American Hospital Association v. Thomas Price
2017 U.S. App. LEXIS 14887
| D.C. Cir. | 2017Background
- Medicare providers appeal denials through a four-level administrative process culminating in de novo ALJ hearings that the statute directs be completed within 90 days.
- Beginning in FY2011 appeals surged (partly from the Recovery Audit Contractor — RAC — program and demographic changes), producing an ALJ backlog exceeding 600,000 appeals and multi-year average processing times.
- Plaintiffs (AHA and three providers) sued under 28 U.S.C. § 1361 seeking a mandamus order to compel the HHS Secretary to eliminate the backlog and meet statutory timeframes; this Court previously held mandamus jurisdiction exists and that mandamus would likely be required absent meaningful progress (AHA I).
- On remand the district court balanced equities, granted mandamus relief, and adopted the plaintiffs’ four-year, ends-oriented timetable (30% reduction by 12/31/2017; 60% by 12/31/2018; 90% by 12/31/2019; 100% by 12/31/2020), leaving means to the Secretary.
- The Secretary appealed, arguing (a) lawful compliance may be impossible without impermissible mass settlements or other statutory violations, (b) RAC reforms alone likely won’t close the disposition gap, and (c) the timetable could perversely incentivize additional meritless appeals.
- The panel majority vacated and remanded, holding the district court abused its discretion by issuing the timetable without first addressing and making a finding about the Secretary’s assertion that lawful compliance was impossible.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Mandamus jurisdiction exists | Plaintiffs: mandamus is available; statute’s deadlines are mandatory and relief is warranted | Price: argued lack of jurisdiction earlier (rejected by this Court in AHA I) | Court had already held jurisdiction exists in AHA I; not revisited here |
| Whether mandamus equitable in merits | Plaintiffs: equities favor mandamus because statutory duty is clear and backlog harms providers | Price: equities cut against court-ordered timetable given resource constraints and need for lawful means | District court previously weighed equities in favor of mandamus; this panel accepts discretionary issuance but reviews scope for legal error |
| Whether court may impose ends-oriented timetable without first finding compliance lawfully possible | Plaintiffs: timetable is an ends-based, minimally intrusive remedy; Secretary can choose lawful means | Price: compliance with timetable would be impossible lawfully without mass, arguably illegal settlements; timetables could worsen the backlog | Majority: vacated and remanded — district court must test Secretary’s impossibility claim and make a predicate finding that lawful compliance is possible before issuing such a timetable |
| Scope of relief (means vs ends) and risk of counterproductive incentives | Plaintiffs: court should set targets and allow Secretary to choose means; settlements/statistical approaches can lawfully reduce backlog | Price: strict deadlines may incentivize more filings and require settlements that conflict with Medicare statute | Majority: agreed ends-oriented relief minimizes intrusion but stressed courts cannot order the impossible or illegal; district court must evaluate plausibility of Secretary’s harms and legal constraints on the means |
Key Cases Cited
- Am. Hosp. Ass'n v. Burwell, 812 F.3d 183 (D.C. Cir. 2016) (AHA I) (held mandamus jurisdiction existed and guided district court on equitable factors)
- NRDC v. Train, 510 F.2d 692 (D.C. Cir. 1974) (courts should not mandate flat deadlines where the agency demonstrates additional time is necessary; dispositive demonstration required)
- Ala. Power Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1979) (agency bears heavy burden to prove impossibility; courts may consider resource constraints)
- In re Core Commc’ns, Inc., 531 F.3d 849 (D.C. Cir. 2008) (mandamus is an extraordinary remedy)
- In re Medicare Reimbursement Litig., 414 F.3d 7 (D.C. Cir. 2005) (standard of review — district court abuse of discretion review for mandamus relief scope)
- Maggio v. Zeitz, 333 U.S. 56 (1948) (equity courts should not punish parties for failing to do the impossible)
- INS v. Pangilinan, 486 U.S. 875 (1988) (courts of equity cannot disregard statutory requirements)
- United States ex rel. Newman v. City & Suburban Ry. of Wash., 42 App. D.C. 417 (D.C. Cir. 1914) (mandamus will not issue to compel performance that cannot be legally accomplished)
- Koon v. United States, 518 U.S. 81 (1996) (a district court abuses its discretion when it makes an error of law)