Your Home Visiting Nurse SVC v. Shalala (02/23/1999)

By: Chandra Palermo, Medill News Service

Questions presented

(1) Is regulation 42 C.F.R. sec. 405.1885(c) based on a permissible construction of the Medicare statute? (2) Is there jurisdiction for review of a refusal to reopen a Medicare provider's cost report under federal statutes?

Brief

Your Home Visiting Nurse Inc. is reimbursed by Medicare for the home nursing services it provides for Medicare beneficiaries. Blue Cross and Blue Shield of South Carolina, as its government-appointed intermediary, determines the amount of Your Home's annual reimbursements based on cost reports Your Home provides.

Your Home requested that Blue Cross and Blue Shield reopen the cost reports submitted for 1989, claiming that ""new and material"" evidence showed that the reports should be modified.

When Blue Cross denied its request, Your Home appealed the decision to the Provider Reimbursement Review Board. Based on the regulations set forth in the Provider Reimbursement Manual, the board found that it lacked jurisdiction to review the intermediary's decision.

Your Home does have the right to request that a previous year's funding decision be reopened for up to three years after the decision if ""new and material evidence has been submitted, or a clear and obvious error was made, or the determination is found to be inconsistent with the law, regulations and rulings, or general instructions.""

Medicaid statute regulations specify, however, that ""jurisdiction for reopening a determination or decision rests exclusively with that administrative body that rendered the last determination or decision.""

New determinations after reopening are subject to the same review as the original decisions. Your Home can appeal original reimbursement decisions and new decisions made after a reopening to the Provider Reimbursement Review Board within 180 days after the decision and can appeal the board's decision to a federal court within 60 days of that decision.

But a refusal to reopen is not subject to the same review. The Provider Reimbursement Manual states that ""A refusal by the intermediary to grant a reopening requested by the provider is not appealable to the Board.""

Your Home appealed the board's claim of lack of jurisdiction to a district court, which dismissed the complaint. The court upheld the board's decision and further found that the court itself did not have federal question or mandamus jurisdiction to review the intermediary's decision.

The 6th Circuit Court of Appeals affirmed, finding that neither the board nor the district court has jurisdiction to review the intermediary's refusal to reopen the cost report.

Your Home argued that it is inappropriate to rely on the Secretary of the U.S. Department of Health and Human Services' interpretation of the regulations, which is presented in the reimbursement manual, because it is contrary to the plain meaning of the statute. Denial of a reopening is a ""final determination,"" which is subject to an appeal, Your Home claimed. It also argued that federal courts have jurisdiction to review administrative decisions.

The appeals court held that federal courts do not necessarily have jurisdiction to review administrative proceedings not required by statute, like the reopening of the funding decision. The regulations provide adequate opportunities for judicial review within the time limits set forth in the manual, the court explained. By allowing requests for reopening, according to the court, the regulations expand providers' protection and opportunities for administrative review beyond statutory requirements, but without additional expense of full administrative review and judicial review of refusals.

Although the administrative rules say that request refusals cannot be appealed, the 9th Circuit has found the rules are not in keeping with the Medicare statute. The 6th, 2nd and D.C. circuits have ruled they are. The U.S. Supreme Court granted certiorari June 15, 1998 to clear up the inconsistency.

On Feb. 23, 1999, the Court affirmed. In a unanimous opinion written by Justice Antonin Scalia, the Court held that the board does not have jurisdiction to review a fiscal intermediary's refusal to reopen a reimbursement determination.