Dch Regional Medical Center v. Burwell
257 F. Supp. 3d 91
| D.D.C. | 2017Background
- DCH Regional Medical Center challenged the Secretary of HHS’s methodology for calculating the Medicare "Factor Three" estimate used to set a hospital’s disproportionate share (DSH) payments for FY2014.
- DCH alleges the Secretary restricted the calculation to data associated with a single provider number after a merger, omitting seven months of relevant data from the acquired hospital, resulting in reduced reimbursement.
- Defendant moved to dismiss, and the district court stayed proceedings pending the D.C. Circuit’s decision in Florida Health Scis. Ctr., Inc. v. Sec’y of HHS, which addressed whether 42 U.S.C. § 1395ww(r)(3) bars judicial review of the Secretary’s estimate and related data/methodology.
- The D.C. Circuit in Florida Health II held that the statutory bar on review of the Secretary’s estimate also precludes review of data inextricably intertwined with that estimate and restricted review of procedures that are effectively an attack on an individual estimate.
- Applying Florida Health II, the court concluded DCH’s challenge—though framed as a methodology or procedural claim—was inseparable from an attack on the Secretary’s individualized estimate and therefore jurisdictionally barred.
- The court denied DCH’s ultra vires and procedural-rule arguments and granted the Secretary’s motion to dismiss; the case was dismissed for lack of jurisdiction.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court has jurisdiction to review the Secretary’s methodology/data used to generate Factor Three | DCH: The methodology (restricting to a single provider number) is reviewable and arbitrary and capricious; seeks recalculation for DCH | Secretary: § 1395ww(r)(3) bars judicial review of the estimate and of data/methodology inextricably intertwined with that estimate | Court: Jurisdiction barred; dismissal granted |
| Whether the challenge is to a general rule (which may be reviewable) versus an attack on an individual estimate | DCH: Framed as a procedural/general-rule challenge to rulemaking and responses to comments | Secretary: The complaint seeks to undo an individual estimate, not invalidate a general rule | Court: Complaint is an attempt to relitigate an individualized estimate; not a permissible general-rule challenge |
| Whether an ultra vires claim preserves jurisdiction | DCH: Secretary acted beyond statutory authority (ultra vires) | Secretary: Methodology falls within statutory discretion; no patent statutory violation alleged | Court: No patent violation shown; ultra vires claim fails |
| Whether methodology and underlying data are separable from the barred estimate | DCH: Methodology challenge distinct from the estimate; concerns process and data selection | Secretary: Data and methodology are indispensable to the estimate and thus inextricably intertwined with the barred action | Court: Methodology/data are inextricably intertwined with the estimate and barred from review |
Key Cases Cited
- Florida Health Scis. Ctr., Inc. v. Sec’y of Health & Human Servs., 830 F.3d 515 (D.C. Cir. 2016) (holds § 1395ww(r)(3) bars review of the Secretary’s estimate and of data/procedures inextricably intertwined with that estimate)
- Florida Health Scis. Ctr., Inc. v. Sec’y of Health & Human Servs., 89 F. Supp. 3d 121 (D.D.C. 2015) (district-court decision addressing reviewability of the Secretary’s Factor Three estimate and data)
- Palisades Gen. Hosp. Inc. v. Leavitt, 426 F.3d 400 (D.C. Cir. 2005) (distinguishes permissible review of general rules from barred attempts to reverse individual decisions)
- COMSAT v. FCC, 114 F.3d 223 (D.C. Cir. 1997) (discusses when an ultra vires claim may permit judicial review)