932 F. Supp. 2d 194
D.D.C.2013Background
- Plaintiffs are hospitals participating in Medicare and challenged the Secretary's disallowance of their Medicare bad debt claims for 2003–2005.
- Action proceeds under the Medicare Act and the Administrative Procedure Act, with the court reviewing the Administrative Record on summary judgment.
- The Bad Debt Moratorium (1987) restricts changing the pre-August 1, 1987 bad debt policy and prohibits requiring hospitals to change their bad debt policies then in place.
- PRRB initially found in Plaintiffs' favor that uncollectible accounts could be claimed as bad debts; the Administrator reversed and upheld disallowances.
- The court vacates the Administrator's decision, finds lack of substantial evidence for pre-1987 presumption of collectability, and remands for further agency proceedings.
- Remedy awarded is remand to the Secretary, not immediate reimbursement of bad debt claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the presumption of collectability predate 1987? | Plaintiffs contend presumption existed before Moratorium. | Defendant argues presumption existed prior to Moratorium. | Court finds no substantial evidence for pre-1987 presumption. |
| Was the Administrator's determination supported by substantial evidence? | Administrator's finding rests on pre-1987 policy evidence and documents. | Administrator relied on CMS policy and pre-1987 materials showing presumption of collectability. | Administrator's finding not supported by substantial evidence; vacated. |
| What remedy should follow the vacatur? | Plaintiffs seek reimbursement for bad debt claims with interest. | Remand to agency for reconsideration is appropriate. | Remand to Secretary for further proceedings; not direct reimbursement. |
Key Cases Cited
- Foothill Hosp.- Morris L. Johnston Mem'l v. Leavitt, 558 F. Supp. 2d 1 (D.D.C. 2008) (courts remand where agency error of law is found in Moratorium context)
- Regions Hosp. v. Shalala, 522 U.S. 448 (S. Ct. 1998) (preemption and agency interpretations in Medicare reimbursement)