56 F.4th 9
2d Cir.2022Background
- Yale New Haven Hospital (YNHH) acquired Hospital of Saint Raphael (St. Raphael) in 2012; both historically reported uncompensated-care data under separate HHS certification numbers before the merger.
- The ACA (effective FFY 2014) revised the DSH payment formula to include an HHS “estimate” of each hospital’s amount of uncompensated care (Factor Three); 42 U.S.C. § 1395ww(r)(3)(A) states there shall be no administrative or judicial review of “any estimate of the Secretary.”
- HHS’s 2014 Final Rule calculated Factor Three using the surviving hospital’s certification number and excluded data associated with subsumed certification numbers (i.e., St. Raphael’s data was excluded from YNHH’s FFY 2014 estimate).
- YNHH challenged the exclusion as procedurally unlawful (failure to follow APA notice-and-comment rulemaking and Medicare Act rulemaking requirements); the district court denied dismissal under § 1395ww(r)(3) and granted summary judgment for YNHH, remanding without vacatur.
- The Secretary appealed, arguing § 1395ww(r)(3) bars review of any challenge to the Secretary’s estimates (procedural or substantive); YNHH alternatively asserted an ultra vires (Leedom v. Kyne) exception to review-preclusion.
- The Second Circuit reversed the district court: it held § 1395ww(r)(3) plainly precludes judicial review of both substantive and procedural challenges to the Secretary’s estimates and that the Kyne ultra-vires doctrine does not apply where Congress has expressly precluded review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 1395ww(r)(3) bars judicial review of YNHH’s procedural APA challenge | YNHH: § 1395ww(r)(3) bars review of substantive estimates but not rulemaking procedures that produced them; procedural claims remain reviewable. | Secretary: § 1395ww(r)(3) bars review of “any estimate of the Secretary,” which by statute includes selection/use of data; procedural or substantive framing does not save the claim. | Held: § 1395ww(r)(3) precludes judicial review of both procedural and substantive challenges to the Secretary’s estimates. |
| Whether the Secretary’s choice of data (excluding St. Raphael) is part of the protected “estimate” | YNHH: data-selection is antecedent to the estimate and distinct from the estimate itself. | Secretary: statute defines the “estimate” to include the Secretary’s determination of appropriate data and use of alternatives; data choice is part of the estimate. | Held: the statutory definition makes data selection integral to the “estimate,” so challenges to data choice are challenges to the estimate. |
| Applicability of the Leedom v. Kyne (ultra vires) exception | YNHH: even if § 1395ww(r)(3) precludes review, Kyne permits review when agency action is ultra vires. | Secretary: Kyne applies only where preclusion is implied, not where Congress expressly precludes review. | Held: Kyne inapplicable because § 1395ww(r)(3) is an express bar to review; ultra vires exception fails. |
| Appropriate remedy (vacatur vs remand) of district court’s APA ruling | YNHH: sought vacatur of the 2014 calculation/policy. | Secretary: (on appeal) jurisdictional bar makes remedy question moot; district court’s remand without vacatur inappropriate if no jurisdiction. | Held: Court reversed jurisdictional ruling, vacated district-court summary judgment, remanded with instruction to dismiss for lack of subject-matter jurisdiction; YNHH’s cross-appeal on remedy dismissed as moot. |
Key Cases Cited
- Leedom v. Kyne, 358 U.S. 184 (1958) (establishes narrow ultra vires exception to review preclusion)
- Knapp Med. Ctr. v. Hargan, 875 F.3d 1125 (D.C. Cir. 2017) (discusses scope of review-preclusion language in Medicare Act)
- Amgen, Inc. v. Smith, 357 F.3d 103 (D.C. Cir. 2004) (rule that if a no-review provision shields a type of administrative action, courts may not probe procedural or substantive defects)
- Kucana v. Holder, 558 U.S. 233 (2010) (explains presumption of judicial review applies only if ambiguity remains after statutory construction)
- DCH Reg'l Med. Ctr. v. Azar, 925 F.3d 503 (D.C. Cir. 2019) (holds challenges to data-selection for estimates are challenges to the estimates themselves)
- Fla. Health Scis. Ctr. v. Sec'y of HHS, 830 F.3d 515 (D.C. Cir. 2016) (interprets § 1395ww(r)(3) as precluding review of Secretary’s choice of data)
- Michigan Academy of Family Physicians v. Bowen, 476 U.S. 667 (1986) (discusses presumption favoring judicial review of agency action)