United States District Court, District of Columbia
B. WALTON UNITED STATES DISTRICT JUDGE
plaintiffs, eighty-one acute care hospitals located in
California, seek judicial review of the final decision of the
defendant, the Secretary of the United States Department of
Health and Human Services (the “Secretary”),
denying their claims for reimbursement of deductible and
coinsurance payments that were not paid to the hospitals by
Medicare beneficiaries. See Complaint
(“Compl.”) ¶¶ 1-2. Currently before the
Court is the Plaintiffs' Motion for Reconsideration and
Renewal of Motion for Summary Judgment and Objections; or, in
the Alternative, Motion for Scheduling Order and Retention of
Jurisdiction (“Pls.' Mot.” or the
“motion for reconsideration”), which seeks,
inter alia, reconsideration of the Court's prior
decision issued on September 29, 2018 (the “September
29, 2018 decision”) pursuant to Federal Rule of Civil
Procedure 59(e), or alternatively, pursuant to Rule 60(b).
See Pls.' Mot. at 2. Upon consideration of the
parties' submissions,  the Court concludes that it must grant
in part and deny in part the plaintiffs' motion for
Court previously described the relevant statutory and
regulatory framework and factual background in detail,
see Mercy Gen. Hosp. v. Azar, 344 F.Supp.3d 321,
326-33 (D.D.C. 2018) (Walton, J.), and therefore will not
reiterate these topics in full again.
Court will, however, discuss the procedural posture pertinent
to the resolution of the pending motion. As the Court
previously explained, see id. at 328, if Medicare
patients fail to pay the deductible and coinsurance payments
that they owe to providers, the providers may seek
reimbursement from the Centers for Medicare & Medicaid
Services (“CMS”) for these unpaid amounts, known
as “bad debts, ” see 42 C.F.R. §
413.89(e). To obtain reimbursement for these bad debts,
providers must demonstrate that the debt satisfies four
(1) The debt must be related to covered services and derived
from deductible and coinsurance amounts.
(2) The provider must be able to establish that reasonable
collection efforts were made.
(3) The debt was actually uncollectible when claimed as
(4) Sound business judgment established that there was no
likelihood of recovery at any time in the future.
Id. Chapter 3 of CMS's Provider Reimbursement
Manual (“PRM”) provides further instruction
regarding the requirements for bad debt reimbursement.
the [CMS] Administrator [(the “Administrator”)]
denied the plaintiffs' claims for Medicare reimbursement
of unpaid deductibles and coinsurance pursuant to the
Secretary's “must-bill policy, ” which
requires providers seeking Medicare reimbursement for bad
debts associated with dual eligible
[patients] to (1) bill the state Medicaid program
(the “billing requirement”) and (2) obtain and
submit to the [Medicare] intermediary [(the
“intermediary”)] a remittance advice from the
state Medicaid program (the “remittance advice
requirement”). The Administrator denied the
plaintiffs' claims for failing to satisfy the remittance
advice requirement. In opposition to this conclusion, the
plaintiffs argue[d] that (1) “[t]he Secretary's
purported must-bill policy . . . was not in place prior to
August 1, 1987, and therefore violates the [Bad Debt]
Moratorium, ” [(the
“Moratorium”)] or, alternatively, even if the
must-bill policy is lawful; (2) “the Secretary should
be ordered to accept the alternative documentation the
[p]laintiffs submitted” under “PRM [§]
1102.3L, which clearly provided that providers could submit
proper alternative documentation in lieu of billing the
State . . . and which was applicable to the
[p]laintiffs' cost years at issue”; and (3) the
plaintiffs' “EDS [reports] were the equivalent of
remittance advices from the State, and[, therefore, ]
rejecting them was improper, ” Mercy Gen.
Hosp., 344 F.Supp.3d at 335 (tenth, fourteenth through
seventeenth, nineteenth, and twentieth alterations in
original) (citations omitted).
Court, in its September 29, 2018 decision, partially granted
the plaintiffs' summary judgment motion and
conclude[d] that the Administrator's finding that the
Secretary's remittance advice requirement predated the
Moratorium [was] not supported by substantial evidence, and
thus, based on the administrative record before the
Secretary, application of such a requirement to the
plaintiffs' claims violated the Moratorium. Therefore,
the Court [could not] affirm the Secretary's denial of
the plaintiffs' claims on the basis that the plaintiffs
failed to provide remittance advices to support their claims.
Moreover, because the Administrator did not find that the
plaintiffs failed to bill the state for all of the claims at
issue, the Court [could not] affirm the Administrator's
decision denying all of the plaintiffs' claims on the
alternative ground that the plaintiffs failed to satisfy any
Id. at 354. Accordingly, the Court vacated the
Administrator's decision and remanded the case to the
Secretary for further proceedings. See Order at 1
(Sept. 29, 2018), ECF No. 49. Thereafter, on October 25,
2018, the plaintiffs filed their motion for reconsideration
of the Court's September 29, 2018 decision, see
Pl.'s Mot. at 1, which is the subject of this Memorandum
STANDARDS OF REVIEW
Rule 59(e) Motion for Reconsideration
Rule of Civil Procedure 59(e) permits a party to file
“[a] motion to alter or amend a judgment” within
“[twenty-eight] days after the entry of the
judgment.” Fed.R.Civ.P. 59(e). “Motions to alter
or amend a judgment under Federal Rule of Civil Procedure
59(e) lie within the discretion of the Court.” AARP
v. U.S. Equal Emp't Opportunity Comm'n, 292
F.Supp.3d 238, 241 (D.D.C. 2017) (citing Ciralsky v.
Cent. Intelligence Agency, 355 F.3d 661, 671 (D.C. Cir.
2004)). However, motions under Rule 59(e) are
“disfavored, ” and the moving party bears the
burden of establishing “extraordinary
circumstances” warranting relief from a final judgment.
E.g., Niedermeier v. Office of Baucus, 153
F.Supp.2d 23, 28 (D.D.C. 2001) (citing Anyanwutaku v.
Moore, 151 F.3d 1053, 1057 (D.C. Cir. 1998)).
“Rule 59(e) motions need not be granted unless the
district court finds that there is an intervening change of
controlling law, the availability of new evidence, or the
need to correct a clear error or prevent manifest
injustice.” Anyanwutaku, 151 F.3d at 1057-58
(citation and internal quotation marks omitted).
Rule 60(b) Motion for Reconsideration
60(b) provides that “‘upon such terms as are
just, the [C]ourt may relieve a party . . . from a final
judgment, order, or proceeding' for any of several
specified reasons.” Twelve John Does v. District of
Columbia, 841 F.2d 1133, 1138 (D.C. Cir. 1988) (quoting
Fed.R.Civ.P. 60(b)). Clause (b)(6) of Rule 60 “grants
federal courts broad authority to relieve a party from a
final judgment ‘upon such terms as are just,'
provided that the motion is made within a reasonable time and
is not premised on one of the grounds for relief enumerated
in clauses (b)(1) through (b)(5)” of the Rule.
Salazar ex rel. Salazar v. District of Columbia, 633
F.3d 1110, 1116 (D.C. Cir. 2011) (quoting Liljeberg v.
Health Servs. Acquisition Corp., 486 U.S. 847, 863
(1988)); see Fed.R.Civ.P. 60(b)(6) (permitting courts to
“relieve a party . . . from a final judgment, order, or
proceeding” for “any other reason that justifies
relief”). “The Rule does not particularize the
factors that justify relief, but . . . provides courts with
authority ‘adequate to enable them to vacate judgments
whenever such action is appropriate to accomplish
justice.'” Liljeberg, 486 U.S. at 863-64
(quoting Klapprott v. United States, 335 U.S. 601,
614-15 (1949)). Although the Court “enjoys a large
measure of discretion in deciding whether to grant or deny a
[Rule] 60(b)[(6)] motion, ” Randall v. Merrill
Lynch, 820 F.2d 1317, 1320 (D.C. Cir. 1987), the Supreme
Court has held that Rule 60(b)(6) applies only in
“extraordinary circumstances, ” Ackermann v.
United States, 340 U.S. 193, 202 (1950), and “this
[Circuit] has cautioned that Rule 60(b)(6) ‘should be
only sparingly used, '” Twelve John Does,
841 F.2d at 1140 (quoting Good Luck Nursing Home. Inc. v.
Harris, 636 F.2d 572, 577 (D.C. Cir. 1980)).
Whether Reconsideration is Appropriate
plaintiffs argue that reconsideration of the Court's
September 29, 2018 decision and Order pursuant to Rule 59(e)
is necessary “to correct a clear error or prevent
manifest injustice, ” Pls.' Mot. at 9 (internal
quotation marks omitted), “because the [decision]
awards summary judgment to [the] [p]laintiffs with too
limited a touch, ” id. at 1. Specifically,
they argue that “the Court's analysis that the
remittance advice component of the must bill policy violates
the Moratorium applies equally to the billing component,
” id. at 9, and thus, the Court committed
clear error “by effectively find[ing] [that the]
[p]laintiffs are entitled to relief from [both components of]
the must bill policy . . . but only grant[ing] relief as to
the remittance advice requirement, ” id. at 8.
The plaintiffs further argue that the Court's narrow
ruling is “manifestly unfair” because “the
[p]laintiffs likely will have to wait several more years for
the [ ] Administrator either to recognize that the must bill
component is meaningless without the remittance advice
requirement or to deny reimbursement simply on the basis that
the [p]laintiffs did not bill the State and force the
[p]laintiffs to then seek judicial review of the Moratorium
issue again.” Id. at 10. The plaintiffs
further argue that the Court erred because it “did not
rule on whether . . . PRM [§] 1102.3L applied to
[the] [p]laintiffs . . . [or] whether the EDS reports
submitted by [the] [p]laintiffs effectively satisfied any
valid billing requirement.” Id. at 1.