Girling Health Care, Inc. v. Shalala

• Decision Date: 13 June 1996
• Docket Number: No. 95-50794,95-50794
• Parties: , Medicare & Medicaid Guide P 44,422 GIRLING HEALTH CARE, INC., Plaintiff-Appellant, v. Donna E. SHALALA, Secretary, Department of Health and Human Services, in her Representative Capacity; United States Department of Health and Human Services, Defendants-Appellees.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 211

85 F.3d 211

51 Soc.Sec.Rep.Ser. 3, Medicare & Medicaid Guide P 44,422

GIRLING HEALTH CARE, INC., Plaintiff-Appellant, v. Donna E. SHALALA, Secretary, Department of Health and Human Services, in her Representative Capacity; United States Department of Health and Human Services, Defendants-Appellees.

No. 95-50794

Summary Calendar.

United States Court of Appeals,

Fifth Circuit.

June 13, 1996.

William F. Kemp, Austin, TX, George H. David, Newport Beach, CA, for plaintiff-appellant.

Rodney Alan Johnson, Dallas, TX, Ernest Carlos Garcia, Office of the United States Attorney, Austin, TX, for defendants-appellees.

Appeal from the United States District Court for the Western District of Texas.

Before GARWOOD, WIENER and EMILIO M. GARZA, Circuit Judges.

PER CURIAM:

In this appeal from the district court's affirmance of the denial by Defendant-Appellee Donna E. Shalala, Secretary, Department of Health and Human Services (hereafter, Secretary), of reimbursement of Medicare costs claimed by Plaintiff-Appellant Girling Health Care, Inc., Girling challenges the propriety of the district court's use of the summary judgment mechanism when reviewing a decision of an administrative agency. Girling also asserts the absence of substantial evidence to support the Secretary's decision. As this appeal involves a "complex and highly technical regulatory program," ¹ we write somewhat more extensively here than we might otherwise have when affirming a district court's summary judgment disposition of such an agency case. For the reasons hereinafter set forth, we affirm the district court's summary judgment affirming the Secretary's decision and dismissing Girling's action.

I FACTS AND PROCEEDINGS

A. Background

This case arises under the Medicare Act. ² Medicare home health care agencies, ³ such as Girling, are reimbursed by the Medicare program through private organizations acting as The fiscal intermediary determines the provider's reasonable cost based on an annual cost report submitted by the provider. ⁶ The provider is notified of the intermediary's determination in a written notice known as a "notice of program reimbursement" ("NPR").

"fiscal intermediaries" ⁴ under contract with the Secretary. Under the Medicare Act, the Secretary prescribes methods for determining a provider's "reasonable cost" of providing services to Medicare beneficiaries. ⁵

A provider that is dissatisfied with an intermediary's determination is entitled to a hearing before the Provider Reimbursement Review Board ("PRRB") if (1) the amount in controversy is $10,000 or more, and (2) the provider makes a request within 180 days following the date on which the NPR was mailed to the provider. ⁷ The PRRB's decision may be reversed, affirmed, or modified by the Secretary. ⁸ The district court has jurisdiction to review a final reimbursement decision by the PRRB or the Secretary under the Administrative Procedure Act. ⁹ The Administrator's reversal of the PRRB's decision in this case constitutes the final decision of the Secretary. ¹⁰

B. Operable Facts

Girling's Memphis, Tennessee, sub-unit submitted its cost report for the 1986 fiscal year to Prudential, its fiscal intermediary, on November 6, 1986. On November 5, 1987, Prudential issued its NPR finding that Girling owed the Medicare program $31,591. Girling appealed the decision to the PRRB, contesting Prudential's failure to include a number of reimbursable costs and charges.

On April 11, 1988, Prudential informed Girling that it had "ordered" a detailed listing of paid claims (a PS & R ¹¹), which would be forwarded to Girling so that it could identify any discrepancies. On July 11, 1988, Prudential wrote to Girling and explained that on April 29, 1988, Prudential had sent the PS & R of paid claims for fiscal years 1986 and 1987 to Girling but that Prudential had never received Girling's analysis of that report. Prudential requested that Girling submit its reconciliation by July 29, 1988, so that Prudential could analyze the disputed claims prior to terminating its role as intermediary on January 1, 1989.

The record contains a letter dated July 28, 1988, indicating Girling's intent to forward its reconciliation to Prudential; however, the address on the forwarding letter does not include a city or state. Nothing in the record indicates that Girling's reconciliation was ever received by Prudential. On August 9, 1988, Prudential again wrote to Girling and referred to Girling's being "in the process of identifying the discrepancies in your records and ours." Prudential never issued a report concerning Girling's reconciliation; neither did Prudential furnish its successor, Blue Cross of Iowa, a copy of the PS & R or other supporting information concerning the reimbursement dispute with Girling.

The PRRB held a hearing on November 30, 1993. On May 24, 1994, the PRRB issued a decision reversing Prudential's disallowance of the reimbursement costs. The PRRB found that Girling had submitted "sufficient evidence" to show that the PS & R was flawed and that Girling should not be prejudiced by Prudential's failure to transfer the documentation to Blue Cross of Iowa.

The PRRB also determined that Girling had timely submitted reconciliation data to Prudential.

The Administrator of the HCFA reviewed and reversed the decision of the PRRB, finding that Girling had not presented sufficient evidence to show that the cost amounts from the PS & R used by Prudential were inaccurate. The Administrator held that Girling's "reconstructed" data, which was retrieved with only limited success from Girling's archived computer billing records, failed to meet the requirements of 42 C.F.R. § 413.20. The Administrator's decision was the final decision of the Secretary. ¹²

Girling filed the instant suit in the district court, seeking reversal of the Secretary's decision. Girling contends that it had submitted adequate data for reimbursement, but that the Secretary had "ignored evidence before the PRRB." The Secretary and Girling each moved for summary judgment. In its motion, Girling contended that the Secretary had made an arbitrary decision to deny reimbursement, which decision was not supported by substantial evidence, and that the Secretary had conducted an overly broad review of the PRRB's decision. Concluding that the Secretary's review of the PRRB's decision was not limited and that the Secretary's decision was supported by substantial evidence, the district court granted the Secretary's motion for summary judgment, and Girling timely appealed.

II ANALYSIS

A. Summary Judgment Standard

Despite having filed its own motion for summary judgment, Girling argues to us that the summary judgment mechanism used by the district court is inconsistent with the standards for judicial review under the Administrative Procedure Act. Citing Olenhouse v. Commodity Credit Corp., ¹³ Girling argues--for the first time on appeal ¹⁴--that the district court should have reviewed Girling's summary judgment motion under the Federal Rules of Appellate Procedure and that such review would have required the district court to "examine[ ] the entire administrative record." Girling insists that the district court's failure to examine the entire record is the "only logical conclusion" that can be distilled from the district court's grant of summary judgment in favor of the Secretary.

This argument is frivolous. As more fully explained below, the district court properly focused on whether the Secretary's decision is supported by substantial evidence in the administrative record. In addition, Olenhouse is factually distinguishable and logically inapplicable. In Olenhouse, the Tenth Circuit addressed an instance in which the district court went beyond the administrative record to decide the administrative case before it, leading the appeals court to hold that summary judgment was an inappropriate mechanism for deciding administrative cases. ¹⁵ Here, the district court did not go beyond the administrative record; neither is that the basis for Girling's contention that the summary judgment standard is inappropriate. On the contrary, Girling contends that the district court did not delve deeply enough into the administrative record, not that the district court reviewed matters not considered by the Secretary which were outside of the record.

We have consistently upheld, without comment, the use of summary judgment as a mechanism for review of agency decisions. ¹⁶ Our practice is supported by the commentators.

The summary judgment procedure is particularly appropriate in cases in which the court is asked to review or enforce a decision of a federal administrative agency. The explanation for this lies in the relationship between the summary judgment standard of no genuine issue as to any material fact and the nature of judicial review of administrative decisions.... [T]he administrative agency is the fact finder. Judicial review has the function of determining whether the administrative action is consistent with the law--that and no more. ¹⁷

As Girling presents no compelling argument for changing this practice, we decline the invitation to do so.

B. The Secretary's Decision

We will not reverse the Secretary's decision unless it is arbitrary, capricious, an abuse of discretion, not in accordance with law, or unsupported by substantial evidence on the record taken as a whole. ¹⁸ Substantial evidence is " 'more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.' " ¹⁹

Girling argues that the district court's decision was not based on a "thorough" discussion of the decision by the PRRB and the subsequent reversal of that decision by the Secretary. The expertise of the PRRB and the HCFA Administrator are deemed equivalent, even when the latter reverses the former. ²⁰

Girling contends that the district court erred by not reviewing the PRRB's decision that Girling had...