Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Swedish American Hospital v. Sebelius

March 5, 2010

SWEDISH AMERICAN HOSPITAL, PLAINTIFF,
v.
KATHLEEN SEBELIUS, IN HER OFFICIAL CAPACITY AS SECRETARY OF THE DEPARTMENT OF HEALTH AND HUMAN SERVICES, ET AL., DEFENDANTS.



The opinion of the court was delivered by: Ricardo M. Urbina United States District Judge

Re Document Nos. 4, 13

MEMORANDUM OPINION

GRANTING IN PART AND DENYING IN PART THE DEFENDANTS' MOTION TO DISMISS; GRANTING THE PLAINTIFF'S MOTION TO COMPEL PRODUCTION OF THE ADMINISTRATIVE RECORD

I. INTRODUCTION

This matter comes before the court on the defendants' motion to dismiss and the plaintiff's motion to compel production of the administrative record. On September 30, 2008, the Secretary of the Department of Health and Human Services ("the Secretary") issued an administrative ruling that required the plaintiff, a hospital in Rockford, Illinois, to repay several million dollars to the Medicare program. The plaintiff commenced this action challenging the Secretary's decision under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 et seq., and asserting tort claims against Mutual of Omaha ("Mutual"), the insurance company that advised the plaintiff with respect to its Medicare obligations, and Wisconsin Physicians Service Insurance Corporation ("WPS"), the insurance company to which Mutual's Medicare business was transferred in 2007. As discussed in more detail below, because the court lacks subject matter jurisdiction over the plaintiff's tort claims against the insurance companies, it grants in part the defendants' motion to dismiss. The court denies, however, the portion of the defendants' motion that calls for the dismissal of the plaintiff's APA claim against the Secretary. Finally, the court grants the plaintiff's motion to compel production of the administrative record.

II. BACKGROUND

A. The Medicare Program

Medicare provides health insurance to the elderly and disabled by entitling eligible beneficiaries to have payment made on their behalf for the care and services rendered by hospitals, termed "providers." See 42 U.S.C. §§ 1395 et seq. Providers, in turn, are reimbursed by insurance companies, known as "fiscal intermediaries," that have contracted with the Department of Health and Human Services to aid in administering the Medicare program. See id. § 1395h. Fiscal intermediaries determine the amount of reimbursement due to providers under the Medicare Act and applicable regulations. See id.

Providers that train residents in approved residency programs may be reimbursed for the costs of "graduate medical education" ("GME") and "indirect medical education" ("IME"). See 42 U.S.C. § 1395ww. One variable used to calculate the GME and IME costs to be allocated to a provider is the number of full-time equivalent ("FTE") residents in that provider's training program. See id. A high GME or IME FTE count yields a correspondingly high GME or IME payment for the provider. See id.

Providers obtain Medicare reimbursement by submitting cost reports to their fiscal intermediary demonstrating the costs they incurred during the previous fiscal year and the portion of those costs to be allocated to Medicare. See 42 C.F.R. § 413.20. After receiving a provider's cost report, the fiscal intermediary may audit the report before determining the total amount of reimbursement to which the hospital is entitled, which it then memorializes in a Notice of Program Reimbursement ("NPR"). See id. § 405.1803. The fiscal intermediary may reopen and revise a cost report within three years after the date of the NPR. Id. § 405.1885.

In the Balanced Budget Act of 1997 ("BBA"), Congress capped the amount that providers could be reimbursed for their GME and IME costs. See id. More specifically, for cost reporting periods beginning on or after October 1, 1997, teaching hospitals were limited to the number of GME FTEs and IME FTEs "for the hospital's most recent cost reporting period ending on or before December 31, 1996" for the purpose of calculating GME and IME payments. See id. Following the enactment of the BBA, the Secretary promulgated regulations implementing the caps imposed by the statute. See 42 C.F.R. §§ 413.86(g)(4), 412.105(f)(1)(iv) (1997). The Secretary subsequently revised the regulations concerning the GME and IME resident caps in 1998, 1999 and 2001. See 42 C.F.R. §§ 413.86, 412.105 (1998); 42 C.F.R. §§ 413.86(g)(8) (1999); 42 C.F.R. §§ 413.86(g)(8)(iii), 412.105(f)(1)(ix) (2001).

B. Factual and Procedural History

The plaintiff is a certified Medicare provider that participates in the Family Practice Residency Program ("the residency program"), which is sponsored by the University of Illinois College of Medicine for the purpose of training residents as family practice physicians. Compl. ¶¶ 12-14. The plaintiff alleges that during fiscal years 1995 and 1996, another hospital, St. Anthony Medical Center ("St. Anthony"), also participated in the residency program. Id. ¶¶ 17-18. In 1996, however, St. Anthony withdrew from the program and the plaintiff absorbed the residents that St. Anthony would otherwise have trained. Id.

After the plaintiff took on the residents who had previously been trained by St. Anthony, the plaintiff contacted the fiscal intermediary, Mutual, which advised the plaintiff to adjust its GME and IME FTE resident caps upward to reflect the fact that the plaintiff had assumed the residents formerly trained by St. Anthony. Id. ΒΆΒΆ 18-19. The plaintiff's NPRs for fiscal years 1998 through 2002 were based on FTE resident caps that ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.