Palomar Medical Center v. Kathleen Sebelius
693 F.3d 1151
9th Cir.2012Background
- Palomar Medical Center received full Medicare payment for IRF services to a hip surgery patient, later found not reasonable and necessary.
- RAC program reopened Palomar’s claim to determine overpayment, leading to a revised determination requiring repayment.
- ALJ upheld no good cause for reopening; MAC reversed, saying RAC reopening decision was not subject to review.
- Regulations provide that reopening decisions are final and not appealable, but revised determinations after reopening are appealable.
- Palomar challenged the Secretary’s interpretation that good-cause for reopening cannot be litigated after a revised determination, seeking judicial review.
- District court granted summary judgment for Secretary; the Ninth Circuit affirmed, holding good cause for reopening cannot be litigated post-revision.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can reopening decisions be challenged on appeal? | Palomar contends good-cause for reopening may be reviewed after revision. | Secretary insists reopening decisions are final and not appealable, even after revisions. | Reopening decisions are final and not appealable; good cause cannot be litigated post-revision. |
| Is the Secretary’s interpretation of § 405.926( l ) and § 405.980(a)(5) entitled to Chevron/APA deference? | Interpretation inconsistent with plain language and prior practice; should be not entitled to deference. | Interpretation reasonable and consistent with regulation language and intent; Chevron deference applies. | Secretary's interpretation controlling; not arbitrary or capricious. |
| Does the Medicare statute permit judicial review of RAC reopenings via § 405(g)? | AP A and statute allow review of agency actions; district court should have jurisdiction. | Statute leaves reopening decisions beyond judicial review; review is unavailable for reopening decisions. | No jurisdiction to review RAC reopening; final decision review limited to MAC decision. |
| Is Palomar entitled to review of the merits of the revised determination separate from the reopening issue? | Even if reopening isn’t reviewable, merits of revised determination should be reviewable. | Merits review occurs for revised determination; reopening merits are not reviewable separate from reopening. | Merits of revised determination may be reviewed; reopening question itself is not litigable. |
Key Cases Cited
- Thomas Jefferson Univ. v. Shalala, 512 U.S. 504 (1994) (deference to agency interpretations of regulations when not plainly erroneous)
- Robert F. Kennedy Med. Ctr. v. Leavitt, 526 F.3d 557 (9th Cir. 2008) (agency interpretation given deference under Chevron/Skidmore framework)
- Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (framework for reviewing statutory/regulatory interpretation)
- Matlock v. Sullivan, 908 F.2d 492 (9th Cir. 1990) (final decision review limitations under § 405(g))
- Califano v. Sanders, 430 U.S. 99 (1977) (agency regulations and review rights; reopening context)
- Loma Linda Univ. Med. Ctr. v. Leavitt, 492 F.3d 1065 (9th Cir. 2007) (final decision concept and review scope under Medicare)
- Shalala v. Illinois Council on Long Term Care, Inc., 529 U.S. 1 (2000) (agency actions and available judicial review under § 405(g))
- Davis v. Schweiker, 665 F.2d 934 (9th Cir. 1982) (finality and reviewability of reopening decisions)
- Your Home Visiting Nurse Servs., Inc. v. Shalala, 525 U.S. 449 (1999) (reviewability of agency decisions without hearing rights)
- Cappadora v. Celebrezze, 356 F.2d 1 (2d Cir. 1966) (SSA reopening decisions and hearings context)