Full Life Hospice, LLC v. Sebelius

Decision Date26 February 2013
Docket NumberNo. 11–6242.,11–6242.
PartiesFULL LIFE HOSPICE, LLC, Plaintiff–Appellant, v. Kathleen SEBELIUS, Secretary, United States Department of Health and Human Services, Defendant–Appellee.
CourtU.S. Court of Appeals — Tenth Circuit

OPINION TEXT STARTS HERE

Mark S. Kennedy, Kennedy, Attorneys and Counselors at Law, Dallas, TX, on the brief for Appellant.

Tom Majors, Assistant United States Attorney, with Sanford C. Coats, United States Attorney, Oklahoma City, OK, on the brief for Appellee.

Before TYMKOVICH, BALDOCK, and GORSUCH, Circuit Judges.

TYMKOVICH, Circuit Judge.

Full Life Hospice is a hospice care provider participating in the federal Medicare program. Over a number of years, it provided hospice care services to terminally ill Medicare beneficiaries and sought reimbursementfor these services from the Department of Health and Human Services (HHS). A fiscal intermediary, acting on behalf of HHS, later contested some of these reimbursements and demanded repayment of funds that it claimed were distributed in excess of a spending cap.

Full Life then unsuccessfully challenged HHS intermediary's determination through an administrative appeal, which was denied as untimely. On appeal to the district court, the court found no basis to excuse Full Life's untimely challenge. We agree with the district court that it lacked subject matter jurisdiction because of Full Life's failure to file a timely administrative appeal. Accordingly, exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM.

I. Background
A. Statutory and Regulatory Background

Medicare pays hospice care providers a predetermined amount for each day a Medicare beneficiary receives hospice care. See42 U.S.C. § 1395f(i)(1)(A). This amount is subject to a spending cap. Id. § 1395f(2). HHS has adopted a regulation, 42 C.F.R. § 418.309, to calculate the amount of this cap.

The Medicare Act allows for challenges to regulations such as 42 C.F.R. § 418.309, but it establishes a specific procedure for bringing such claims. 1 As is relevant here, this process can begin with a hospice provider's challenge to the basis for a request for repayment made by an HHS fiscal intermediary. HHS uses fiscal intermediaries to calculate, in accord with the relevant statutes and regulations, the spending cap for a particular hospice provider within an accounting year. See42 U.S.C. §§ 1395h, 1395kk–1.

If the provider “is dissatisfied with a final determination” made by a fiscal intermediary and the amount in controversy exceeds $10,000, the provider can request a hearing on the matter with the Provider Reimbursement Review Board (the Board). Id.§ 1395 oo(a)(1)(A)(i), (a)(2). A provider is required to file a request for such a hearing with the Board “within 180 days after notice of the intermediary's final determination.” Id.§ 1395 oo(a)(3). Under limited circumstances, the Board can extend the 180–day time period within which to challenge a fiscal intermediary's final determination upon a “good cause showing by the provider.” 42 C.F.R. § 405.1836(a).2

The Medicare Act allows for a slightly different process for direct challenges to HHS regulations. If the provider contesting a reimbursement amount has filed a request for a hearing in accord with § 1395 oo(a) (mentioned above), the provider “may file a request for a determination by the Board of its authority to decide the question of law or regulations relevant to the matters in controversy.” 42 U.S.C. § 1395 oo(f)(1). The parties both refer to this type of request as expedited judicial review (EJR).

After a validly filed request for EJR, the Board “shall render such determination [of its authority to rule on a matter] in writing within thirty days after the Board receives the request and such accompanying documents and materials, and the determination shall be considered a final decision and not subject to review by the Secretary.” Id. § 1395 oo(f)(1). If the Board fails to render such a decision within the thirty-day period, “the provider may bring a civil action [in United States District Court] (within sixty days of the end of such period) with respect to the matter in controversy contained in such request for a hearing.” Id.

Finally, outside of the context of EJR, the Medicare Act requires that [p]roviders shall have the right to obtain judicial review of any final decision of the Board, or of any reversal, affirmance, or modification by the Secretary, by a civil action commenced within 60 days of the date on which notice of any final decision by the Board or of any reversal, affirmance, or modification by the Secretary is received.” 42 U.S.C. § 1395 oo(f)(1). The statute further mandates that [a] decision of the Board shall be final unless the Secretary, on [her] own motion, and within 60 days after the provider of services is notified of the Board's decision, reverses, affirms, or modifies the Board's decision.” Id.

With the statutory and regulatory framework in mind, we turn to Full Life's challenge to HHS's decision.

B. Procedural Background

A fiscal intermediary, acting on behalf of HHS, issued three notices challenging the amount of Full Life's reimbursements for hospice services on September 25, 2008, May 27, 2009, and March 10, 2010. In these notices, the fiscal intermediary informed Full Life that it had received reimbursements for hospice care in excess of the amount permitted by 42 C.F.R. § 418.309. Full Life started to repay the excess amount at some point shortly after receiving these notices.

Then, on November 24, 2010, Full Life filed an administrative challenge to the notices. All three of the challenges came more than 180 days after Full Life had received the notices from the fiscal intermediary. As explained in its complaint, Full Life filed the appeals only after learning that other hospice providers had successfully challenged the validity of § 418.309.

On January 7, 2011, although the Board had not rendered any decision on Full Life's appeals, Full Life filed suit in federal court raising a claim that § 418.309 was contrary to its authorizing statute. Several days later, on January 14, 2011, the Board issued three decisions on Full Life's appeals, finding that each appeal was not timely filed and that Full Life had not shown “good cause” to excuse the late filing. The Board therefore concluded that it did not have jurisdiction over Full Life's appeals.

Meanwhile, in the district court, Full Life sought to amend its complaint. In the original complaint, Full Life invoked 42 U.S.C. § 1395 oo(f)(1) as one basis for subject matter jurisdiction. In its proposedamended complaint, Full Life alleged that the district court also had subject matter jurisdiction under a number of other statutes, including (as is relevant here) the federal mandamus statute, 28 U.S.C. § 1361.

HHS then moved to dismiss Full Life's amended complaint. The district court granted HHS's motion to dismiss, reasoning that because Full Life did not adhere to the statutory scheme outlined in 42 U.S.C. § 1395 oo(f)(1), it could not rely on the Medicare Act as a basis for subject matter jurisdiction. The district court also determined that none of the other bases for subject matter jurisdiction noted in the amended complaint in fact applied.

Full Life then moved for leave to amend its complaint to include attacks on the Board's three findings that Full Life had not demonstrated good cause in filing late appeals. The district court denied this motion on the ground that it was futile.

II. Analysis

Full Life challenges both the district court's grant of the motion to dismiss and its denial of the motion to amend. Full Life argues the court erred in failing to find jurisdiction either under § 1395 oo(f)(1) of the Medicare Act or under the federal mandamus statute, 28 U.S.C. § 1361. Full Life also challenges the district court's denial of the motion to amend the complaint to expand its challenges to HHS's good cause determinations.

We address each of these claims in turn.

A. Subject Matter Jurisdiction

Full Life first challenges the district court's finding that it lacked subject matter jurisdiction under 42 U.S.C. § 1395 oo(f)(1). “Our review of the district court's dismissal for lack of subject matter jurisdiction is de novo.” Marcus v. Kansas Dep't of Revenue, 170 F.3d 1305, 1309 (10th Cir.1999) (citation omitted). Further, [b]ecause the jurisdiction of federal courts is limited, there is a presumption against our jurisdiction, and the party invoking federal jurisdiction bears the burden of proof.... A court lacking jurisdiction cannot render judgment but must dismiss the cause at any stage of the proceedings in which it becomes apparent that jurisdiction is lacking.” Id.

As we described above, § 1395 oo(f)(1) limits the means by which we review challenges to the determinations made by HHS fiscal intermediaries. Most importantly, the statute requires that a provider must first obtain a hearing with the Board. To obtain such a hearing, the provider must satisfy three prerequisites: (1) the provider must be “dissatisfied” with a decision of a fiscal intermediary; (2) the amount in controversy must exceed $10,000; and (3) the provider must request a hearing “within 180 days after notice of the intermediary's final determination.” 42 U.S.C. § 1395 oo(a).

Only after these preconditions are met does § 1395 oo(f)(1) require the Board to render [a] determination in writing within thirty days after the Board receives the [EJR] request.” Finally, if the Board fails to meet its statutory obligations, “the provider may bring a civil action (within sixty days of the end of such period) with respect to the matter in controversy contained in such request for a hearing.” Id.

Full Life concedes that it did not file its requests for a hearing within the 180–day period mandated by the statute. Thus, Full Life cannot meet one of the statutory preconditions for obtaining judicial review, and the district court rightly determined that § 1395 oo(f)(1) could not...

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