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OZARK MT. REGIONAL REHABILITATION CTR., INC. v. HH

June 16, 1992

OZARK MOUNTAIN REGIONAL REHABILITATION CENTER, INC., Plaintiff,
v.
DEPARTMENT OF HEALTH & HUMAN SERVICES, PROVIDER REIMBURSEMENT REVIEW BOARD, Defendant.


JOHNSON


The opinion of the court was delivered by: NORMA HOLLOWAY JOHNSON

Plaintiff in this Medicare case challenges a determination made by the Provider Reimbursement Review Board ("PRRB") that it lacked jurisdiction to hear plaintiff's cost appeal for the 1983 fiscal year. *fn1" Pending before the Court are the parties' cross-motions for summary judgment. For the reasons outlined below, the Court will grant defendant's motion for summary judgment and deny plaintiff's motion for summary judgment.

 FACTUAL BACKGROUND

 Under the Medicare program, health care providers such as plaintiff are reimbursed for the costs they incur by fiscal intermediaries, private organizations designated by the Secretary of Health and Human Services ("the Secretary") to implement Medicare payment schemes. Each provider files an annual cost report with its intermediary at the end of each fiscal year, setting forth the reasonable costs it incurred during that year. The intermediary then analyzes and adjusts the cost report, in accordance with applicable regulations and guidelines, and finally issues a Notice of Program Reimbursement ("NPR"), which states the amount of allowable Medicare payments.

 If a provider disputes the fiscal intermediary's determination, it may file an appeal before the Medicare administrative tribunal, the Provider Reimbursement Review Board ("PRRB"). See 42 U.S.C. § 1395oo(a) (1988). The Medicare statute requires a provider to satisfy three statutory prerequisites in order to be entitled to a PRRB hearing: (1) there must be a final payment determination; (2) the amount in controversy must be $ 10,000 or more; and (3) the provider must file its request for a hearing within 180 days after receiving notice of the intermediary's final determination. 42 U.S.C. § 1395oo(a)(1)-1395oo(a)(3) (1988).

 Thus, once an NPR is issued, a provider has 180 days to file an appeal before the PRRB. However, the Secretary has promulgated a regulation which allows the PRRB to waive the 180-day time limit, if the PRRB determines that the provider has shown "good cause" for its untimely filing. 42 C.F.R. § 405.1841(b).

 Plaintiff in this case is a provider of Medicare services. Plaintiff received the fiscal intermediary's NPR of its 1983 cost year on October 10, 1985. On September 23, 1988, plaintiff filed with the PRRB a formal appeal of the NPRs for 1983 and several other fiscal years. See Certified Record of PRRB Proceedings Concerning Ozark Mountain Rehabilitation Center's Request for Hearing, at 108 (hereinafter "Certified Record"). By letter dated February 12, 1990, the PRRB indicated that plaintiff's 1983 appeal was untimely filed and that the PRRB would consider whether "good cause existed to extend the filing time requirements as permitted under 42 C.F.R. § 405.1841." Certified Record, at 65. Plaintiff's attorney wrote two letters to the PRRB, dated March 6, 1990, and September 21, 1990, in which he indicated plaintiff's view that "the Board has exercised sufficient acceptance of this case and has had sufficient knowledge through other notifications in a companion case for fiscal years August 31, 1980 and 1981, . . . that the Board should be estopped from declining jurisdiction at this late date." Certified Record, at 42.

 On October 2, 1990, the PRRB determined that plaintiff had not complied with the 180-day time limit for filing an appeal of its 1983 NPR, and further, that plaintiff had failed to demonstrate good cause for its failure to file a timely appeal. The PRRB therefore refused to exercise jurisdiction over plaintiff's appeal. Certified Record, at 38-39. On October 25, 1990, plaintiff requested a reconsideration of the PRRB's determination that it lacked jurisdiction; the request was denied by the PRRB on December 3, 1990. Plaintiff filed this case on February 7, 1991, seeking to reverse the PRRB's decision.

 DISCUSSION

 Defendant raises two principal arguments in its motion for summary judgment. First, defendant claims that this Court lacks jurisdiction over the case because plaintiff failed to meet the statutory jurisdictional prerequisites to administrative and judicial review set out in 42 U.S.C. § 1395oo(a). Specifically, defendant argues that plaintiff's failure to appeal the 1983 NPR within 180 days, as required by 42 U.S.C. § 1395oo(a)(3), precludes jurisdiction over its claim by the PRRB and by this Court. Alternatively, defendant asserts that, even if this Court does have jurisdiction over the PRRB's denial of plaintiff's appeal, it should dismiss plaintiff's claim because the PRRB did not abuse its discretion in refusing to grant plaintiff a "good cause" waiver.

 A. Jurisdiction Over Plaintiff's Claim

 Under the Medicare Act, the sole route for a provider to obtain judicial review of disputed reimbursement claims is found in § 1395oo(f)(1 of the Medicare Act. Under this provision, providers "have the right to obtain judicial review of any final decision of the Board . . .." 42 U.S.C. § 1395oo(f)(1). Therefore, the question before this Court is whether the PRRB's refusal to hear plaintiff's claim is a "final decision" within the meaning of the statute.

 Defendant argues that, by waiting almost three years to appeal its NPR, plaintiff failed to file a timely appeal and thus failed to meet one of the fundamental prerequisites to PRRB jurisdiction set out in § 1395oo(a)(3). Because the PRRB lacked jurisdiction to decide plaintiff's case, defendant reasons, the PRRB could not render a "final decision" over the dispute. Although plaintiff concedes that its appeal was untimely under the statute, plaintiff argues that the PRRB's decision not to exercise jurisdiction over plaintiff's claim was nevertheless a "final decision" within the meaning of § 1395oo(f)(1). Plaintiff relies on the regulation promulgated by the Secretary, 42 C.F.R. § 405.1841(b), which grants the PPRB discretion to extend the 180-day time limit for good cause. Thus, the Secretary's own regulation extends the jurisdictional time limit under certain circumstances.

 The question of whether a court may review a PRRB decision denying jurisdiction over a provider's case, where the provider has failed to meet the jurisdictional time limit set by statute, and the related question of the validity of the Secretary's regulation extending that time limit, has been addressed by several courts. However, there is a split in circuit authority on this issue. In similar cases before the Eighth and Eleventh Circuits, the courts concluded that the Secretary does not have authority to extend the time limit set in § 1395oo(a)(3) and that therefore the regulation at 42 C.F.R. § 405.1841(b) is invalid. See St. Joseph's Hospital of Kansas City v. Heckler, 786 F.2d 848 (8th Cir. 1986); Alacare Home Health Servs. Inc. v. Sullivan, 891 F.2d 850 (11th Cir. 1990). Because they determined that the Secretary's regulation was invalid, the Eighth and Eleventh Circuits concluded that courts lack jurisdiction to review a PRRB decision not to hear a provider's appeal, where the ...


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