Mercy Gen. Hosp. v. Becerra
Decision Date | 17 November 2022 |
Docket Number | Civil Action 21-1397 (RBW) |
Parties | MERCY GENERAL HOSPITAL, et al., Plaintiffs, v. XAVIER BECERRA, in his official capacity as Secretary of the Department of Health and Human Services, Defendant. |
Court | U.S. District Court — District of Columbia |
The plaintiffs, seventy-five acute care hospitals located in California, bring this civil action against the defendant Xavier Becerra, in his official capacity as the Secretary (the “Secretary”) of the United States Department of Health and Human Services (the “Department”) challenging (1) the Secretary's Provider Reimbursement Review Board's April 15, 2021 Denial of Request for Expedited Judicial Review pursuant to Title XVIII of the Social Security Act, 42 U.S.C. § 1395oo(f)(1), see First Amended Complaint (“Am. Compl.”) ¶¶ 1-3, 166-83, ECF No. 7, and (2) the lawfulness of regulatory rule 42 C.F.R. § 413.89(e)(2)(iii) (the “2020 final rule”), see id. ¶¶ 190-203 pursuant to the Administrative Procedure Act, 5 U.S.C. § 706(2)(A), see id. ¶¶ 185, 205. Currently pending before the Court is the Defendant's Motion to Dismiss (“Def.'s Mot.” or the “Secretary's motion to dismiss”), ECF No. 25. Upon careful consideration of the parties' submissions,[1] the Court concludes for the following reasons that it must grant the Secretary's motion to dismiss.
The Court previously described much of the background relevant to this case in an opinion resolving the plaintiffs' initial claim seeking judicial review of a decision by the Secretary in a prior case, see Mercy Gen. Hosp. v. Azar, 344 F.Supp.3d 321, 326-33 (D.D.C. 2018) (“Mercy I”), and in an opinion resolving a subsequent motion that sought reconsideration of the Court's prior ruling, see Mercy Gen. Hosp. v. Azar, 410 F.Supp.3d 63, 68-70 (D.D.C. 2019) (“Mercy II”), and therefore will not reiterate that information again here. The Court will, however, briefly discuss the statutory, regulatory, and factual background of this case as related to the issues the Court must now consider in resolving the Secretary's motion to dismiss.
The Medicare program, established in 1965 as Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395-1395lll (2012) (the “Medicare Act”), “is a federally funded medical insurance program for the elderly and disabled,” Fischer v. United States, 529 U.S. 667, 671 (2000) (internal citation omitted). Part A of the Medicare Act provides insurance coverage to eligible beneficiaries for the cost of inpatient hospital care, home health care, and hospice services, see 42 U.S.C. § 1395c, and Part B provides supplemental coverage for outpatient hospital care and other types of care not covered by Part A, see id. § 1395k. As the Court previously explained, see Mercy I, 344 F.Supp.3d at 328, if Medicare patients fail to pay the deductible and coinsurance payments that they owe to providers, the providers may seek reimbursement from the Centers for Medicare & Medicaid Services (“CMS”) for these unpaid amounts, which are known as “bad debts,” see 42 C.F.R. § 413.89(e). CMS administers the Medicare program on behalf of the Secretary, see Ark. Dep't of Health & Hum. Servs. v. Ahlborn, 547 U.S. 268, 275 (2006), “through contracts with [M]edicare administrative contractors,” 42 U.S.C. §§ 1395h(a), 1395u(a), which are known as “fiscal intermediar[ies,]” 42 U.S.C. § 1395kk-1(e)(2)(B). The fiscal intermediaries determine the amount of reimbursement for bad debts providers will receive. See 42 U.S.C. § 1395kk-1(a)(4).
A provider who “is dissatisfied with a final determination of . . . its fiscal intermediary[,]” 42 U.S.C. § 1395oo(a)(1)(A)(i), “may obtain a hearing . . . by [the] Provider Reimbursement Review Board [(the “Board”)][,]” id. § 1395oo(a). That provider “may file a request for a determination by the Board of its authority to decide [a] question of law or regulations relevant to the matters in controversy[.]” Id. § 1395oo(f)(1). The Board “shall render such determination in writing within thirty days” and “the determination shall be considered a final decision and not subject to review by the Secretary.” Id. If “the Board determines . . . that it is without authority to decide the question,” the provider may “obtain judicial review of any action of the fiscal intermediary which involves a question of law or regulations relevant to the matters in controversy[.]” Id. If the Board fails to render a determination as to whether it has authority to decide the question presented within thirty days, “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. Moreover, providers “shall have the right to obtain judicial review of any final decision of the Board[.]” Id.
Id. § 405.1842(f)(1). However, the Board must deny a request for expedited judicial review if any of the following apply:
The Department has also clarified that a “Board decision is final” only when it is “one of the Board decisions specified in § 405.1875(a)(2)(i) through (a)(2)(iii)” or is “deemed to be final by the [CMS] Administrator under § 405.1875(a)(2)(iv)[,]” and it is “not reversed, affirmed, modified, or remanded by the [CMS] Administrator[.]” Id. § 405.1877(a)(3). The Board decisions specified in 42 C.F.R. § 405.1875(a)(2) are:
42 C.F.R. § 405.1875(a)(2). Any Board decision that is final is “subject to judicial review under [42 U.S.C. § 1395oo(f).]” Id. § 405.1877(a)(3).
In September 2020, the Secretary issued new regulations governing Medicare bad debts, which apply retroactively. See 42 C.F.R. § 413.89. To receive reimbursement under these new regulations for a Medicare bad debt associated with indigent dual eligible Medicare beneficiaries,[4] a provider “[m]ust submit a bill to its Medicaid/Title XIX agency” and “[m]ust submit the Medicaid remittance advice received from the State to its Medicare contractor.” Id. § 413.89(e)(2)(iii). However, a provider may submit alternative documentation when “through no fault of the provider, a provider does not receive a Medicaid remittance advice because the State does not permit a Medicare provider's Medicaid enrollment for the purposes of processing a beneficiary's claim, or because the State does not generate a Medicaid remittance advice[.]” Id.
The plaintiffs are acute care hospitals located in California that provide services to patients entitled to benefits under both the Medicare and Medicaid programs. See Am. Compl. ¶¶ 4-81. The plaintiffs previously brought suit, “involving] largely the same [seventy-five] [p]laintiff providers[,]” Def.'s Mem. at 6, in this Court seeking review of the Secretary's decision denying their claims for reimbursement for the Medicare bad debts of dual eligible patients incurred between the years 1995 and 2004. See Mercy I, 344 F.Supp.3d at 331. Specifically, the plaintiffs challenged the Secretary's “must-bill” policy that required providers to bill the State and seek remittance advice before they could receive any reimbursement through Medicare.[5] See id.
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