United States District Court, District of Columbia
ST. VINCENT'S MEDICAL CENTER, Plaintiff
SYLVIA M. BURWELL, in her official capacity as Secretary of Health and Human Services, Defendant.
BERMAN JACKSON, UNITED STATES DISTRICT JUDGE
St. Vincent's Medical Center has brought this action
against defendant Sylvia M. Burwell in her official capacity
as Secretary of Health and Human Services ("HHS"),
seeking judicial review of the dismissal of plaintiff s
appeal of a Medicare reimbursement determination. Compl.
[Dkt. # 1]. Specifically, plaintiff alleges that the Provider
Reimbursement Review Board ("the Board") erred when
it determined that it was required to dismiss plaintiffs
appeal - which was received one day late - as untimely, when
the regulations state only that "the Board may
dismiss a late-filed appeal. Id. ¶¶ 17-20,
24. The parties have filed cross-motions for summary
judgment, which have been fully briefed. PL's Mot. for
Summ. J. [Dkt. # 16] ("PL's Mot."); Mem. of P.
& A. in Supp. of PL's Mot. [Dkt. # 16]
("PL's Mem."); Def's Cross-Mot. for Summ.
J. & Opp. to PL's Mot. [Dkt. # 17] ("Def's
Mot."]; Mem. in Supp. of Def's Mot. [Dkt. # 17]
the relevant regulations and rules make clear that the Board
"may" - not "must" -dismiss an appeal if
a provider fails to meet a filing deadline, the Court agrees
with plaintiff that the Board's conclusion that it was
required to dismiss the appeal was not in accordance with law
and must be set aside. See 5 U.S.C. §
706(2)(A). Accordingly, the Court will deny defendant's
motion for summary judgment and grant plaintiffs motion on
Count I, and remand this matter to the agency for further
proceedings consistent with this opinion.
following facts are not in dispute. Plaintiff is a hospital
eligible to participate in the Medicare program, which
reimburses participants for the operating costs of certain
inpatient hospital services. Compl. ¶¶ 5, 8. Those
reimbursements are calculated based on a number of factors,
using a mathematical formula. Id. ¶¶ 8-12.
A provider that is dissatisfied with the reimbursement
determination may appeal to the Board within 180 days of
receiving notice of its reimbursement amount. Id.
case, plaintiff timely appealed from a reimbursement
determination, and on January 8, 2015, the Board established
a schedule of proceedings for the appeal which required
plaintiff to submit a final position paper no later than
September 1, 2015. Compl. ¶¶ 15-16; see
also Sept. 16, 2015 Board Letter, Ex. A to Compl. [Dkt.
# 1-1] ("Board Letter") at 1. On August 31, 2015,
one day before the position paper was due, plaintiff sent the
Board a copy of its position paper "via UPS guaranteed
overnight delivery service." Compl. ¶ 17. However,
on September 1, 2015, UPS informed plaintiff that "the
position paper would not be delivered on that day due to a
late UPS trailer arrival delaying the delivery"
Id. ¶ 18; see also UPS Receipt, Ex. B
to Compl. [Dkt. # 1-2] at 2. So plaintiff emailed a copy of
the position paper to the Director of the Board's
Division of Jurisdiction and Case Management that day. Compl.
¶ 19; see also Sept. 1, 2015 Email, Ex. C to
Compl. [Dkt. # 1-3]. The position paper was delivered by UPS
on September 2, 2016 and the Board received it the same day.
Compl. ¶¶ 18, 20; see also UPS Receipt at
letter dated September 16, 2015, the Board notified plaintiff
that it had dismissed its appeal "for failure to timely
file the final position paper." Board Letter at 1.
Citing to 42 C.F.R. § 405.1868 and Board Rule 27.1,
Board explained that "[t]he applicable regulation and
rule provide that the Board is to dismiss an appeal if the
Provider does not timely file its position paper."
Id. at 1; see also Id. at 2 ("The
language in the Board rule is clear that an appeal will be
dismissed if a position paper is not timely filed.").
initiated this action on November 15, 2015, seeking judicial
review of the Board's decision to dismiss its appeal.
Compl. The complaint contains three counts. In Count I,
plaintiff argues that the Board's dismissal decision was
inconsistent with the relevant regulations and the
Board's rules because those rules "state that the
Board may dismiss an appeal when the position paper
is not timely filed, " not that it must do so.
Id. ¶ 24. So, plaintiff alleges, the
Board's decision was contrary to law and must be set
aside pursuant to the Administrative Procedure Act
("APA"), 5 U.S.C. § 706(2)(A). Id.
¶ 26. In Count II, because "[t]he Board's rules
do not explicitly prohibit filing of position papers in
electronic format, " plaintiff maintains that defendant
acted arbitrarily and capriciously in violation of the APA by
dismissing the appeal despite the fact that the position
paper "was timely filed electronically."
Id. ¶¶ 28-29. And in Count III, plaintiff
argues that the Board cannot rely on its rule, which lists
the permissible methods of submitting documents to the Board,
as a basis for dismissing plaintiffs appeal, because that
rule was not listed or published in the Federal Register and
was not subject to notice and comment rule making.
Id. ¶¶ 31-33.
filed its motion for summary judgment on May 15, 2016,
PL's Mot., and defendant filed its combined opposition
and cross-motion two months later. Def's Mot. Plaintiff
filed its reply on August 29, 2016, PL's Mem. in Opp. to
Def.'s Mot. & Reply in Supp. of PL's Mot. [Dkt. #
21] ("PL's Reply"), and defendant filed its
cross-reply on October 17, 2016. Def.'s Reply in Supp. of
Def.'s Mot. [Dkt. # 22] ("Def.'s Reply").
the APA, a court must "hold unlawful and set aside
agency action, findings, and conclusions" that are
"arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law, " 5 U.S.C. §
706(2)(A), in excess of statutory authority, id.
§ 706(2)(C), or "without observance of procedure
required by law, " id. § 706(2)(D).
However, the scope of review is narrow. See Motor Vehicle
Mfrs. Ass'n of U.S., Inc. v. State Farm Mut. Auto. Ins.
Co., 463 U.S. 29, 43 (1983). The agency's decision
is presumed to be valid, see Citizens to Preserve
Overton Park, Inc. v. Volpe, 401 U.S. 402, 415
(1971), and the court must not "substitute its judgment
for that of the agency." State Farm, 463 U.S.
at 43. A court must be satisfied, though, that the agency has
"examine[d] the relevant data and articulate[d] a
satisfactory explanation for its action including a rational
connection between the facts found and the choice made."
Alpharma, Inc. v. Leavitt, 460 F.3d 1, 6 (D.C. Cir.
2006), quoting State Farm, 463 U.S. at 43.
Plaintiff did not fail to exhanst any mandatory
administrative remedy prior to initiating
cross-motion for summary judgment, defendant appears to argue
that plaintiff failed to exhaust its administrative remedies
prior to bringing this lawsuit. See Def.'s Mot.
At 3-4. ...