Baptist Memorial Hospital v. Sebelius
768 F. Supp. 2d 295
D.D.C.2011Background
- Baptist-Memphis seeks review of the Secretary’s final decision denying an SNF RCL exception for FYE 1995 costs.
- The dispute arises under Medicare Part A and its cost-reimbursement framework, with NPRs and reopenings governing reviews.
- Baptist-Memphis allocated home office costs through its parent BMHCC; home office services may be reimbursed via allocations.
- The initial NPR (Sept. 21, 1998) showed SNF costs exceeding the RCL, and Baptist-Memphis did not timely seek an exception.
- Reopening on Aug. 7, 2001 revised the NPR by adjusting home office allocations; SNF costs above the RCL decreased and the revised NPR did not address all original excess costs.
- CMS ultimately held on Oct. 29, 2007 that exception relief following a revised NPR is limited to items affected by the revision and issued a final denial for costs not affected by the NPR revision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Secretary’s interpretation of § 413.30(c) is reasonable | Baptist-Memphis argues the rule cannot be read to restrict exceptions after a revised NPR. | The Secretary’s reading aligns with the regulation and reopening framework. | Yes, the interpretation is reasonable and entitled to deference. |
| Whether the Secretary’s decision is supported by substantial evidence | Baptist-Memphis contends untimely exception request should be allowed due to the revised NPR. | The request was untimely under 180-day rule and costs were not affected by the revision. | Yes, the decision is supported by substantial evidence. |
Key Cases Cited
- Thomas Jefferson Univ. v. Shalala, 512 U.S. 504 (U.S. Supreme Court, 1994) (statutory interpretation and deference to agency interpretations of regulations)
- Marymount Hosp., Inc. v. Shalala, 19 F.3d 658 (D.C. Cir. 1994) (deference to agency interpretation of Medicare regulations)
- HCA Health Servs. of Oklahoma v. Shalala, 27 F.3d 614 (D.C. Cir. 1994) (deference to agency interpretations in complex regulatory programs)
- St. Anthony’s Health Ctr. v. Leavitt, 579 F. Supp. 2d 115 (D.D.C. 2008) (precedent on reopening and review limitations under NPRs)