793 F. Supp. 2d 62
D.D.C.2011Background
- UPMC Mercy sues Kathleen Sebelius in her official capacity seeking review of DHHS’s decision on interest accrual for underpayments to Medicare providers.
- Medicare statute Hurry-Up-and-Pay authorizes interest on underpayments; regulation defines when a 'final determination' triggers interest accrual.
- Blue Cross, as intermediary, recouped over $9.7 million from UPMC in 1991; PRRB later ordered reallocation of expenses in 1998, with no fixed dollar amount identified.
- Blue Cross paid the revised NPR within 30 days; dispute arose whether interest ran from 1998 to 2008 due to the interpretation of 'final determination'.
- Board (PRRB) held that 1998 decision was not a final determination requiring interest accrual; CMS Administrator review followed, and the 2009 Board decision adopted that reasoning.
- District Court grants summary judgment for UPMC, finding the 1991 amendment to the regulation violated the APA's notice-and-comment requirements and remands.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 1991 amendment violated APA notice and comment | UPMC argues amendment changed meaning without notice | Secretary contends amendment was minor stylistic change within interpretative rule exception | Amendment violated APA; remand required |
| Whether the Board’s decision relied on the amended regulation | Board applied the amended (i)(B) to foreclose interest | Board’s reasoning was not clearly tied to the amended text | Board decision arbitrary and remanded due to reliance on amended text |
Key Cases Cited
- In re Medicare Reimbursement Litig., 414 F.3d 7 (D.C. Cir. 2005) (context for intermediary reimbursement and NPR process)
- Stuttering Found. of Am. v. Springer, 498 F. Supp. 2d 203 (D.D.C. 2007) (summary judgment standards for agency actions)
- Am. Bioscience, Inc. v. Thompson, 269 F.3d 1077 (D.C. Cir. 2001) (agency fact-finding and statutory interpretation deference)
- PPG Indus., Inc. v. United States, 52 F.3d 363 (D.C. Cir. 1995) (remand when agency misapplies law)
- SEC v. Chenery Corp., 318 U.S. 80 (1943) (A ground for agency action must be supported by the grounds used by the agency)
- Nat'l Family Planning & Reprod. Health Ass'n, Inc. v. Sullivan, 979 F.2d 227 (D.C. Cir. 1992) (interpretative rule exception narrowly construed; changes must be clear)
- British Caledonian Airways, Ltd. v. Civil Aeronautics Bd., 584 F.2d 982 (D.C. Cir. 1978) (interpretative rule exception and rewriting concerns)
- United States v. Mead Corp., 533 U.S. 218 (S. Ct. 2001) (agency interpretation and deference framework)
- Sentara-Hampton Gen. Hosp. v. Sullivan, 980 F.2d 749 (D.C. Cir. 1992) (interpretative rules and regulatory interpretation standards)
- Am. Mining Cong. v. Mine Safety & Health Admin., 995 F.2d 1106 (D.C. Cir. 1993) (four-factor test for interpretative rule determination)
- Envtl. Def. Fund, Inc. v. EPA, 898 F.2d 183 (D.C. Cir. 1990) (need for reasoned agency explanation)
- Teva Pharm. USA, Inc. v. FDA, 441 F.3d 1 (D.C. Cir. 2006) (need for explanation in agency interpretations)
- Mead Corp. v. United States, 533 U.S. 218 (2001) (interpretive rules and deference standards)