Rivero-Cubano, 520 F.3d 26, 29 (1st Cir. 2008) (citing Curran v. Cousins, 509 F.3d 36, 43-44 (1st Cir. 2007)). Because a Rule 12(c) motion "calls for an assessment of the merits of the case at an embryonic stage, the court must view the facts contained in the pleadings in the light most favorable to the nonmovant and draw all reasonable inferences therefrom" in the nonmovant's behalf. See R.G. Financial Corp. v. Vergara-Nunez, 446 F.3d 178, 182 (1st Cir. 2006). Nonetheless, to survive a motion under Rule 12(c), a complaint must set forth factual allegations that "raise a right to relief above the speculative level, on the assumption that all the allegations in the complaint are true." Perez-Acevedo, 520 F.3d at 29 (citing Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007), as the standard applicable to a Rule 12(b)(6) motion and "by extension, a Rule 12(c) motion").

When assessing the merits of a Rule 12(c) motion, the court "may consider documents the authenticity of which are not disputed by the parties; documents central to plaintiffs' claim; and documents sufficiently referred to in the complaint." Curran v. Cousins, 509 F.3d 36, 44 (1st Cir. 2007)(internal quotation marks omitted). "This is true even when the documents are incorporated into the movant's pleadings." Id. (citing Beddall v. State Street Bank and Trust Co., 137 F.3d 12, 17 (1st Cir. 1998) ("When, as now, a complaint's factual allegations are expressly linked to-and admittedly dependent upon—a document [offered by the movant] (the authenticity of which is not challenged), that document effectively merges into the pleadings and the trial court can review it ....")).

B. Scope of Review of Administrative Decision

A Medicare provider or supplier whose Medicare enrollment or billing privileges are revoked may have a hearing and seek judicial review of the Secretary's final decision under Section 1866(j) of the Social Security Act.² 42 U.S.C. § 1395cc(h)(1)(A), (j)(8) (incorporating 42 U.S.C. § 405(g) to the Medicare statute); see also 42 C.F.R. § 498.1. The scope of judicial review is narrow, as "[t]he findings of the Secretary as to any fact, if supportedby substantial evidence, shall be conclusive...." 42 U.S.C. §405(g).³ Section 405(g) gives the district court the "power to enter, upon the pleadings and the transcript of the record, a judgment affirming, modifying, or reversing the decision of the [Secretary], with or without remanding the cause for a rehearing." 42 U.S.C. § 405(g).

The First Circuit has explained that even if the administrative record supports more than one conclusion, the Secretary's decision must be upheld "if a reasonable mind, reviewing the evidence in the record as a whole, could accept it as adequate to support his conclusion." Shaw v. Sec'y of Health & Human Servs., 25 F.3d 1037 (1st Cir. 1994) (quoting Ortiz v. Sec'y of Health & Human Servs., 955 F.2d 765, 769 (1st Cir. 1991)); see also Class-Soto v. Comm'r of Soc. Sec., Civil No. 08-1802 (SEC), 2010 WL 1416033, at *1 (D.P.R. Mar. 31, 2010) (citing Ortiz, 955 F.2d at 769) (noting that under First Circuit case law the determination of substantiality must be made on the record as a whole). It has also stated that a further gloss lies atop the basic principles of a judicial review when Congress has entrusted an agency with rulemaking authority. See Maine Med. Ctr., 841 F.3d at 17. In such cases:

[p]articular deference is owed to the agency's interpretation of its own regulations.... That deference is most pronounced when the issue involves "a complex and highly technical regulatory program," such as Medicare, "in which the identification and classification of relevant criteria necessarily require significant expertise and entail the exercise of judgment grounded in policy concerns."

Maine Med. Ctr. v. Burwell, 841 F.3d 10, 17 (1st Cir. 2016) (citation omitted). After carefully evaluating the administrative record, the court concludes that substantial evidence supports the final decision challenged by plaintiffs.

II. BACKGROUND

The Medicare Program — An Overview

The Medicare program provides health insurance benefits to individuals over the age of sixty-five and to individuals with certain disabilities. 42 U.S.C. § 1395cc. Congress has granted the Secretary of the HHS broad authority to issue rules and regulations pertaining to the administration of Medicare.See e.g. 42 U.S.C. §§ 1302(a) and 1395hh(a)(1). Relevant to this case is that which sets forth the enrollment process for providers and suppliers wishing to participate in Medicare. Successful completion of the enrollment process allows providers and suppliers to receive billing privileges and a billing number.⁴ See 42 C.F.R. §§ 424.500. The regulation also requires participants to resubmit and revalidate their Medicare enrollment information every five years in order to maintain billing privileges. See 42 C.F.R. § 424.515.⁵

CMS, a component of the HHS, administers Medicare. CMS outsources regulatory review to private entities known as Medicare administrative contractors (or "MACs"). MACs are also tasked with conducting first-level appeals of administrative decisions denying Medicare enrollment or revoking billing privileges. See 42 U.S.C. § 1395kk-1(a)(4). In our case, CMS contracted First Coast to administer compliance and credentialing standards in Puerto Rico, where CRR is based. Docket No. 1 at ¶¶ 6 and 10.

2011 Revalidation of Medicare Enrollment

CRR is an Independent Diagnostic Testing Facility ("IDTF") enrolled in the Medicare program since 2002.⁶ Id. at ¶ 11. According to CRR's enrollment forms, the facility performs X-rays, as well as specialized diagnostic tests such as MRI scans, CT scans, DEXA (or bone density) scans, sonograms, and mammographies. Docket No. 20-1 at pp. 59-74. Plaintiffs readily concede that to maintain its billing number and privileges, CRR was required to resubmit and revalidate its enrollment information periodically in accordance with the governing regulations. Docket No. 1 at ¶ 12. See 42 C.F.R. § 424.515.

On July 12, 2011, First Coast sent CRR a revalidation request stating the time limit (60 days) for submitting the applicable enrollment application and all supporting documentation to CMS in accordance with 42 C.F.R. § 424.515. Docket No. 20-1 at pp. 20-21. CRR failed to do so, and on September 19, 2011, First Coast notified its decision to revoke CRR's billing privileges with an effective date of October 19, 2011. Docket No. 1 at ¶ 13; Docket No. 20-1 at pp. 102-103. As a result, CRR would not be eligible to reapply for enrollment in Medicare for a period of one year. The letter also listed the alternativesfor CRR to appeal the decision, including that of submitting a corrective action plan (or "CAP") within 30 days.⁷ Id.

Corrective Action Plan

On October 3, 2011, First Coast received CRR's CAP. Docket No. 20-1 at pp. 109-113. The additional documentation submitted by CRR in support thereof was received by First Coast on October 13 and 14, 2011. Id. at pp. 114-136. By letter dated November 1, 2011, First Coast notified CRR its decision to deny the CAP based on CRR's failure to furnish all required information and documentation to process the request. That information included, without limitation: CRR's identifying information (type of supplier and correspondence address), identification information as to CRR's owners, directors/officers, authorized officials, and delegated officials, and information pertaining to the IDTF's interpreting and supervising physicians (e.g., names, license/certification numbers, and issue dates).⁸ Docket No. 21-1 at pp. 91-94.

On November 5, 2011, plaintiffs requested reconsideration of the revocation decision with a senior staff member from First Coast's Provider Enrollment Appeals Department. Id. at pp. 95-96. On December 15, 2011, the appeals staff member issued an on-the-record decision affirming the revocation. Docket No. 22-1 at pp. 69-73. On January, 23, 2012, plaintiffs appealed First Coast's reconsidered decision with an HHS administrative law judge ("ALJ").⁹ Id. at page 74. Soon...