United States District Court, District of Columbia
E. BOASBERG United States District Judge
there? Is Godot coming? Is this agency decision final?
Needing to ask typically signals the answer: Not yet. This
case involves Medicare reimbursements for hospital services
provided over ten years ago. In that decade, Plaintiffs
Empire Health Foundation and hospitals it owns have sought
reimbursement through successive stages of Medicare's
administrative-review process. Just when they thought that
the process was culminating, the Provider Reimbursement
Review Board then reviewing their claim remanded it,
directing them to start over. Empire Health had enough and
sued to challenge that remand order.
Sylvia Burwell, the Secretary of Health and Human Services,
now moves to dismiss the Complaint for want of subject-matter
jurisdiction. She argues that it is not yet time to hear this
case, as the remand does not constitute a final agency
decision for the Court to review. Because the Court agrees,
it will grant the Motion and let the administrative gears
Empire Health is a charitable organization based in Spokane,
Washington, which owns Valley Hospital and Deaconess Medical
Center (also Plaintiffs here). See Second Am. Compl.
(SAC), ¶ 5. Some time ago, those hospitals provided
services and are now in the midst of a process to obtain
Medicare reimbursement. (For ease of reference, the Court
will refer to all Plaintiffs collectively as “Empire
Health.”) Before exploring Plaintiffs' quest, the
Court will lay out how Medicare reimbursement works
Medicare Reimbursement Process
XVIII of the Social Security Act, commonly known as the
Medicare Act, establishes the federal Medicare program.
See 42 U.S.C. § 1395 et seq. Medicare
funds medical care for elderly or disabled persons by
reimbursing hospitals and other entities for services that
they provide those patients. See Ne. Hosp. Corp. v.
Sebelius, 657 F.3d 1, 2 (D.C. Cir. 2011). The Center for
Medicare and Medicaid Services (CMS), a component of the
Department of Health and Human Services, administers the
reimbursement process. See Ark. Dep't of Health &
Human Servs. v. Ahlborn, 547 U.S. 268, 275 (2006).
apparently, is far from swift. At the start of the Medicare
process, CMS enlists private companies - known as
“fiscal intermediaries” - to tabulate who is owed
what. To that end, at year's close, providers
participating in Medicare submit cost reports to their fiscal
intermediaries. See Sebelius v. Auburn Reg'l Med.
Ctr., 133 S.Ct. 817, 822 (2013); see also 42
C.F.R. §§ 413.20, 413.24. These intermediaries then
audit each cost report and inform the provider of the total
amount of Medicare reimbursement to which it is entitled, in
a document known as a Notice of Program Reimbursement (NPR).
See Emanuel Med. Ctr., Inc. v. Sebelius, 37
F.Supp.3d 348, 350 (D.D.C. 2014) (citing 42 C.F.R. §
hospital or other provider believing that it is not being
reimbursed its fair share in the NPR may bring a challenge
with the Provider Reimbursement Review Board (PRRB) and, if
still unsatisfied, obtain further review by the Secretary
(which occurs at her discretion). See 42 U.S.C.
§ 1395oo(a), (f). “The Board can affirm, modify,
or reverse the fiscal intermediary's award; the Secretary
in turn may affirm, modify, or reverse the PRRB's
decision.” Emanuel, 37 F.Supp.3d at 350
(citing 42 U.S.C. § 1395oo(d)-(f)). If, at the end of
these appeals, the provider still feels shortchanged, it has
“the right to obtain judicial review of any final
decision.” 42 U.S.C. § 1395oo(f)(1); 42 C.F.R.
Medicare Reimbursement Amount
this intricate procedural setup, brewing the actual
reimbursement amount itself requires a master class in
molecular gastronomy. Although this Opinion will provide only
an overview of how the NPR is concocted, past Opinions of
this Court detail the reimbursement recipe. E.g.,
Cooper Hosp./Univ. Med. Ctr. v. Burwell, No.
14-1991, 2016 WL 1436646, at *2-3 (D.D.C. Apr. 11, 2016).
begin, even though Medicare purportedly reimburses hospitals
for providing services, the actual reimbursement sum
is roughly pegged to the number of patients
discharged. See 42 U.S.C. § 1395ww(d). Certain
adjustments are then tossed into the cauldron. One such
adjustment is a bump-up for hospitals that “serve a
significantly disproportionate number of low-income
patients” - the so-called “disproportionate share
hospital” or “DSH” adjustment. See
42 U.S.C. § 1395ww(d)(5)(F)(i)(I).
DSH adjustment relies on another formula, which churns out a
percentage representing the number of low-income patients
that the hospital serves. See Id. §
1395ww(d)(5)(F); see also Allina Health Servs. v.
Sebelius, 746 F.3d 1102, 1105 (D.C. Cir. 2014). One
ingredient in this percentage is a fraction that takes into
consideration the number of hospital-inpatient days spent by
patients who were covered by Medicare and received
Supplemental Security Income. See 42 U.S.C. §
1395ww(d)(5)(F)(vi)(I). CMS determines this Medicare-SSI
fraction by matching Medicare-patient billing records with
individual SSI records maintained by the Social Security
Administration; the Agency then provides that fraction to the
fiscal intermediary calculating the DSH adjustment and
reimbursement entitlement. See 75 Fed Reg. 50, 276
(Aug. 16, 2010).
CMS Ruling 1498-R
could possibly go wrong? A few years back, this convoluted
scheme came under attack, resulting in a decision by a fellow
judge in this district that required HHS to tweak its
Medicare-SSI fraction. See Baystate Med. Ctr. v.
Leavitt, 587 F.Supp.2d 37 (D.D.C. 2008), as
amended, 587 F.Supp.2d 44 (D.D.C. 2008). In response, in
2010, CMS published a ruling that attempted to fix some of
the issues raised, by making three alterations to how the
fraction was calculated. See CMS Ruling 1498-R, 2010
WL 3492477 (Apr. 28, 2010). That Ruling in part rejiggered
the process for matching Medicare and SSI records. See
id. at *2.
for our purposes, CMS Ruling 1498-R also provided that any
pending reimbursement appeals related to the data-matching
issue would automatically be sent back to the fiscal
intermediaries for recalculation. Specifically, the Ruling
stated that the PRRB “lack[s] jurisdiction over each
properly pending claim on the SSI fraction data matching
process issue.” Id. at *3. Only after further
number-crunching by the fiscal intermediary would the revised
NPR be “subject to administrative and judicial review
in accordance with the applicable jurisdictional and
procedural requirements of section 1878 of the Act, the
Medicare regulations, and other agency rules and
guidelines.” Id. at *14.
Empire Health's Reimbursement Challenges
brings the Court to the present case. In 2009, Empire Health
lodged a challenge with the PRRB to its fiscal
intermediary's reimbursement sum for several fiscal years
beginning in 2005. See ECF No. 21, Exh. 2 (PRRB
Remand Order). Because Empire Health objected to, inter
alia, the Medicare-SSI data-matching process that was
used, in October 2015 the PRRB remanded the dispute to the
fiscal intermediary for recalculation pursuant to CMS Ruling
1498-R. See id. at 2 (“[T]he Ruling requires
that Board remand each qualifying appeal of this issue to the
appropriate Medicare contractor to recalculate each
provider's DSH payment.”).
with this instruction to start over again, Plaintiffs sent a
letter to the PRRB informing it that the
Medicare-SSI-fraction challenge “WAS NOT our only claim
- nor was it our primary claim.” ECF No. 21, Exh. 3
(Nov. 4, 2015, Letter to PRRB). Empire Health, in effect,
objected to the Board's remanding its whole
reimbursement appeal when only part of that appeal
fell within the ambit of CMS Ruling 1498-R.
the PRRB could respond, Plaintiffs in December 2015 filed
this suit to challenge issues relating to reimbursement.
See ECF No. 1 (Complaint), 8 (First Amended
Complaint). In February 2016, the PRRB denied Empire
Health's request to undo the remand. See ECF No.
21, Exh. 4 (Feb. 29, 2016, Letter from PRRB). Following
Defendant's first motion to dismiss for lack of
subject-matter jurisdiction, Plaintiffs again narrowed their
Complaint so that it sought judicial review only of the
remand order. Specifically, Empire Health now brings five
counts: three challenging CMS Ruling ...