Erika, Inc. v. United States, 374-77.

Decision Date06 February 1981
Docket NumberNo. 374-77.,374-77.
Citation647 F.2d 129
PartiesERIKA, INC. v. The UNITED STATES.
CourtU.S. Claims Court

Stephen H. Oleskey, Boston, Mass., atty. of record for plaintiff. Timothy H. Gailey and Hale & Dorr, Boston, Mass., of counsel.

Dwight D. Meier, Washington, D. C., with whom was Asst. Atty. Gen. Alice Daniel, Washington, D. C., for defendant. Margaret J. Porter, Dept. of Health and Human Services, Washington, D. C., of counsel.

Before FRIEDMAN, Chief Judge, and DAVIS, NICHOLS, KASHIWA, KUNZIG, BENNETT and SMITH, Judges, en banc.

ON DEFENDANT'S MOTION FOR REHEARING

ORDER

The defendant has requested us to make clear that our opinion of October 22, 1980, 634 F.2d 580 (Ct.Cl.,) was not intended to invalidate a portion of section 5010.1 of the Medicare Carriers Manual.

In that opinion we held that in determining the plaintiff's reimbursable "reasonable charges" for Medicare services, The Prudential Insurance Company of America (Prudential), the plaintiff's insurance carrier, did not comply with the Medicare statute and the implementing regulations of the Secretary of Health, Education, and Welfare. The statute and regulations require that Medicare reimbursement be based upon the customary charge for such services in the locality where rendered during the "calendar year" "preceding" the year for which reimbursement was sought. Prudential based its determination of the plaintiff's reimbursement upon the plaintiff's charges on July 1, and refused to take account of the changes the plaintiff made in those charges, either before or after that date. We held that this was error because "the statute and regulations did not permit Prudential to consider only Erika's charges on a single day in the middle of the preceding calendar year." P. 588.

Section 5010.1 of the Manual provides:

When a carrier does not have adequate statistics on charges for suppliers of medical equipment, prosthetics, ambulance services, or for new services, the fees charged and the price lists in effect as of June 30 of that calendar year only should be used. The intent is to use a price list which can reasonably be assumed not to exceed the median of the prices charged by the supplier for his items and services during the calendar year.

In our decision we were not purporting to, and did not, determine the validity of that provision. All we held was that "under the statute and regulations, Prudential cannot ignore the changes in Erika's prices during the preceding calendar year and base its determination solely upon Erika's...

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4 cases
  • United States v. Erika, Inc
    • United States
    • U.S. Supreme Court
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