Chestnut Hill Benevolent Ass'n v. Burwell
| Decision Date | 03 November 2015 |
| Docket Number | Civil Action No. 14–2135(JEB) |
| Citation | 142 F.Supp.3d 91 |
| Parties | Chestnut Hill Benevolent Association, et al., Plaintiffs, v. Sylvia Mathews Burwell, in her official capacity as Secretary of the United States Department of Health and Human Services, Defendant. |
| Court | U.S. District Court — District of Columbia |
Susan Ann Turner, James P. Holloway, Ober Kaler Grimes & Shriver PC, Washington, DC, for Plaintiffs Chestnut Hill Benevolent Association, Arden Wood, Inc., Broadview Inc., and Leaves, Inc.
Joshua M. Kolsky, U.S. Attorney's Office for the District of Columbia, Washington, DC, for Defendant.
JAMES E. BOASBERG
The federal Medicare program reimburses religious nonmedical healthcare institutions (RNHCIs) for the provision of specific types of nonmedical care to certain religious patients. In addition, reimbursement is available for the RNHCIs' nurse-training programs if such programs satisfy articulated criteria. The four Plaintiffs here—all Christian Science nursing facilities—desire reimbursement for running multi-year nurse-training programs. They bring suit seeking to undo two decisions by the Administrator for the Centers for Medicare and Medicaid Services (CMS) that concluded Plaintiffs were not entitled to such reimbursements because they failed to meet certain regulatory criteria. Both sides have now moved for summary judgment. As the Court ultimately agrees that Plaintiffs' programs were not sufficiently accredited, it will affirm CMS's decision and enter judgment in Defendant's favor.
Now nearly 50 years old, the Medicare statute is something of a palimpsest: Congress erases old terms to make room for new ones, but vestiges remain. A little history, then, goes a long way in making intelligible certain statutory and regulatory language that, at first blush, seems mired in impenetrable bureaucratese.
Medicare was enacted by Congress in 1965 to provide federally funded health insurance for the aged and disabled. See 42 U.S.C. § 1395 et seq .
; id. § 1395c. At issue in this dispute is Medicare Part A, which authorizes the government—i.e., CMS—to reimburse certain institutions, like hospitals and skilled nursing facilities, for providing inpatient and similar types of care. See id. § 1395d. (The Court uses CMS to refer to both that entity and its pre–2001 predecessor, the Health Care Financing Administration.) The institutions providing such care are known as "provider[s] of services" or "providers" under the statute, see id. § 1395x(u), which terms broadly encompass hospitals, skilled nursing facilities, and, as of 1997, RNHCIs. See id. § 1395x(y)(1). The last are inpatient institutions that "provide[ ] only nonmedical nursing items and services exclusively to patients who choose to rely solely upon a religious method of healing and for whom the acceptance of medical health services would be inconsistent with their religious beliefs." Id. § 1395x(ss)(1)(C).
Although the term RNHCI first appeared in 1997, the statute had since its inception provided an express accommodation for members of the First Church of Christ, Scientist (or "Mother Church")—who object to receiving medical care—by allowing Christian Scientists, in lieu of receiving inpatient medical care from hospitals, to receive reimbursable nonmedical care from a "Christian Science sanatorium operated, or listed and certified, by the [Mother Church]." Pub.L. No. 89–97 §§ 1861(e), (y), 79 Stat. 286, 315, 324 (1965). That provision remained in effect until 1996, when a federal district court held that the statute's exemptions, expressed as they were in "sect-specific" terms, " ‘cross[ed] the line from permissible accommodation to impermissible establishment’ " of religion in violation of the First Amendment's Establishment Clause. Children's Healthcare is a Legal Duty, Inc. v. Vladeck, 938 F.Supp. 1466, 1485 (D.Minn.1996)
(quoting Bd. of Educ. of Kiryas Joel Vill. Sch. Dist. v. Grumet, 512 U.S. 687, 710, 114 S.Ct. 2481, 129 L.Ed.2d 546 (1994) ). This precipitated Congress's amendment of the Medicare statute in 1997 to excise all Christian Science-specific references and replace them with references to RNHCI—Congress's sect-neutral neologism. See Balanced Budget Act of 1997, Pub.L. No. 105–33 § 4454, 111 Stat. 251 (1997) (codified at 42 U.S.C. § 1395x(ss) ). All of this notwithstanding, it appears that the only Medicare-certified RNHCIs—of which there were only 17 during the relevant period—are Christian Science facilities. See Administrative Record II (A.R.II) at 4 n.4 (Second CMS Decision).
(emphasis added). For this reason, the government committed to "share in the support of educational activities customarily or traditionally carried on by providers in conjunction with their operations," but clarified that it was not the Secretary's intent that educational institutions already running such programs should shift those costs to providers as a way of obtaining Medicare reimbursement. See id. ; Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 515, 114 S.Ct. 2381, 129 L.Ed.2d 405 (1994).
At the time, these educational costs—like all other costs associated with inpatient treatment—were reimbursed under "reasonable cost" principles, meaning the provider would receive payments for any "cost[s] actually incurred," less expenditures "found to be unnecessary in the efficient delivery of needed health services." 42 U.S.C. § 1395x(v)(1)(A)
; see id. § 1395f(b). The "reasonable cost" reimbursement regime was straightforward, but it created perverse incentives for providers: "The more they spent, the more they were reimbursed." Tucson Med. Ctr. v. Sullivan, 947 F.2d 971, 974 (D.C.Cir.1991).
To address the problem, Congress substantially revised the regime in 1982 and 1983. For most providers, Congress devised the "Prospective Payment System," under which hospitals would receive reimbursement on a per-discharge basis according to a predetermined, fixed sum. See Social Security Amendments of 1983, Pub.L. No. 98–21, § 601(e), 97 Stat. 65, 152–62 (1983); 42 U.S.C. § 1395ww(d)
. For a smaller subset of providers, including the forerunners of RNHCIs, Congress continued to use "reasonable cost" principles, but fixed the rate at which those providers' inpatient costs could increase. See Tax Equity and Fiscal Responsibility Act of 1982, Pub.L. No. 97–248, § 101, 96 Stat. 324, 331–36 (1982); 42 U.S.C. § 1396x(v). These enactments made clear, however, that neither of the two cost limits would apply to "approved educational activities"—a phrase that, prior to 1983, had appeared only in regulations and not in the statute itself. See 42 U.S.C. § 1395ww(a)(4). Although Congress did not define "approved educational activities," it made clear that such costs were to "pass through" the cost-ceiling regime, allowing providers to obtain reimbursement under the original "reasonable cost" principles. See Cmty. Care Found. v. Thompson, 318 F.3d 219, 222 (D.C.Cir.2003) (citing 42 U.S.C. § 1395ww(a)(4), (d) ). Any educational costs that did not constitute "approved" activities, in contrast, were to be treated as "normal operating costs," see 49 Fed.Reg. 234, 267 (Jan. 3, 1984), meaning they were subject to the cost ceilings imposed by the 1982 and 1983 statutory changes.
Given the congressional silence on the meaning of "approved educational activities," Baptist Health v. Thompson, 458 F.3d 768, 771 (8th Cir.2006)
, the Secretary took care to define the phrase, identifying by regulation those education-related costs that would receive pass-through treatment and those that would not. See 42 U.S.C. § 1395hh
(); see generally id. § 1395f (). From 1982 to 2001, the only activities that were eligible for pass-through treatment were education programs that: (1) graduated personnel in recognized specialties, and (2) were "approved" or accredited by a predetermined "approving bod[y]." See, e.g., 42 C.F.R. § 405.421(e) (1983). As of 2001, however—and critical to the dispute at hand—CMS has defined "approved educational activities" as ...
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