464 F.Supp.3d 1
D.D.C.2020Background
- McLaren Flint received an original NPR (April 9, 2013) for FY 2008 and did not timely appeal that original NPR.
- The MAC reopened the NPR to revise only the hospital’s count of additional Medicaid-eligible days and expressly instructed that Part C (Medicare Advantage) days not be included; an RNPR issued May 15, 2014.
- McLaren Flint joined a multi-provider group appeal challenging allocation of Medicare Part C days between the Medicare and Medicaid fractions and later requested expedited judicial review (EJR).
- The Board concluded it lacked jurisdiction over McLaren Flint because the RNPR it appealed revised only Medicaid days and did not reopen or adjust Part C days.
- McLaren sued, arguing the Board’s jurisdictional denial was arbitrary and capricious because Medicaid-eligible days are interconnected with Part C allocation; the government defended the Board’s application of the issue-specific reopening rule.
- The district court granted summary judgment to the defendant and denied McLaren’s motion, holding the Board’s jurisdictional ruling was reasonable and consistent with the reopening regulations.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Board had jurisdiction to consider McLaren’s challenge to Part C allocation via the RNPR appeal | McLaren: Medicaid-eligible days are intertwined with Part C allocation; RNPR’s Medicaid-days revision made Part C allocation part of the appealed matter | HHS: RNPR revised only Medicaid-days; reopening appeals are limited to issues specifically revised, so Part C allocation was not before the Board | Held: Board lacked jurisdiction; RNPR did not reopen/adjust Part C days, so McLaren could not raise that issue on RNPR appeal |
| Validity of issue-specific interpretation of reopening regulations | McLaren: Applying issue-specific approach here improperly bifurcates DSH calculation components | HHS: Issue-specific approach is a permissible, longstanding interpretation that furthers finality and the 180-day appeal window | Held: Court affirmed issue-specific approach as reasonable and properly applied in this case |
| Whether the Board should have treated the group’s single Part C issue as opening all DSH subcomponents for McLaren | McLaren: Board agreed to treat Part C allocation as one issue across fractions; excluding McLaren was arbitrary | HHS: Treatment of the Part C issue across groups does not permit a late appeal of an unrevised RNPR component; jurisdiction is decided provider- and issue-by-issue | Held: Court rejected McLaren’s attempt to bootstrap broader review from group consolidation; timing and scope controls prevail |
| Whether the Board should have severed McLaren into an individual appeal addressing the Dual-Eligible/Medicaid fraction issue | McLaren: If excluded from group, Board should have created a separate appeal for McLaren on the Dual-Eligible issue | HHS: Any separate appeal would still be limited to matters revised in the RNPR and McLaren failed to timely appeal the original NPR | Held: Court held severance would not change outcome—any separate appeal would be confined to RNPR revisions; McLaren’s failure to timely appeal the original NPR is dispositive |
Key Cases Cited
- HCA Health Servs. of Okla., Inc. v. Shalala, 27 F.3d 614 (D.C. Cir. 1994) (upheld the Secretary’s issue-specific reopening rule and explained limits on RNPR appeals)
- Azar v. Allina Health Servs., 139 S. Ct. 1804 (2019) (discussed significance of Part C days for Medicare fraction and DSH payments)
- Your Home Visiting Nurse Servs. v. Shalala, 525 U.S. 449 (1999) (reopening authority exists by the Secretary’s regulatory discretion)
- Ne. Hosp. Corp. v. Sebelius, 657 F.3d 1 (D.C. Cir. 2011) (explains Medicare and Medicaid fractions used in DSH calculation)
- Sebelius v. Auburn Reg’l Med. Ctr., 568 U.S. 145 (2013) (describes DSH adjustment purpose and mechanics)
- Little Co. of Mary Hosp. v. Sebelius, 587 F.3d 849 (7th Cir. 2009) (recognizes DSH calculation implicates multiple distinct issues)