The opinion of the court was delivered by: Louis F. Oberdorfer United States District Judge
This dispute concerns whether Defendant Secretary of the Department of Health and Human Services (the "Secretary") must reimburse Plaintiff Chestnut Hill Hospital (the "Hospital") for certain medical education costs that the Hospital incurred during the time its family practice residents spent rotating to non-hospital settings in 1999 and 2000. The Secretary has applied a federal regulatory "written agreement" requirement, see 42 C.F.R. §§ 413.86(f)(4)(ii), 412.105(f)(1)(ii)(C) (1999 & 2000), to deny such reimbursement.
The Hospital contends that the Secretary exceeded his regulatory authority in developing and applying the "written agreement" requirement. During the time period here relevant (1999 and 2000), however, Congress (1) authorized (indeed, required) the Secretary to "prescribe such regulations as may be necessary to carry out the administration of [among other things, the relevant reimbursement provisions]," 42 U.S.C. § 1395hh(a)(1) (1999 & 2000), and (2) barred the Secretary from making payments "to any provider [e.g., a hospital] unless it has furnished such information as the Secretary may request in order to determine the amounts due such provider," 42 U.S.C. § 1395g(a) (1999 & 2000).
Alternatively, the Hospital argues that, even if the Secretary did possess authority to implement the "written agreement" requirement, (1) Section 713 of the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Pub. L. No. 108-173, barred him from enforcing that requirement in these circumstances and/or (2) it did in fact comply with that requirement. However, Section 713 is inapplicable to the time period here relevant and substantial evidence supports the Secretary's determination that the Hospital had not entered the required "written agreement."
The Hospital operates a family practice medical residency training program. See Plaintiff's Statement of Material Facts as to Which There is No Genuine Issue ¶ 4. During fiscal years 1999 and 2000, the Hospital rotated some of its family practice residents to non-hospital settings. See Defendant's Statement of Material Facts Not in Genuine Dispute ¶¶ 4, 5; Plaintiff's Concise Statement of Genuine Issues of Material Facts ¶¶ 4, 5.
Several facts are potentially relevant to whether the Hospital maintained the "written agreement" required by the disputed federal regulations. First, the Hospital's By-Laws (which were written) conditioned membership on the Hospital Staff on "[p]articipat[ion] in the . . . resident teaching program if requested to [do so]." Administrative Record ("A.R.") at 453. This, coupled with the fact that all physician participants in the non-hospital residency teaching program were members of the Hospital Staff (and had executed a separate document by which they agreed to abide by the By-Laws, see A.R. at 444 (Release Agreement)), means that each of those physician participants was bound by written agreement to "[p]articipate in the . . . resident teaching program if requested to [do so]." Second, the Hospital maintained written employment agreements with its residents; those employment agreements obligated the Hospital to provide the residents with certain salaries and benefits. See Plaintiff's Statement of Material Facts as to Which There is No Genuine Issue ¶¶ 8, 9. Third, in 2002 the Hospital entered into a written Memorandum of Understanding with representatives of the non-hospital settings in which the parties purported to "reiterate and confirm" the terms of their agreement for the participation of the non-hospital settings in the resident training program. See id. at ¶ 23.
In 2002, a fiscal intermediary of the Secretary held that the Hospital was not entitled to reimbursement for the fiscal year 1999 and 2000 medical education costs of its family practice residents during the time those residents spent rotating to non-hospital settings. See Plaintiff's Statement of Material Facts as to Which There is No Genuine Issue ¶ 19. The Hospital appealed to the Secretary's Provider Reimbursement Review Board (the "Board"). See id. at ¶ 24. The Board held a hearing on June 27, 2003; on May 6, 2004, it upheld the intermediary's disallowances. See id. at ¶¶ 24, 27. It did so on the basis of its determination that the Hospital had not complied with the "written agreement" requirement of 42 C.F.R. §§ 413.86(f)(4)(ii), 412.105(f)(1)(ii)(C) (1999 & 2000). See id. at ¶ 27.
The Hospital subsequently brought this action and, on February 28, 2005, moved for summary judgment [docket number 14]. On April 27, 2005, the Secretary filed his cross-motion for summary judgment [docket number 16]. On May 18, 2006, the undersigned accepted transfer of the cross-motions for summary judgment for decision. See Local Civil Rule 40.6(a).
An accompanying order denies the Hospital's summary judgment motion and grants the Secretary's motion.
A. Standard of Review and ...