Los Angeles Haven Hospice, Inc. v. Sebelius
2011 U.S. App. LEXIS 5017
| 9th Cir. | 2011Background
- Medicare provides hospice benefits; cap on annual reimbursements applies per provider.
- Haven Hospice challenged the hospice cap regulation, alleging it misallocates cap room across years.
- HHS regulation 42 C.F.R. § 418.309 accounts for cap via a 35-day shift and year-based counting.
- Haven appealed overpayment for FY 2006; PRRB found jurisdiction but no authority on facial validity.
- District court found regulation invalid and issued a nationwide injunction barring enforcement.
- Secretary appealed, seeking to limit relief and uphold regulation's validity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge regulation | Haven has concrete injury from an invalid regulation. | Haven lacks injury-in-fact and redressability for broader relief. | Haven has Article III standing to pursue declaratory and injunctive relief. |
| Regulation's compliance with statute | Statute requires proportional allocation per individual across years. | Regulation reasonable interpretation of 'reflect' and 'proportion'. | Regulation facially invalid; conflicts with statute at Chevron step one. |
| Judicial jurisdiction for injunction scope | District court may enjoin enforcement of invalid regulation nationwide. | Jurisdiction should be limited to Haven and the FY 2006 issue. | Court had authority to enjoin Haven; nationwide injunction was overly broad. |
| Discretionary scope of injunction | Full relief requires nationwide prohibition until proper regulation issued. | Broad nationwide relief would disrupt Medicare; jurisdiction limited. | Nationwide injunction vacated; remanded for narrower relief limited to complete Haven relief. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (standing requires concrete, particularized injury and redressability)
- Bethesda Hosp. Ass'n v. Bowen, 485 U.S. 399 (1988) (regulations cannot be invalidated by agencies; direct judicial review remains available)
- Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (two-step test for agency interpretations; step one looks at statutory text)
- Shalala v. Illinois Council on Long Term Care, 529 U.S. 1 (2000) (special Medicare review procedures and facial challenges considerations)
- Aluminum Co. of America v. Bonneville Power Admin., 903 F.2d 585 (9th Cir.1989) (standing allows challenge where regulation causes concrete harm despite offsets)