855 F. Supp. 2d 1
D.D.C.2012Background
- Sixteen hospitals challenge HHS’s calculation of DSH payments under 42 U.S.C. § 1395ww(d)(5)(F).
- Plaintiffs allege HHS excluded Medicare + Choice patient days from the Medicaid fraction, violating statutes and Administrative Procedure Act provisions.
- The D.C. Circuit held the 2004 rulemaking and amended § 412.106 were retroactive and invalid for fiscal years 1999–2002.
- As a result, the decision cannot be applied retroactively to those years, altering hospitals' legal consequences.
- The case is remanded to HHS for recalculation of reimbursements consistent with the Circuit’s ruling; the district court grants the remand motion.
- The court discusses interest under § 1395oo(f)(2) and defers prescribing remand standards to agency action on remand.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Retroactive rulemaking violation viability | Northeast Hospital supports retroactivity issue | Secretary’s interpretation should not be retroactive | Remand warranted; invalid rulemaking remains retroactive issue |
| Interest on recalculated amounts | Defendants owe interest under §1395oo(f)(2) | Interest applies only to amounts due after recalculation | Interest acknowledged as applicable only after recalculation; remand ongoing |
| Standards governing remand | Plaintiffs seek specific remedial standards on remand | Court should not issue detailed standards unless extraordinary | Court remands without detailed remedial standards; extraordinary circumstances not present |
| Authority for remand to HHS | Remand should be to HHS for recalculation | Remand appropriate under circuit precedent | Remand to HHS approved under Northeast Hospital Corp. v. Sebelius |
Key Cases Cited
- Northeast Hosp. Corp. v. Sebelius, 657 F.3d 1 (D.C. Cir. 2011) (retroactive rulemaking not permissible to 1999–2002)
- PPG Indus., Inc. v. United States, 52 F.3d 363 (D.C. Cir. 1995) (remand when error of law found; limited to extraordinary cases)
- Fed. Power Comm'n v. Idaho Power Co., 344 U.S. 17 (1952) (court cannot prescribe detailed remedial orders)
- N.C. Fisheries Ass’n, Inc. v. Gutierrez, 550 F.3d 16 (D.C. Cir. 2008) (remand and limited further agency action unless extraordinary)