Temple University Commonwealth System v. Brown, CIVIL ACTION NO. 00-CV-1063 (E.D. Pa. 2/__/2001)
| Decision Date | 01 February 2001 |
| Docket Number | CIVIL ACTION NO. 00-CV-1063. |
| Parties | TEMPLE UNIVERSITY OF THE COMMONWEALTH SYSTEM OF HIGHER EDUCATION on behalf of its TEMPLE UNIVERSITY CLINICAL FACILITY PRACTICE PLANS Plaintiff, v. JUNE GIBBS BROWN, Inspector General, Department of Health and Human Services, and DONNA E. SHALALA, Secretary of the Department of Health and Human Services, Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
Presently before the court is defendants' motion to dismiss plaintiff's verified complaint (Doc. No. 5) pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) for lack of subject matter jurisdiction and for failure to state a claim upon which relief can be granted. The verified complaint (Doc. No. 1) was brought under the Administrative Procedure Act, 5 U.S.C. § 701 et seq. (1988), the Declaratory Judgment Act, 28 U.S.C. § 2201, 2202 (1988) and the Due Process Clause of the Fifth Amendment against June Gibbs Brown, Inspector General, United States Department of Health and Human Services ("HHS"), and against Donne E. Shalala, Secretary, HHS. The complaint seeks declaratory and injunctive relief arising from a Physicians at Teaching Hospitals ("PATH") audit commenced at Temple by defendants. Specifically, plaintiff alleges that pursuant to directives promulgated by HHS's General Counsel and implemented by the IG, it does not qualify for, and should thereby be excused from, any PATH audit.
Also before the court is plaintiff's motion to consolidate this action with miscellaneous case number 00-75 and for a preliminary injunction, and defendants' responses thereto (Doc. Nos. 6, 8, 15, 16, 17).
Title XVII of the Social Security Act, commonly referred to as the Medicare Act, establishes a federally funded subsidized program that reimburses for medical services provided to qualified elderly and disabled persons. See 42 U.S.C. § 1395 et seq. The Medicare program consists of two parts. Medicare Part A covers inpatient hospital services. See 42 U.S.C. § 1395c-1395i-2.1 Medicare Part B covers supplemental insurance benefits for other healthcare costs, including physicians' services. See 42 U.S.C. § 1395j-1395w. Physicians participating under Part B submit bills to Medicare carriers, which process claims on behalf of the Secretary of HHS. See 42 U.S.C. § 1395u(a)(1).
Over the past few decades, HHS and Medicare carriers have issued statements about Medicare Part B reimbursement standards. The instant dispute concerns the requirements that authorize reimbursement for "attending physician services rendered to patients in a teaching setting." 20 C.F.R. § 405.521(a) (subsequently recodified as 42 C.F.R. § 405.521). Under the Medicare statute, a teaching physician who involved interns or residents in the treatment of his patients may not bill his work as a Part B physician's service unless "the physician render[ed] sufficient personal and identifiable physician's services to the patient to exercise full, personal control over the management of the portion of the case for which the payment is sought." 42 U.S.C. § 1395u(b)(7)(A)(i)(I). In 1992, regulations went into effect which provided that a teaching physician could not bill under Part B for services actually rendered by an intern or resident unless the teaching physician was the patient's "attending physician" and he "furnishe[d] personal and identifiable direction to interns and residents who [were] participating in the care of the patient." 42 C.F.R. § 405.521(b)(1) (1992). Moreover, the HHS Inspector General has interpreted these regulations to require a teaching physician's personal presence before he may bill under Part B. See Physicians at Teaching Hospitals (PATH) Audits: Hearing Before Subcommittee on Labor, Health and Human Services, Education and Related Agencies of Senate Committee on Appropriations, S. Hrg. Rep. 105-396, 105th Cong., 1st Sess. (1997) ("Hearing") (testimony of Michael Mangano, Principal Deputy Inspector General).
In 1996, the HHS Office of Inspector General commenced the PATH audit initiative to "ensure that Medicare pays only once for the same medically necessary service, and that payment fairly reflects the level of service actually provided." Hearing, at 2. One focus of the PATH initiative was on payment to teaching physicians for services that may have actually been performed by residents or interns. PATH audits could proceed on either of two tracks. A teaching hospital could elect a less onerous PATH II audit track whereby it "would hire an auditing firm to perform the initial audit, with the concurrence of OIG, and pay for all audit expenses. . . ." Compl. at ¶ 21. Alternatively, the hospital would undergo a PATH I audit conducted on site solely by OIG auditors. See generally Compl. at ¶ 45.
After receiving complaints about the propriety of the PATH audits, however, the General Counsel of HHS, Harriet Rabb, addressed the initiative in a letter to the presidents of the Association of American Medical Colleges and the American Medical Association dated July 11, 1997. See Compl. at ¶¶ 15-16 and Ex. P. In this letter, counsel reasserted HHS's physical presence standard, recognized that the standards for paying teaching physicians under Part B had not been clearly or consistently articulated, and set forth guidelines under which subsequent PATH audits would be conducted. See id. At issue in the instant case is the third guideline which counsel explained as follows:
Third, the hospital approached by OIG will have the opportunity to show, as a matter of fact, that it or the teaching physicians at the institution received guidance from the carrier which the hospital views as contradictory to the [physical presence] standard referenced above. Until that opportunity has been provided and any submission reviewed, no additional information will be requested by OIG from the hospital nor will a PATH audit be conducted.
The decision whether clear guidance was given by carriers to teaching hospitals and physicians will be made by OIG. That determination is, necessarily, a fact bound one and will have to be made particularly and in each instance.
See id.
When the IG initiated a PATH audit at Temple, the hospital elected to proceed under the PATH II program. At that time, Temple made an initial proffer to IG representatives that it believed it had received conflicting guidance from its Medicare carrier, Xact. See Compl. at ¶ 28. Specifically, Temple conceded that Xact's written 1983 guidelines required attending physicians to be present in order to bill under Part B and specified that counter-signatures of residents' notes were insufficient documentation unless those notes otherwise indicated that the attending physician was present. Temple argued, however, that despite these guidelines, Xact issued a 1995 audit report of Temple's Medicare billing practices that permitted counter-signatures of teaching physicians to suffice as documentation of physical presence. See Compl. at ¶¶ 24-33. Accordingly, Temple asserted that, under HHS guidelines, it should be exempt from any PATH audit. Inspector General representatives concluded, however, that Xact had a physical presence policy and that its 1995 Temple audit report was a "limited review for the limited purpose of reviewing a specific procedure" and "did not address nor pertain to issues associated with teaching physicians and made no representations or findings on the acceptability of countersignatures to support a physician service billable under Medicare Part B." Compl. Ex. I. Thereafter, Temple continued to contest this conclusion and to request a meeting with senior IG and HHS officials. Inspector General representatives repeatedly reaffirmed the initial conclusion that Temple had not received any conflicting guidance and instead interpreted Temple's numerous communications challenging the IG's factual determination as demonstrating Temple's lack of commitment to conducting a PATH II self-audit and as "deliberately creat[ing] an obstructive environment that is incompatible with the PATH II cooperative framework." Compl. Ex. P. Consequently, the IG determined that the Temple audit would proceed under PATH I. See id.
On January 11, 2000, the IG of HHS issued a written request to Temple for production of Medicare-related documents in connection with its PATH I audit. See Pet. for Summ. Enforcement of an Administrative Subpoena (Doc. No. 1), United States v. Temple Univ. of the Commonwealth Sys. of Higher Educ. ex rel. Temple Univ. Clinical Faculty Practice Plans Temple Univ. Sch. of Med., Misc. Case No. 00-75 (E.D.Pa.), at ¶ 6. On February 16, 2000, after Temple failed to respond to this document request, the IG served a subpoena duces tecum on the Custodian of Records for Temple. See id. Temple filed the instant verified complaint on February 29, 2000. On April 28, 2000, the United States Attorney, on behalf of the IG of HHS, initiated miscellaneous case number 00-75 by filing a Petition for Summary Enforcement of an Administrative Subpoena. Ripe for disposition today are defendants' motion to dismiss Temple's verified complaint and Temple's motion to consolidate this action with miscellaneous case number 00-75 and for a preliminary injunction.
Once a defendant has raised a jurisdictional defense, the burden shifts to the plaintiff to prove that the relevant jurisdictional requirements are met. See Mellon Bank (East) PSFS v. Farino, 960 F.2d 1217, 1223 (3d Cir. 1992); Gehling v. St. George's Sch. of Medicine, Ltd., 773 F.2d 539, 542 (3d Cir. 1985). A motion to dismiss under Rule 12(b)(1) may present either a facial or a factual challenge to subject matter jurisdiction. See Mortensen v. First Federal Savings and Loan Ass'n, 549 F.2d 884, 891 (3d Cir. 1977). A facial challenge contests the existence of subject matter jurisdiction on the face of a...
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