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MEMORIAL HOSP. v. SULLIVAN

October 10, 1991

MEMORIAL HOSPITAL, Plaintiff,
v.
LOUIS W. SULLIVAN, M.D., Defendant


Charles R. Richey, United States District Judge.


The opinion of the court was delivered by: RICHEY

Plaintiff Memorial Hospital, a participant in the Medicare program, 42 U.S.C. § 1395 et seq., seeks reimbursement for certain costs of labor and delivery room services to which it is entitled as a result of recent decisions in this Circuit. *fn1" Plaintiff contends that the Provider Reimbursement Review Board ("PRRB") wrongfully refused to consider Plaintiff's appeal of the fiscal intermediary's refusal to reopen cost reports for the 1983-85 years. In its Motion to Dismiss, or in the Alternative, Motion for Summary Judgment, Defendant argues that the applicable regulations preclude the PRRB from entertaining any such appeal. See 42 C.F.R. § 405.1885(c) (1991). Upon considering the Defendant's Motion, the Plaintiff's response thereto, the applicable law and the record herein, the Court grants the Defendant's Motion with respect to the PRRB's lack of jurisdiction over the Plaintiff's appeal and dismisses Counts I and II of the Complaint. However, for the reasons discussed herein, the Motion to Dismiss with respect to this Court's jurisdiction over the fiscal intermediary, as alleged in Count III, shall be held in abeyance pending production of the full administrative record before the fiscal intermediary and further briefing by the parties.

 BACKGROUND

 In its cost reports for the 1983, 1984 and 1985 fiscal years, Plaintiff Memorial Hospital did not seek reimbursement from its fiscal intermediary, Blue Cross and Blue Shield of Kentucky, for certain costs of labor and delivery room services. However, in light of the new policy on labor and delivery room days, *fn2" Plaintiff sought to reopen its cost reports for 1983, 1984 and 1985 on May 1, 1989. See Administrative Record at 5 (hereinafter "AR"). The fiscal intermediary denied the request to reopen on July 20, 1989. Id. at 7. Plaintiff then appealed to the Provider Reimbursement Review Board on July 27, 1989. Id. at 5. On February 5, 1991, the PRRB held that it lacked jurisdiction to consider whether the intermediary wrongly refused to reopen the cost reports for 1983-85. Id. at 3. Invoking 42 U.S.C. § 1395oo(f), Plaintiff filed the instant action.

 Plaintiff makes essentially two claims. Primarily, Plaintiff argues that the PRRB has jurisdiction to consider an appeal of the intermediary's decision not to reopen. Alternatively, Plaintiff claims that this Court has jurisdiction, pursuant to 28 U.S.C. §§ 1331 and 1361, to direct the fiscal intermediary to reopen the cost reports. Defendant moved to dismiss, or in the alternative, for summary judgment, claiming that the PRRB did not have jurisdiction over the appeal and that the decision of the fiscal intermediary is not reviewable by this Court. Plaintiff does not directly refute the latter contention as to non-reviewability and instead argues that summary judgment is improper given deficiencies in the administrative record. Plaintiff also asks the Court to postpone decision until all appeals from common-issue related parties can be consolidated.

 ANALYSIS

 A. PLAINTIFF'S REQUEST FOR THE COURT TO DEFER CONSIDERATION OF THE INSTANT MOTION UNTIL ALL COMMON-ISSUE RELATED PROVIDERS (CIRPs) JOIN THE LAWSUIT LACKS MERIT.

 The plaintiff argues that this Court should defer consideration of the instant Motion because there has not been an adequate opportunity to combine appeals of common-issue related parties (CIRPs). Plaintiff asks the Court to remand this appeal to the PRRB until the Plaintiff) can consolidate other common-issue related parties and file a renewed appeal. However, this request for a stay does not comport with the regulatory framework nor is it justified in light of the information presented by the Plaintiff.

 The CIRP rule requires that

 any appeal filed by providers that are under common ownership or control must be brought by the providers as a group appeal in accordance with the provisions of paragraph (a) of this section with respect to any matter involving an issue common to the providers and for which the amount in controversy is, in the aggregate, $ 50,000 or more. . . .

 42 C.F.R. § 405.1837(b) (1991) (emphasis added). See also 42 C.F.R. § 405.1841(a)(2) (same). As is plain from the regulations, those providers which are under common ownership or control bear the responsibility for merging their respective appeals. Neither the statute nor the regulations place any obligation on the agency in this regard. If anything, based upon the statutory scheme, the agency could reasonably assume that the absence of a consolidated appeal means that no common issues exist. See 42 C.F.R. § 405.1837(b) ("A single provider involved in a group appeal that also wishes to appeal issues that are not common to the other providers in the group must file a separate hearing request . . .). In short, Plaintiff wrongly places the burden of identifying and consolidating appeals from common-issue related parties on the agency. Plaintiff's proposed stay contradicts the plain language of the regulations and defies common sense; the provider is in a better position to ascertain the litigation strategy of its "parent" company than is the agency.

 Moreover, Plaintiff cannot chastise the PRRB for denying its belated and unsubstantiated request to reopen the appeal for consolidation. Plaintiff filed its appeal on July 27, 1989 without naming any common-issue related providers in the suit. See AR at 5. Plaintiff first informed the PRRB of the existence of common-issue related parties for consolidation on February 14, 1991, see AR at 2, after the appeal had been dismissed for lack of jurisdiction and approximately 19 months after the Plaintiff initiated its separate appeal. See AR at 3 (PRRB's February 5, 1990 letter notifying Plaintiff of dismissal of appeal). Even at this late stage, Plaintiff did not name any other providers eligible for consolidation under the CIRP provisions. *fn3"

 B. THE PRRB DOES NOT HAVE JURISDICTION TO HEAR AN APPEAL OF THE FISCAL INTERMEDIARY'S DECISION NOT TO REOPEN

 Plaintiff contends that the intermediary's decision not to reopen is a "final determination" as to "the amount of total program reimbursement due the provider" subject to review by the PRRB pursuant to 42 U.S.C. § 1395oo(a)(1)(a)(i). *fn4" Defendant contends that the reopening process is separate and apart from the statutory appeals process and that the regulatory framework explicitly precludes review by the PRRB in these circumstances. *fn5" Although the Plaintiff's argument has been adopted by the Ninth Circuit, *fn6" ...


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