District Hospital Partners, L.P. v. Sebelius
2013 U.S. Dist. LEXIS 134033
| D.D.C. | 2013Background
- Plaintiffs are 186 Medicare-participating hospitals challenging HHS/Secretary Sebelius’s methodology for setting Medicare IPPS outlier payment thresholds for FFYs 2004–2006 as arbitrary and capricious under the APA (42 U.S.C. § 1395oo(f)(1)).
- Plaintiffs moved to compel supplementation of the administrative records for FFYs 2004–2006 with six categories of materials (data files, public comments, contractor data, CCR approximation data, an Outlier Correction Interim Final Rule (IFR) sent to OMB Feb. 13, 2003, and CMS Administrator Scully’s March 11, 2003 testimony), plus a privilege log.
- The Secretary conceded some missing FFY 2004 public comments (partial administrative record) and that certain materials were considered, but resisted broad supplementation and producing a privilege log.
- Legal standard: judicial review is limited to the administrative record; supplementation is the exception and allowed only if (a) agency deliberately/negligently excluded adverse documents, (b) background information is needed to assess consideration of factors, or (c) agency failed to explain action so as to frustrate review (City of Dania Beach test).
- The Court denied plaintiffs’ general request to “complete” the records or to rebut the presumption of regularity, but ordered limited supplementation of the FFY 2004 record: (1) include the Federation of American Hospitals (FAH) public comment and (2) include the Feb. 13, 2003 Outlier Correction Interim Final Rule. The motion to stay summary-judgment briefing was denied as moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs rebutted presumption of regularity and may force complete record production | The Secretary lost comments and failed to certify completeness; thus presumption rebutted and full records required | Agency entitled to strong presumption of regularity; missing materials do not alone defeat presumption | Presumption not rebutted; broad "complete the record" relief denied |
| Whether specific raw data (MedPAR 2000–2001, trimmed files, impact files, CCR approximation data, contractor/HCDI data) must be added | Plaintiffs: data were before agency and necessary to review calculations; trimming/cleaning means current files differ from those used | Secretary: underlying raw data not required for APA review; requests are under-identified or speculative | Denied for all requested raw/contractor data; MedPAR used but raw underlying data not required; no evidence of unusual circumstances |
| Whether missing public comments (FFY 2004) must be produced and whether FAH comment is part of record | Plaintiffs: all public comments on outlier thresholds should be included; FAH comment proposed $25,375 and was considered | Secretary: located most comments, cannot locate some boxes; will allow FAH comment to be cited but did not include it in record | General request to locate lost comments denied (no bad-faith shown); FAH comment ordered added to FFY 2004 record |
| Whether Outlier Correction IFR (Feb. 13, 2003) and Scully testimony must be included | Plaintiffs: IFR and Scully testimony reflect alternative methodologies and were before agency; exclusion frustrates review | Secretary: IFR is predecisional/deliberative or not "before" decision; Scully testimony is personal opinion, not evidence of agency consideration | IFR ordered added to FFY 2004 record (public, adverse, likely considered); Scully testimony not added (insufficient concrete evidence it was considered), though it may be cited/judicially noticed |
| Whether a privilege log or in-camera review of withheld deliberative materials is required | Plaintiffs: privilege log needed to identify withheld record materials and support supplementation arguments | Secretary: deliberative predecisional documents are not part of administrative record and need not be logged | Privilege log not required; agency’s privilege determinations stand absent rebuttal of presumption of regularity |
Key Cases Cited
- Walter O. Boswell Mem’l Hosp. v. Heckler, 749 F.2d 788 (D.C. Cir. 1984) (review of agency action should have neither more nor less information than agency had)
- City of Dania Beach v. F.A.A., 628 F.3d 581 (D.C. Cir. 2010) (three ‘‘unusual circumstances’’ standard for record supplementation)
- Pacific Shores Subdivision, Cal. Water Dist. v. U.S. Army Corps of Eng’rs, 448 F. Supp. 2d 1 (D.D.C. 2006) (agency entitled to presumption of regularity; supplementation is exception)
- Pub. Citizen v. Heckler, 653 F. Supp. 1229 (D.D.C. 1986) (agency may be required to include adverse drafts/comments in record when known and relevant)
- Todd v. Campbell, 446 F. Supp. 149 (D.D.C. 1978) (no general requirement to include raw source data for judicial review)
- NLRB v. Sears, Roebuck & Co., 421 U.S. 132 (U.S. 1975) (deliberative process privilege protects candid predecisional materials but not necessarily when publicized)
- Dudman Commc’ns Corp. v. Dep’t of Air Force, 815 F.2d 1565 (D.C. Cir. 1987) (deliberative process privilege standard explained)