Saint Vincent Indianapolis Hosp. v. Sebelius
| Decision Date | 29 September 2015 |
| Docket Number | Case No 1:13–cv–01768–RDM |
| Citation | 134 F.Supp.3d 238 |
| Parties | Saint Vincent Indianapolis Hospital, Plaintiff, v. Kathleen Sebelius, Secretary, U.S. Department of Health and Human Services, Defendant. |
| Court | U.S. District Court — District of Columbia |
Angela M. Smith, Hall, Render, Killian, Heath & Lyman, P.C., Indianapolis, IN, Roy Ira Niedermayer, Paley Rothman Goldstein Rosenberg Eig & Cooper, Chtd., Bethesda, MD, for Plaintiff.
Joshua M. Kolsky, Peter C. Pfaffenroth, U.S. Attorney's Office, Debra Michelle Laboschin, U.S. Department of Health & Human Services, Washington, DC, for Defendant.
Plaintiff Saint Vincent Hospital and Health Care Center, Inc., ("plaintiff") filed suit against Defendant Kathleen Sebelius, Secretary of the Department of Health and Human Services ("defendant"), alleging agency error in limiting the scope of administrative review to issues identified by providers in cost reports under the Medicare program established by Title XVIII of the Social Security Act, as amended. Compl., ECF No. 1. Defendant filed an answer, generally denying all factual allegations and referring the Court to statute and relevant case law for interpretations of legal points raised in the complaint.
Answer, ECF No. 11. Plaintiff then filed this motion for Summary Judgment. Mot. Summ. J., ECF No. 17. Defendant filed a cross motion for summary judgment and memorandum in support of summary judgment and in opposition to plaintiff's motion for summary judgment. Cross–Mot. Summ. J., ECF No. 18, Mem. Supp. Mot. Summ. J Opp'n Pl.'s Mot. Summ. J., ECF No. 18–1. Plaintiff then filed a reply in opposition. Reply Opp'n Mot. Summ. J., ECF No. 20. Lastly, defendant filed a reply. Reply Opp'n. Mot. Summ. J. Combined Opp'n. Pl.'s Mot. Summ. J., ECF No. 23.
Plaintiff filed suit appealing the decisions of the Provider Reimbursement Review Board ("PRRB") under 42 U.S.C. § 1395oo. Compl., ECF No. 1. Specifically, plaintiff alleges that the PRRB has improperly limited the scope of administrative review to several issues that plaintiff raised with regard to its fiscal year 1999 Medicare reimbursement. Id. Throughout the administrative appeal process, plaintiff raised six issues1 , the procedural history of which is outlined in the complaint. Id. Ultimately, the PRRB ruled that plaintiff had not adequately established the dissatisfaction element required under § 1395oo (a) for the first three issues. Id. The PRRB further found that the second three issues were not timely added to the appeal and therefore were not preserved for stand-alone appeal. Id.
Plaintiff requests the Court find that plaintiff met the dissatisfaction requirement under § 1395oo (a), that the amount in controversy is $10,000 or more, that plaintiff timely filed a request for hearing before the PRRB, that plaintiff is entitled to a hearing before the PRRB with respect to the fiscal year 1999 program reimbursement, and that the PRRB has jurisdiction over all issues raised by plaintiff. Id.
Defendant generally and specifically denies all conclusions of law and most statements of fact advanced by plaintiff in its answer. Answer, ECF No. 11. Defendant further asserts that the Court's subject matter jurisdiction is limited to review of any final agency actions within the scope of § 1395oo (f)(1) and that the complaint fails to state a claim upon which relief can be granted. Answer, ECF No. 11 at 1.
Plaintiff then filed its motion for summary judgment in which, pursuant to Fed. R. Civ. P. 56, plaintiff alleges there is no genuine issue of material fact and that plaintiff is therefore entitled to judgment as a matter of law on each of its claims. Mot. Summ. J., ECF No. 17 at 1. Defendant files a cross-motion for summary judgment and her memorandum in support of her cross-motion and in opposition of plaintiff's motion. Cross–Mot. Summ. J., ECF No 18, and Mem. Supp. Mot. Summ. J. Opp'n. Pl.'s Mot. Summ. J., ECF No 18–1. The remaining filings are outlined above. The Court now turns to analyze the matters presented in both parties' motions.
The crux of the matter before the Court surrounds defendant's interpretation of the dissatisfaction provision found in § 1395oo (a). The Court's determination on this point informs and guides the Court in ruling on each party's (cross-)motion for summary judgment. This Court's review of the case at bar is guided by the Administrative Procedures Act ("APA"). 5 U.S.C. §§ 701 –706. The Court notes that the APA provides a decidedly narrow standard of review. Mem. Supp. Cross–Mot. Summ. J., ECF No. 18–1 at 12 (citing Southern Co. Servs., Inc. v. FCC, 313 F.3d 574, 580 (D.C.Cir.2002), Hillcrest Riverside, Inc. v. Sebelius, 680 F.Supp.2d 30, 35 (D.D.C.2010). The Court's analysis under APA provisions requires the two tier analysis outlined in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., to determine whether defendant's interpretation warrants deference. 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984). The Court applies the D.C. Circuit's rationale that, "to the extent HHS has based its decision on the language of the Medicare Act itself, we owe deference under Chevron U.S.A. Inc. v. Natural Resources Defense Council, 467 U.S. 837, 843–845, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984)." Marymount Hosp., Inc. v. Shalala, 19 F.3d 658, 661 (D.C.Cir.1994).
i. A Medicare Provider's Right to Administrative Hearing
Plaintiff primarily relies upon a provider's right to an administrative hearing under § 1395oo. Mem. Supp. Mot. Summ. J., ECF No. 17–1 at 4–8. Plaintiff asserts that Congress "has clearly established conditions under which a Medicare Provider is entitled to challenge an FI/MAC2 's determination of reimbursement." Id. at 4. Plaintiff identifies three criteria to obtain a hearing before the PRRB under § 1395oo (a) ; dissatisfaction with the total program reimbursement to the provider, the amount in controversy being $10,000 or more, and the provider filing for a hearing within 180 days after notice. Id. As the Court has identified, the crux of this matter lay in the first criteria related to the dissatisfaction requirement found in § 1395oo (a), although the third criteria is implicated as well.
ii. Dissatisfaction Requirement
Section 1395oo (a) sets forth requirements to be heard before a PRRB. The requirements require that, in part:
Plaintiff contends that the only issue in applying this dissatisfaction requirement is whether plaintiff "must have first claimed each cost in issue on its cost report for the fiscal year in controversy." Mem. Supp. Mot. Summ. J., ECF No 17–1 at 4–5. The leading case cited by both parties appears to be Bethesda Hosp. Ass'n v. Bowen, 485 U.S. 399, 108 S.Ct. 1255, 99 L.Ed.2d 460 (1988). From the outset, the Court notes one significant factual distinction that informs the present analysis. Specifically, the provider in Bethesda self-disallowed3 costs that were not allowed by the current regulations, then later challenged the validity of those regulations. Id. Conversely, plaintiff here has no such claim. Plaintiff relies upon this Court's rationale in applying the Bethesda analysis where the Court "rejected the Secretary's position that the Board's4 jurisdiction was limited to review of matters specifically claimed in a provider's relevant cost reports." UMDNJ–University Hosp. v. Leavitt, 539 F.Supp.2d 70 (D.D.C.2008) (Sullivan, J). In UMDNJ, as plaintiff notes, Judge Sullivan reviewed a circuit split on whether Bethesda mandates an exhaustion requirement before the FI/MAC prior to a hearing before the PRRB. Mem. Supp. Mot. Summ. J., ECFNo 17–1 at 6(citing UMDNJ–University Hosp. v. Leavitt, 539 F.Supp.2d 70, 75–76 (D.D.C.2008) (citations omitted)). Plaintiff then argues that Judge Sullivan, consistent with the First and Ninth Circuit, rejected the proposition advanced by defendant here, and the Seventh Circuit5 , and held that the provider need not express dissatisfaction with each individual claim to preserve the matters for appeal to and hearing before the PRRB. Mem. Supp. Mot. Summ. J., ECF No. 17–1 at 6–7 (). The Court, however, finds that whether plaintiff claimed each individual cost is not the dispositive determination. Rather, the question before the Court is whether plaintiff's claims were timely in expressing dissatisfaction.
Conversely, defendant argues that plaintiff failed to comply with the dissatisfaction requirement, making plaintiff's appeal wholly untimely, and therefore has no further cause of action. Defendant notes that PRRB determined that it (the PRRB) lacked jurisdiction over "the only reimbursement matters that St. Vincent timely appealed from its FY 1999 cost report ..." Mem. Supp. Cross–Mot. Summ. J., ECF No. 18–1 at 15. This refers to the three initial issues raised for appeal by plaintiff before the PRRB and discussed above. The PRRB determined that plaintiff "failed to meet the jurisdiction prerequisite of being ‘dissatisfied’ with the amount of Medicare payment because the ‘errors and omissions' alleged by the provider in its appeal stemmed from its own ‘negligence in understanding the...
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