St. Joseph's Hosp. of Kansas City v. Heckler

• Decision Date: 05 June 1986
• Docket Number: No. 84-2614,84-2614
• Citation: 786 F.2d 848
• Parties: , Medicare&Medicaid Gu 35,340 ST. JOSEPH'S HOSPITAL OF KANSAS CITY and Methodist Medical Center, Appellants, v. Margaret M. HECKLER, Secretary, Health and Human Services, and Paul Ganeles, Chairman, Provider Reimbursement Review Board, Appellees.
• Court: U.S. Court of Appeals — Eighth Circuit

Page 848

786 F.2d 848

13 Soc.Sec.Rep.Ser. 152, Medicare&Medicaid Gu 35,340

ST. JOSEPH'S HOSPITAL OF KANSAS CITY and Methodist Medical

Center, Appellants, v. Margaret M. HECKLER, Secretary, Health and Human Services, and Paul Ganeles, Chairman, Provider Reimbursement

Review Board, Appellees.

No. 84-2614.

United States Court of Appeals,

Eighth Circuit.

Submitted Sept. 9, 1985.

Decided March 19, 1986.

Rehearing and Rehearing En Banc Denied June 5, 1986.

Myra C. Selby, Indianapolis, Ind., for appellants.

Donald G. Kosin, Jr., Washington, D.C., for appellees.

Before HEANEY, JOHN R. GIBSON, and FAGG, Circuit Judges.

FAGG, Circuit Judge.

St. Joseph's Hospital of Kansas City and Methodist Medical Center (collectively Hospitals) appeal the dismissal of their civil action brought under the Medicare Act, 42 U.S.C. Sec. 1395 et seq. The district court dismissed the action after concluding it was without subject matter jurisdiction to address the issues presented. We agree and affirm.

The Medicare Act (Act) was adopted by Congress to ensure that a wide range of health care services are readily available to qualified elderly and disabled persons. Id. The services authorized by the Act are performed by participating health care providers, two of which are the Hospitals involved in the present action.

When a provider performs authorized health care services, it is entitled to be reimbursed for the care provided. See id. Secs. 1395x(u), 1395f. In seeking reimbursement, a provider may choose to receive payments through either a public or a private agency. Id. Sec. 1395h. If, as here, the provider selects a private agency, that agency acts as the fiscal intermediary for the Secretary of Health and Human Services (Secretary), id., and is initially responsible for reviewing any claims submitted by the provider. 42 C.F.R. Sec. 405.406.

After reviewing the claims submitted by a provider, the fiscal intermediary issues a notice of reimbursement detailing those costs that will be allowed by the intermediary. Id. Sec. 405.1803. If a provider is dissatisfied with this determination, it is entitled to request a hearing before the fiscal intermediary. Id. Sec. 405.1807.

When a hearing has been requested, the decision of the intermediary made after that hearing is, subject to revision, its final determination. Id. Secs. 405.1833, 405.1885. If a provider is satisfied with the intermediary's initial determination or for some other reason declines to request a hearing, that decision, contained in the intermediary's notice of reimbursement, also becomes its final determination. Id. Sec. 405.1807.

After the decision of the fiscal intermediary becomes final, a provider may seek further review before the Provider Review Reimbursement Board (PRRB or Board). 42 U.S.C. Sec. 1395oo. However, a provider's right to seek further review is strictly limited. Review may be obtained only if the provider first satisfies four threshold requirements: (1) the provider must file a timely cost report with the fiscal intermediary; (2) the provider must be dissatisfied with the fiscal intermediary's final determination; (3) the amount in controversy must be $10,000 or more; and (4) the appeal to the Board must be filed within 180 days of notice of the intermediary's final determination. 42 U.S.C. Sec. 1395oo(a); see also Athens Community Hospital v. Schweiker, 686 F.2d 989, 991 (D.C.Cir.1982).

In this case, the Hospitals acknowledge that they have not complied with and in fact cannot comply with one of the four requirements of section 1395oo(a). Specifically, before both the Board and this court, the Hospitals admit their request for a hearing was not filed within 180 days of the intermediary's final determination as expressly required by section 1395oo(a)(3).

Nevertheless, relying solely on a regulation promulgated by the Secretary that purports to authorize the Board to extend the 180 day time limit "for good cause shown," 42 C.F.R. Sec. 405.1841(b), the Hospitals asked the Board to waive the congressionally proscribed time limit and take jurisdiction over their admittedly untimely appeals. The PRRB refused the Hospitals' request for hearings on two independent grounds. First, the statutorily mandated requirement of a timely request was not complied with by the providers. See 42 U.S.C. Sec. 1395oo(a)(3). Second, the Hospitals had failed to demonstrate good cause for their late filing as required by the Secretary's regulation. See 42 C.F.R. Sec. 405.1841(b).

Following the Board's refusal, the Hospitals instituted this action. While never challenging the propriety of the Board's first basis for refusing their request, the Hospitals asserted that the PRRB's refusal to grant them a good cause extension under section 405.1841(b) was arbitrary and capricious and denied them due process of law.

In response, the Secretary filed a motion to dismiss the Hospitals' claims for lack of subject matter jurisdiction. See Fed.R.Civ.P. 12(b)(1). The district court granted the Secretary's motion holding that 42 U.S.C. Sec. 1395oo(f), the statutory provision asserted by the Hospitals as a basis for this court's jurisdiction, requires a "final decision" by the Board as a prerequisite to its subject matter jurisdiction. The district court further held that the Board's refusal to grant the Hospitals an extension of time in which to file an appeal was not a "final decision" for purposes of judicial review. We agree.

Title 42 U.S.C. Sec. 1395ii, which incorporates section 205(h) of the Social Security Act into the Medicare Act, makes clear that this court's jurisdiction to review claims arising under the Medicare Act exists only as expressly specified in the Act itself. Id. Secs. 1395ii, 405(h); see Heckler v. Ringer, 466 U.S. 602, 104 S.Ct. 2013, 2021-22, 80 L.Ed.2d 622 (1984); Saline Community Hospital v. Secretary of Health and Human Services, 744 F.2d 517, 519 (6th Cir.1984) (per curiam); Hadley Memorial Hospital v. Schweiker, 689 F.2d 905, 909 (10th Cir.1982); Athens, 686 F.2d at 992-93; Pacific Coast Medical Enterprises v. Harris, 633 F.2d 123, 137-38 (9th Cir.1980); Cleveland Memorial Hospital v. Califano, 444 F.Supp. 125, 127 (E.D.N.C.1978), aff'd, 594 F.2d 993 (4th Cir.1979).

Under the Medicare Act, the sole route for a provider to obtain judicial review of disputed reimbursement claims is found in section 1395oo(f)(1) of the Act. This provision states that "[p]roviders shall have the right to obtain judicial review of any final decision of the Board * * *." 42 U.S.C. Sec. 1395oo(f)(1) (emphasis added); see also Saline, 744 F.2d at 519; Hadley, 689 F.2d at 909; Pacific Coast, 633 F.2d at 138; Cleveland, 444 F.Supp. at 127. Thus, the issue before this court is whether the Board's decision not to grant the Hospitals an extension under 42 C.F.R. Sec. 405.1841(b) for the filing of their appeals is a final decision subject to judicial review under section 1395oo(f)(1).

Although the Board's decision not to hear the Hospitals' untimely appeals clearly ended the administrative process, it does not necessarily follow that the decision was a "final decision" for purposes of judicial review under section 1395oo. As the Supreme Court has aptly stated in the social security context, "[t]he requirement [of a final decision] is * * * something more than simply a codification of the judicially developed doctrine of exhaustion * * *." Weinberger v. Salfi, 422 U.S. 749, 766, 95 S.Ct. 2457, 2467, 45 L.Ed.2d 522 (1975); see also Sheehan v. Secretary of Health, Education & Welfare, 593 F.2d 323, 325 (8th Cir.1979) ("[T]he presence of a final decision is not only essential to determine when judicial intervention is proper but also to determine whether it is possible."). Consequently, if the PRRB has made a final decision, we may address the issues presented; otherwise we may not. McKeesport v. Heckler, 612 F.Supp. 279, 282 (W.D.Pa.1985). And, whether a final decision is before the court depends on the particular circumstances of the case before it.

For example, if a provider has complied with the threshold requirements of section 1395oo(a), the PRRB is then authorized to conduct a hearing on the provider's claim. After the hearing, the Board will render a decision on the merits of the controversy. Without question, that decision is a final decision subject to judicial review under section 1395oo(f). An appeal from this type of decision is not before the court in this instance.

A second type of final decision also not before this court occurs when a provider challenges the Board's determination that it has failed to satisfy the threshold requirements of section 1395oo(a). In that case, because "[t]he PRRB is empowered to decide questions relating to its own jurisdiction to grant a hearing, including issues of timeliness and amount of controversy," Highland District Hospital v. Secretary of Health and Human Services, 676 F.2d 230, 235 (6th Cir.1982); 42 C.F.R. Sec. 405.1873(a), a decision rejecting a claim for failure to fulfill a threshold requirement must be a final decision for purposes of judicial review. "Otherwise, the PRRB could effectively preclude any judicial review of its decisions simply by denying jurisdiction of those claims that it deems to be non-meritorious. Such a device would obviously thwart the salutory purposes of Section 1395oo(f)." See Saline, 744 F.2d at 520 (quoting Cleveland, 444 F.Supp. at 128); see also Athens, 686 F.2d at 993-94; Highland, 676 F.2d at 233-35.

A third distinct situation is presented in this case. The Hospitals admit they have not complied with the clear requirements of section 1395oo(a). Specifically, they have not complied with the mandatory requirement of section 1395oo(a) which unambiguously specifies that a provider "may obtain a hearing" on its claim "if * * * a request for a hearing [is filed] within 180 days * * * of the intermediary's final determination." 42 U.S.C. Sec. 1395oo(a)(3). The imperative nature of this...