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Biles v. Department of Health & Human Services

United States District Court, District of Columbia

March 21, 2013

BRIAN BILES, Plaintiff,

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[Copyrighted Material Omitted]

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For BRIAN BILES, PROFESSOR, Plaintiff: Jeffrey S. Gutman, LEAD ATTORNEY, GEORGE WASHINGTON UNIVERSITY LAW SCHOOL, Community Legal Clinics, Washington, DC.




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Plaintiff Brian Biles, MD, MPH (" Dr. Biles" ), brings an action against defendant U.S. Department of Health and Human Services (" HHS" ) under the Freedom of Information Act (" FOIA" ), 5 U.S.C. § 552 (2012), for injunctive relief, claiming that HHS is unlawfully withholding information that Dr. Biles requested in a proper FOIA request. HHS claims that the information is properly withheld under FOIA's Exemption Four because the release of the information would cause substantial competitive harm to the private health insurance companies that submitted the requested data to HHS in 2010 and would impair HHS's ability to obtain accurate information in the future.

Before the Court is defendant's Motion for Summary Judgment, ECF No. 20, April 30, 2012, and plaintiff's Cross Motion for Summary Judgment, ECF No. 24, July 13, 2012. Upon consideration of defendant's motion, plaintiff's cross motion and opposition, defendant's reply and opposition, ECF No. 27, Aug. 13, 2012, plaintiff's reply, ECF No. 30, Sept. 10, 2012, the applicable law, and the record herein, the Court will DENY defendant's motion and GRANT plaintiff's motion.


On July 18, 2011, plaintiff Dr. Biles--a professor at The George Washington University School of Public Health and Health Services who studies the Medicare Advantage (" MA" ) program--filed a FOIA request with defendant HHS's Centers for Medicare and Medicaid Services (" CMS" ), which oversees the Medicare Advantage (" MA" ) program. Pl.'s Mem. in Opp'n to Def.'s M. Summ. J. & in Supp. of Pl.'s M. Summ. J. (" Pl.'s Mem." ) 2, ECF No. 24-1; Biles Decl. ¶ 1, Exh. A (CV), ECF No. 24-2; Def.'s Mem. in Supp. of Def.'s M. Summ. J. (" Def.'s Mem." ) 4, ECF No. 20. In order to analyze the efficiency and effectiveness of the MA and Medicare programs, Dr. Biles requested " specific data and other information for 2009 provided to CMS, in or about June 2010, by all Medicare Part C Medicare Advantage Organizations on WORKSHEET 1--MA BASE

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PERIOD EXPERIENCE AND PROJECTION ASSUMPTIONS." Pl.'s Complaint ¶ 1; Def.'s Mem. 4; Biles Decl. Ex. F, at 1 (FOIA Request).

Medicare Advantage organizations (" MAOs" ) are private insurance companies that offer health insurance coverage to Medicare beneficiaries and are required, pursuant to 42 C.F.R. § 422.254, to submit a Bid Pricing Tool to CMS by the first Monday of June each year. Rice Decl. ¶ ¶ 5, 7-9, ECF No. 20-1; Pl.'s Mem. 2. The Bid Pricing Tool is an Excel workbook comprised of seven worksheets of data that determine the projected costs and revenue for an MAO to provide coverage to MA beneficiaries in the next calendar year. Def.'s Mem. 4; Pl.'s Mem. 1-3; Rice Decl. ¶ ¶ 5-7, 12. The " bid" submitted by MAOs is not like a traditional bid in a competitive arena where one winner takes all, as in bids for government contracts. Pl.'s Mem. 7. CMS explains:

[T]he MA . . . program[] [is] not competitive in the way that term is normally understood. Although [MAOs] do compete for members, primarily through the benefits offered and the cost (member cost sharing and premium) of those benefits, they do not directly compete for the payments that CMS makes.[1]

CMS " approve[s] all sustainable bids that are otherwise qualified without preference for the lowest bidder." [2] 76 Fed. Reg. at 21,518.

Further unlike a competitive bid for a contract where the bidder can choose his desired bid amount, an MAO's " bid" is based on the MAO's actual costs expended by the MAO in the previous year to provide its offered Medicare benefits; this data is called the MAO's " base period" data and is the category from which Dr. Biles has requested specific data. Pl.'s Mem. 7; see Rice Decl. ¶ 6. Base period data must be verified by an actuary. Pl.'s Mem. 15, 42; Rice Decl. ¶ 12; 76 Fed. Reg. at 21,518 (statement by CMS/HHS) (" Utilization, costs, and trends must be certified by a qualified, independent actuary prior to bid submission." ); 42 C.F.R. § 422.254(b)(5) (2012).

Ultimately, the " bid" data is trended forward to the next year by a series of formulae, like inflation and other factors, embedded in the seven Excel worksheets of the Bid Pricing Tool. Pl.'s Mem. 7; see Rice Decl. ¶ 6; 76 Fed. Reg. at 21,517. The formulae calculate the bid data to determine the expected revenue needed to cover the MAO's projected Medicare costs for the next year. Pl.'s Mem. 7; Rice Decl. ¶ 6; 42 C.F.R. § 422.245(a)(1) (2012). This " payment plan" is the basis for CMS's payments to an MAO, and CMS pays MAOs one year in advance to cover its portion of the MAOs' projected cost and

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revenue requirements for the next year. See id; Rice Decl. ¶ ¶ 6-11; Pl.'s Mem. 7; 42 C.F.R. § 422.254(a)(1) (2012). For example, an MAO's 2011 payment plan is based on 2009 actuarial data. See Pl.'s Mem. 7; Rice Decl. ¶ 12.

Additionally, while the payment plan is determined according to the MAO's estimated internal costs, the payment amount is limited by a federally-set benchmark, which is the maximum amount CMS will pay an MAO in a given locality. See 42 U.S.C. § 1395w-23(b)(1)(B) (2012); 42 C.F.R. § 422.258 (2012). The benchmarks are publicly announced by the first Monday in April of the year prior to the bid submissions to which the benchmarks will apply. 42 U.S.C. § 1395w-23(b)(1)(B).

Dr. Biles requested " retroactive," " historical" cost and utilization data from Sections I, II, III, and VI of Worksheet One[3] of the Bid Pricing Tool and claims to have not requested any data that " disclose[s] MAO assumptions, predictions, projections, or expectations for how th[o]se costs may change in the future." Pl.'s Mem. 8; Def.'s Mot. Summ. J. Ex. 1; Def.'s Mem 4 (" Def.'s Statement of Material Facts Not in Genuine Dispute" ) ¶ 3; Biles Decl. ¶ ¶ 58-60, 95. Section I was released to Dr. Biles by CMS and is therefore not in dispute. Biles Decl. ¶ 96; Def.'s M. Summ. J. Exs. 1-3, Ex. 4 at 2. Sections II, III, and VI are in dispute, as CMS refuses to disclose those sections in their entirety pursuant to FOIA's Exemption Four. Pl.'s Mem. 3, Exs. 3-4; Marquis Decl. ¶ ¶ 21-27, ECF No. 20-2.

Section II contains base period background information that defines the period of time that Section III data[4] reflects and includes the " Paid Through Date," [5] " Member Months," [6] and the " Non ESRD Risk Score," [7] along with other background data. Biles Decl. ¶ 97-107.

Section III is retrospective 2009 cost and utilization data for various types of health services the MAO covers in its offered plans. Biles Decl. ¶ 108. Section III includes the rates that each service was utilized during 2009 and automatically populates

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the average cost per utilization. Biles Decl. ¶ ¶ 111-12. Section III also provides the costs per member per month (" PMPM" ) by service category for the base period; the total PMPM costs for a type of health service are the result of three factors--the price paid for services, the quantity of services used, and the intensity of services (the extent that highly expensive new technology was used). Biles Decl. ¶ ¶ 112-13.

Section VI reflects the MAO's revenue for the calendar year as well as non-benefit expenses, like internal operating costs, that were required to provide the services described in Section III for the 2009 calendar year. Biles Decl. ¶ 114.


A. Summary Judgment

" The court shall grant summary judgment if the movant shows that (1) there is no genuine dispute as to any material fact and (2) the movant is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(a) (emphasis added); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The mere existence of any factual dispute will not defeat summary judgment; the requirement is that there be no genuine dispute about a material fact. Anderson, 477 U.S. 247-48. A fact is material if, under the applicable law, it could affect the outcome of the case. Id. A dispute is genuine if the " evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. In order for the dispute to be genuine, a nonmoving party must present enough specific facts, beyond mere allegations or conclusory statements, that would enable a reasonable jury to find in favor of the nonmoving party. Anderson, 477 U.S. at 252; Greene v. Dalton, 164 F.3d 671, 675, 334 U.S. App. D.C. 92 (D.C. Cir. 1999). Because the court cannot try issues of fact when determining summary judgment but can only determine whether there are issues to be tried, the nonmoving party's evidence is to be believed and all justifiable inferences are to be drawn in the nonmoving party's favor. Id. at 255; see Freeman v. Continental Gin Co., 381 F.2d 459, 469 (5th Cir. 1967).

The court must find that the movant is entitled to " judgment as a matter of law" in order to grant summary judgment, Fed.R.Civ.P. 56(a), and therefore must find that there is no genuine issue for trial. There is no genuine issue for trial unless the nonmoving party provides sufficient favorable evidence to enable a jury to return a verdict for the nonmoving party. Anderson, 477 U.S. at 250-51 (explaining that the summary judgment inquiry is whether " there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party," agreeing that the standard for summary judgment mirrors the standard for a directed verdict under Fed. R. Civ. Pro. 50(a), and instructing that " [i]f reasonable minds could differ as to the import of the evidence . . . a verdict [or a summary judgment] should not be directed [or granted]" ). ...

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