Justia U.S. D.C. Circuit Court of Appeals Opinion Summaries

Articles Posted in Health Law
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The DC Circuit affirmed the district court's partial grant of summary judgment to HHS. Determining that the appeal was not moot, the court held that the district court correctly declined to grant plaintiff equitable relief. The court held that, after properly channeling a single claim for "medical and other health services" benefits, a Medicare beneficiary can not obtain prospective equitable relief mandating that HHS recognize his treatment as a covered Medicare benefit in all future claim determinations. In this case, plaintiff's real problem was with Novitas and, to the extent he wanted the Secretary to instruct Novitas to cover his treatments, he could not do so through the claim appeal process. View "Porzecanski v. Azar" on Justia Law

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A group of children's hospitals that receive Disproportionate Share Hospital (DSH) payments under the Medicaid Act filed suit challenging the Secretary's promulgation of a regulation defining "costs incurred" in furnishing hospital services to low income patients (the 2017 Rule). The DC Circuit reversed the district court's decision vacating the 2017 Rule and reinstated it, holding that the rule did not exceed the Secretary's statutory authority under the Medicaid Act and rejecting plaintiffs' reasons for why the statute did not grant the Secretary authority to require that payments by Medicare and private insurers be considered in calculating a hospital's "costs incurred;" the 2017 Rule is consistent with the statute's context and purpose, both of which suggest DSH payments are meant to assist those hospitals that need them most by covering only those costs for which DSH hospitals are in fact uncompensated; and the 2017 Rule was not a product of arbitrary and capricious reasoning. View "Children's Hospital Association of Texas v. Azar" on Justia Law

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ACLA filed suit alleging that the Secretary's final ruling implementing the Protecting Access to Medicare Act's (PAMA) definition of "applicable laboratory" unlawfully excluded most hospital laboratories from PAMA's reporting requirements. The district court dismissed the complaint for lack of subject matter jurisdiction. As a preliminary matter, the DC Circuit held that ACLA had standing. In view of PAMA's text, its structure, and the distinct nature of the processes of data collection and establishment of payment rates, the court could not conclude that the bar against reviewing the "establishment of payment amounts" also prevents its review of the rule setting up a new and detailed process for collecting data on market rates that private insurers pay to laboratories. Because the statute is "reasonably susceptible" to this interpretation, the court held that it does not bar judicial review of the Secretary's rule establishing the parameters of data collection under 42 U.S.C. 1395m-1(a). Finally, the court rejected ACLA's claim that the Secretary's rule was ultra vires. Accordingly, the court reversed the district court's holding on subject matter jurisdiction and remanded for further proceedings. View "American Clinical Laboratory Assoc. v. Azar" on Justia Law

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The Medicare statute precludes judicial review of estimates used to make certain payments to hospitals for treating low-income patients. At issue was whether this preclusion provision barred challenges to the methodology used to make the estimates. The DC Circuit held that it could not review the Secretary's method of estimation without also reviewing the estimate. Therefore, the two were inextricably intertwined and 42 U.S.C. 1395ww(r)(3)(A) precludes review of both. The court held that Florida Health Sciences Center, Inc. v. Secretary of HHS, 830 F.3d 515 (D.C. Cir. 2016), -- not ParkView Medical Associates v. Shalala, 158 F.3d 146 (D.C. Cir. 1998) -- was controlling in this case. In Florida Health, the court held that section 1395ww(r)(3) barred review because the plaintiff was simply trying to undo the Secretary's estimate of the hospital's uncompensated care by recasting its challenge to the Secretary's choice of data as an attack on the general rules leading to her estimate. Here, DCH was simply trying to undo the Secretary's estimate of its uncompensated care by recasting its challenge to that estimate as an attack on the underlying methodology. View "DCH Regional Medical Center v. Azar" on Justia Law

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Hospitals challenged the methodology that the Department used to calculate the "outlier payment" component of their Medicare reimbursements for 2008, 2009, 2010, and 2011. At issue was whether the Department's decision to continue with its methodology after the 2007 fiscal year was arbitrary in light of accumulating data about the methodology's generally sub-par performance. The DC Circuit held in Banner Health v. Price, 867 F.3d 1323 (D.C. Cir. 2017) (per curiam), that the Department's decision to wait a bit longer before reevaluating its complex predictive model was reasonable, because the Department had, at best, only limited additional data for 2008 and 2009 and because the 2009 data suggested that hospitals were paid more than expected. In this appeal, the court held that Banner Health foreclosed the hospitals' challenges to the Department's failure to publish a proposed draft rule during the 2003 rulemaking process and the Department's failure to account for the possibility of reconciliation claw-backs in setting the 2008, 2009, 2010, and 2011 thresholds. Finally, the court held that, while the hospitals' frustration with the Department's frequently off-target calculations was understandable, the methodology had not sunk to the level of arbitrary or capricious agency action. View "Billings Clinic v. Azar" on Justia Law

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This case involved the "340B Program," which allowed certain hospitals to purchase outpatient drugs from manufacturers at or below specified prices. Plaintiffs filed suit challenging a regulation that sets the Outpatient Prospective Payment System (OPPS) reimbursement drugs purchased through the 340B Progam for 2018. The district court held that plaintiffs failed to present claims for reimbursement to the Secretary, as required to obtain judicial review of claims under Medicare, and thus dismissed the complaint for lack of subject matter jurisdiction. The DC Circuit held that plaintiffs neither presented their claim nor obtained any administrative decision at all, much less the "final decision" required under 42 U.S.C. 405(g). In this case, when plaintiffs filed this action, neither the hospital plaintiffs, nor any members of the hospital-association plaintiffs, had challenged the new reimbursement regulation in the context of a specific administrative claim for payment. They could not have done so because the new regulation had not yet even become effective. Therefore, plaintiffs failed to satisfy the presentment requirement of section 405(g), and the district court properly dismissed this case for lack of subject matter jurisdiction. View "American Hospital Ass'n v. Azar" on Justia Law

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The DC Circuit held that 42 C.F.R. 405.1885 does not apply to appeals from a fiscal intermediary to the Provider Reimbursement Review Board. Therefore, the court had no occasion to address whether the 2013 amendments to the reopening regulation were arbitrary and capricious or whether applying the amendments to proceedings pending on their effective date would be impermissibly retroactive. Accordingly, the court reversed and remanded for further proceedings. View "Saint Francis Medical Center v. Azar" on Justia Law

Posted in: Health Law
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The DC Circuit affirmed the district court's dismissal based on lack of subject matter jurisdiction of CMS's decision declining to hear Mercy Hospital's challenge to its reimbursement rate for fiscal years 2002 through 2004. The Administrator interpreted a statutory provision that precluded administrative and judicial review of the reimbursement rate to also preclude review of the underlying formula that helped determine that rate. The court concluded from the Medicare statute's plain language in 42 U.S.C. 1395ww(j) that "prospective payment rates" means step-two rates. The court held that the preclusion paragraph barred review of step-two rates and the statutory adjustments. View "Mercy Hospital, Inc. v. Azar" on Justia Law

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The DC Circuit reversed the district court's grant of summary judgment in favor of Clarian in an action challenging the legality of HHS's decision to set forth certain policies regarding the means of calculating reimbursements for Medicare providers in an instruction manual without engaging in notice and comment rulemaking. The court held that the Manual instructions embodied a general statement of policy, not a legislative rule, setting forth HHS's enforcement priorities; policy statements did not establish binding norms; they were not "rules" that must be issued through notice and comment rulemaking; nor were the instructions subject to the Medicare Act's independent notice and comment requirement because they did not establish or change a substantive legal standard. Therefore, neither the Administrative Procedure Act nor the Medicare Act required that the Manual instructions be established by regulation. View "Clarian Health West, LLC v. Hargan" on Justia Law

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The district court granted Dana-Farber partial summary judgment, agreeing that Dana-Farber was entitled to full reimbursement of Medicare's share of a tax paid and vacating the Board's decision. At issue was the Board's interpretation of two regulations expounding upon the statutory directive to reimburse only reasonable costs actually incurred. The DC Circuit reversed the district court's judgment, holding that the Board's interpretation was reasonable and Dana-Farber failed to show otherwise — much less that the interpretation violated the Administrative Procedure Act — and thus the court appropriately deferred to it. View "Dana Farber Cancer Institute v. Hargan" on Justia Law