Silence In Notice Of Reopening Supports Dismissal Of Administrative Appeal
LITTLE COMPANY OF MARY HOSPITAL v. SEBELIUS (November 24, 2009)
Little Company of Mary Hospital (the "Hospital") participates in the federal Medicare program. Because it serves a disproportionate number of low-income patients, it is entitled to an adjustment to its payments based on a formula that takes into account both Medicaid patient-days and Supplemental Security Income patient-days. Under the reimbursement scheme, the hospital submits its reports and its assigned Intermediary reviews and issues a Notice of Program Reimbursement (NPR). The NPR is final if not appealed within 180 days. Beyond the direct appeal process, however, an Intermediary can reopen a specific issue within three years, on its own or at a provider's request. The Intermediary then issues a revised NPR. The revised NPR is subject to the same appeal rights, but only with respect to those issues actually reopened. The Hospital did not appeal the NPR issued in September 2000, covering the period ending June 1998. It did, however, request a reopening within three years. It requested a recalculation of both its Medicaid and SSI patient-days. The Intermediary granted the reopening with respect to Medicaid patient-days but did not mention SSI patient-days. When the Intermediary issued its revised NPR with adjusted Medicaid days, the Hospital appealed with respect to both the revised Medicaid days and the refusal to adjust SSI days. After it exhausted its administrative remedies without success, the Hospital filed suit. The court denied the Hospital's requested discovery and granted summary judgment against it. The Hospital appeals.
In their opinion, Judges Posner, Flaum and Rovner affirmed. The Court identified the issue as whether the intermediary reopened the SSI calculation when it reopened the Medicaid calculation. If the SSI calculation was never reopened, it is not subject to appeal. The Hospital argues that the SSI calculation was reopened -- but that the Intermediary simply denied relief. The Court relied on the Intermediary's notice of reopening. The notice of reopening is required by the regulations and here gave the Hospital notice that the Intermediary was reopening the Medicaid calculation. It did not provide notice of a reopening of the SSI calculation. The Court concluded that the silence with respect to the SSI calculation indicated that it was not reopened. With respect to the discovery requests, the Court concluded that the district court did not abuse its discretion. The general rule is that administrative review is confined to the administrative record. The Hospital failed to make its case for an exception.
