United States District Court, District of Columbia
GLADYS KESSLER, District Judge.
Defendant United States Department of Health and Human Services ("HHS"), through its operating division, the Centers for Medicare & Medicaid Services ("CMS") (collectively, "Defendants"), has filed a Rule 59(e) Motion to Alter or Amend the Judgment ("Motion") [Dkt. No. 29] issued by the Court partially granting Plaintiff Georgia Department of Community Health's ("Georgia") Motion for Summary Judgment and ordering CMS to return $90, 050, 230. See Memorandum Opinion on the Motions for Summary Judgment [Dkt. No. 27].
Upon consideration of the Motion, Opposition ("Opp'n") [Dkt. No. 30], Reply ("Reply") [Dkt. No. 31], Sur-Reply ("Sur-Reply") [Dkt. No. 34], the entire record herein, and for the reasons stated below, Defendants' Motion to Alter or Amend the Judgment is granted in part and denied in part.
A brief recitation of the facts is necessary. For a detailed summary of the facts, see this Court's Memorandum Opinion on the Motions for Summary Judgment [Dkt. No. 27].
In 2003, Georgia launched a new system to process claims submitted by medical providers. It suffered from severe problems that resulted in significant delays in paying the providers, who were threatening to stop caring for patients. In response to this crisis, Georgia and CMS agreed that Georgia could make "advance" payments to providers until the new system was fixed. Between April 1, 2003, and June 30, 2005, Georgia made approximately $2 billion in advance payments to providers under this arrangement. Georgia Dep't of Cmty. Health, HHS Departmental Appeals Board ("DAB" or "the Board") No. 2521, 6 (Jun. 28, 2013) [hereinafter DAB No. 2521].
For its own internal accounting purposes, Georgia classified the advance payments as "provider receivables" (i.e. money to be recouped from Medicaid providers). However, for purposes of its Quarterly Statement of Expenditures ("QSE") that it submitted to CMS, Georgia reported the advance payments as current-quarter expenditures. Id.
In the process of preparing its State fiscal year 2005 financial statements, Georgia inadvertently included the federal share of its provider receivables balance - $45, 025, 115.09 ("$45 million") - in its decreasing adjustment on the QSE for the quarter ended September 30, 2005 ("September 2005 QSE"). Id . This error had the effect of mistakenly crediting $45 million to CMS. Of particular note for the issues raised in this motion, Georgia "netted the $45, 025, 115.09 provider receivables adjustment against an unrelated transaction in the amount of $15, 289, 462 (an increase in expenditures)." AR 63 (Georgia DAB Br. at 10, n.9). It was the net of the two amounts ($29, 735, 653) that was reported as a reduction in expenditures (i.e., a credit to CMS). Id.
While preparing its financial statements for State fiscal year 2006, Georgia again inadvertently credited $45 million to CMS, this time on the QSE for the quarter ended June 30, 2006. DAB No. 2521 at 7-8.
Combined, Georgia erroneously credited CMS $90, 050, 230 between 2005 and 2006 ("$90 million"). Georgia did not realize its errors until 2008. Once Georgia discovered the errors, it attempted to reclaim the $90 million by including the amount in the QSE for the quarter ended June 30, 2009. DAB No. 2521 at 8. CMS ultimately disallowed the $90 million adjustment. Georgia appealed CMS's decision to the Board. On June 28, 2013, the Board sustained the entire $90 million disallowance. See generally DAB No. 2521.
Georgia then filed its Complaint with this Court on August 23, 2013 [Dkt. No. 1]. The parties filed cross-Motions for Summary Judgment [Dkt. Nos. 13, 14]. On February 10, 2015, this Court upheld DAB's decision to disallow the $90 million adjustment, but also found that CMS had been unjustly enriched and ordered CMS to return the $90 million to Georgia. See Order on Motions for Summary Judgment [Dkt. No. 26] and accompanying Memorandum Opinion ("Opinion") [Dkt. No. 27].
II. STANDARD OF REVIEW
Defendants seek relief under Fed.R.Civ.P. 59(e), which provides that "[a] motion to alter or amend a judgment must be filed no later than 28 days after entry of the judgment." Fed.R.Civ.P. 59(e). A district court may grant a Rule 59(e) motion if there is "an intervening change of controlling law, the availability of new evidence, or the need to correct a clear legal error or prevent manifest injustice." Ciralsky v. Cent. Intelligence Agency, 355 F.3d 661, 671 (D.C. Cir. 2004) (internal quotation and citation omitted). "[A] Rule 59(e) motion may not be used to... raise arguments... that could have been raised prior to the entry of judgment." GSS Grp. Ltd. v. Nat'l Port Auth., 680 F.3d 805, 812 (D.C. Cir. 2012) (citation and internal quotation marks omitted).
The Court has discretion in deciding a Rule 59(e) motion. Firestone v. Firestone, 76 F.3d 1205, 1208 (D.C. Cir. 1996) (per curiam), although such relief "is an extraordinary remedy which should be used sparingly." Charles Alan Wright ...