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Central Maine Medical Center v. Burwell

United States District Court, D. Maine

September 28, 2016

CENTRAL MAINE MEDICAL CENTER, Plaintiff,
v.
SYLVIA BURWELL, Secretary, U.S. Department of Health and Human Services, Defendant.

          ORDER ON CROSS MOTIONS FOR JUDGMENT ON THE ADMINISTRATIVE RECORD

          Nancy Torresen, United States Chief District Judge.

         Health care provider Central Maine Medical Center (“CMMC”) brought this action against the Secretary of the U.S. Department of Health and Human Services (“the Secretary”) challenging the decision of the Provider Reimbursement Review Board (“PRRB, ” or “the Board”) denying CMMC's request to add new issues to the fiscal year 2007 appeal. Pl.'s Mot. for J. (ECF No. 28). The Secretary filed an opposition and cross motion for judgment on the Administrative Record. Def.'s Opp'n and Cross Mot. For J. (ECF No. 29). For the reasons discussed below, the Secretary's Motion for Judgment on the Administrative Record is GRANTED and the Plaintiff's Motion for Judgment on the Administrative Record is DENIED.

         APPLICABLE STATUTES AND REGULATIONS

         The Medicare program is a federally funded system of health insurance for the aged and disabled.[1] See 42 U.S.C. §§ 1395 et seq. The Secretary is responsibile for administering the Medicare program and is authorized to issue regulations and interpretive rules implementing the statute. See, e.g., 42 U.S.C. §§ 405(a), 1395hh(a), and 1395ii. The Secretary has delegated these responsibilities to the Centers for Medicare & Medicaid Services (“CMS”).[2] In order to obtain Medicare reimbursement, a Part A health care provider like CMMC files an annual cost report with its fiscal intermediary, referred to as the Medicare Administrative Contractor (“MAC”). See MaineGeneral Med. Ctr. v. Shalala, 205 F.3d 493, 496 (1st Cir. 2000); see also 42 C.F.R. § 413.24(f). The MAC then reviews “the cost report and issues a Notice of Provider Reimbursement (NPR), which indicates the reimbursement to which the provider is entitled.” MaineGeneral Med. Ctr., 205 F.3d at 494; see also 42 C.F.R. § 405.1803. When a provider disagrees with the MAC's determination, it files an appeal with the PRRB. 42 U.S.C. § 1395oo; 42 C.F.R. § 405.1835; MaineGeneral Med. Ctr., 205 F.3d at 494.

         The Medicare statute authorizes the PRRB to “make rules and establish procedures . . . which are necessary or appropriate to carry out the provisions” of the statute for the conduct of its appeals. 42 U.S.C. § 1395oo(e); 42 C.F.R. § 405.1868(a) (PRRB has the authority to “make rules and establish procedures. . . to carry out the provisions of [42 U.S.C. § 1395oo] and of the regulations in this subpart”). The Code of Federal Regulations specifically authorizes the PRRB to make rules regarding its “actions in response to the failure of a party to a Board appeal to comply with Board rules.” 42 C.F.R. § 405.1868(a). If the provider fails to meet a requirement established by a Board rule or order, the Board is empowered to: (1) [d]ismiss the appeal with prejudice; (2) [i]ssue an order requiring the provider to show cause why the Board should not dismiss the appeal; or (3) [t]ake any other remedial action it considers appropriate. 42 C.F.R. § 405.1868(b)(1-3).

         The decision of the PRRB becomes the final administrative decision after sixty days unless the Secretary, through the CMS Administrator, elects to review the decision. 42 U.S.C. § 1395oo(f)(1). Providers may seek judicial review of the final decision of the PRRB in a federal district court. 42 U.S.C. § 1395oo(f)(1).

         FACTS

         The following facts are taken from the Administrative Record and CMMC's Complaint and are not disputed by the Secretary.

         CMMC is a provider of medical services to beneficiaries of the federally administered Medicare Program and operates an acute care hospital in Maine. Compl. ¶¶ 2, 5. On July 17, 2013, CMMC received the MAC's reimbursement decision for the fiscal year ending June 30, 2007 (“FY 2007”). A.R. 383. On January 13, 2014, the PRRB received two appeals for CMMC, filed by two different representatives, each challenging a different part of the FY 2007 reimbursement decision. Compl. ¶¶ 13-14. One appeal was filed by Healthcare Reimbursement Systems (“HRS”), which had an issue-specific representation letter from CMMC dated January 25, 2012, authorizing HRS to challenge the “Rural Floor Budget Neutrality Adjustments.” A.R. 321, 323-326, 385, 387. The other appeal, filed by Verrill Dana LLP (“Verrill Dana”), which had a general letter of representation from CMMC dated January 8, 2014, sought review of the MAC's determination of “Medicare Bad Debts.” Supp. A.R. 1.

         On January 16, 2014, the PRRB acknowledged CMMC's two appeals and combined the issues into one case, docketed as Appeal No. 14-1712. A.R. 323. The PRRB informed HRS and Verrill Dana by email that two separate appeals of the FY 2007 decision had been filed for CMMC by two different representatives and that the PRRB considered Verrill Dana to be the authorized representative for CMMC. A.R. 323. Both HRS and Verrill Dana acknowledged receipt of that determination. A.R. 319-321. The PRRB also observed that “[y]ou are responsible for pursuing your appeal in accordance with the Board's Rules.” A.R. 313.

         In a letter to the PRRB dated March 12, 2014, HRS asserted that it was the designated representative and submitted a request to add issues to Appeal No. 14-1712. A.R. 69. The letter enclosed two Model Form Cs; each Model Form C listed three additional issues for the FYE June 30, 2007.[3] A.R. 59, 61. On the second page of each of the Model Form Cs, is a “Certification” page requiring three certifications.

         The certifications were all signed by Phil Morissette, CMMC's Chief Financial Officer.[4] A.R. 60, 62. The Model Form C in a section entitled “Representative Information” asks: “Are you the representative on file for this individual appeal?” The response “No” is selected on both forms. A.R. 59, 61. Directly below the representation question, the Form states: “NOTE: If you are not the representative on file or who established this appeal, then you must attach an authorization letter signed by an official of the provider.” A.R. 59, 61. No authorization letter was attached.

         On the same day, March 12, 2014, CMMC sent a letter to the PRRB with the reference line stating “Appointment of Designated Representative” and “FYE June 30, 2008-2009.” A.R. 204. The letter stated Ms. Corinna Goron of HRS was its designated representative for the fiscal years ending June 30, 2008-2009 for both individual and group appeals. A.R. 204. The letter was on CMMC letterhead and signed by Morissette, but did not reference any case or appeal number. A.R. 204.

         On April 10, 2014, the PRRB denied HRS's request to add new issues because “Board Rule 5.1 indicates ‘there may be only one case representative per appeal' ” and Verrill Dana, not HRS, was the authorized representative for CMMC's Appeal No. 14-1712, for the June 30, 2007, fiscal year. A.R. 54-55. The PRRB explained that the new letter of representation appointing HRS was for FYE June 30, 2008 and 2009, not FYE June 30, 2007-which was the year under appeal. A.R. 54. The letter concluded with a reminder that the “Provider is responsible for adhering to all previously established deadlines per the Board's Acknowledgement and Critical Due Dates Notice dated January 16, 2014.” A.R. 55. The PRRB sent a copy of the denial to HRS and Verrill Dana. A.R. 54.

         On April 30, 2014, HRS requested reconsideration of the PRRB's denial of its request to add new issues in Appeal No. 14-1712. A.R. 51. HRS asserted that it had “been formally designated as the Representative for the Provider with respect to Fiscal Year End June 30, 2007.” A.R. 51. It also argued that if the denial was “influenced by a belief that HRS was attempting to add issues without Verrill Dana's or the Provider's knowledge, ” CMMC had signed the certifications after “it was agreed by all Parties that HRS would take over as the representative of record.” A.R. 51. The request for ...


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