MAYER, BROWN & PLATT

SUPREME COURT DOCKET REPORT

1997 Term, Number 18 / June 15, 1998

Today the Court granted certiorari in one case of interest to the business community. Amicus briefs in support of the petitioner are due on July 30, 1998, and amicus briefs in support of the respondent are due on August 31 (because August 29 is a Saturday). Any questions about this case should be directed to Evan Tager (202-778-0618) or Alan Untereiner (202-778-0656) in our Washington office.

Health Care — Reviewability of Medicare Intermediary's Refusal to Reopen Reimbursement Determination. The Medicare Act sets forth a comprehensive scheme for administrative and judicial review of "a final determination [of a fiscal intermediary] as to the amount of total program reimbursement due the provider for the items and services furnished to individuals for which payment may be made under [Medicare] for the period covered by [the provider's cost] report." 42 U.S.C. § 1395oo(a)(1)(A)(i). A provider that is "dissatisfied" with the intermediary's final determination may obtain a hearing before the Provider Reimbursement Review Board (PRRB), which has authority to affirm, modify, or reverse that determination. A determination by the intermediary may be "reopened" within the applicable period upon motion of the provider. 42 C.F.R. § 405.1885(c). The Department of Health and Human Services' interpretive guidelines for this "reopening regulation" specify that "[a] refusal by the intermediary to grant the reopening requested by the provider is not appealable to the [Provider Reimbursement Review] Board, pursuant to 42 C.F.R. § 405.1885(c)." The Court granted certiorari in Your Home Visiting Nurse Services, Inc. v. Shalala, No. 97-1489, to decide whether an intermediary's denial of a Medicare provider's request to reopen is subject to review by the PRRB pursuant to the Medicare statute and, if not, whether the denial is subject to judicial review under 28 U.S.C. § 1331 or 28 U.S.C. § 1361.

Petitioner Your Home Visiting Nurse Services, Inc. provides home health care services to Medicare beneficiaries and is reimbursed on a reasonable cost basis. For its 1989 fiscal year, petitioner submitted cost reports for its home health agencies seeking reimbursement under the Medicare program for, among other things, compensation paid to its owners. In rendering its reimbursement determination, petitioner's fiscal intermediary disallowed a portion of the compensation costs. Subsequently, petitioner requested its intermediary to reopen its final reimbursement determination for 1989, contending that the compensation costs should not have been disallowed. The intermediary denied the request for reopening. Petitioner then took an appeal to the PRRB, which dismissed petitioner's appeal on the ground that it lacked jurisdiction under 42 C.F.R. § 405.1885(c).

Petitioner next filed suit in the United States District Court for the Eastern District of Tennessee requesting that the court order the PRRB to review the intermediary's refusal to reopen. The district court dismissed petitioner's complaint on the ground that the PRRB lacked jurisdiction under 42 U.S.C. § 1395oo. The district court also rejected petitioner's alternative claims that the court itself could review the intermediary's refusal to reopen through the exercise of either general federal question jurisdiction under 28 U.S.C. § 1331 or mandamus jurisdiction under 28 U.S.C. § 1361. A panel of the Sixth Circuit affirmed. 132 F.3d 1135 (1997).

The Sixth Circuit's decision is in accord with the decisions of two other Circuits, see Good Samaritan Hospital Regional Medical Center v. Shalala, 85 F.3d 1057, 1060-1062 (2d Cir. 1996); Athens Community Hospital v. Schweiker, 743 F.2d 1, 4 n.4, 8 (D.C. Cir. 1984), but conflicts with the position of the Ninth Circuit, see Oregon v. Bowen, 854 F.2d 346, 349 (1988). Because of the split, the Solicitor General acquiesced in the request for certiorari.

This case should be of interest to all health care providers that provide services under the Medicare program.

Copyright 1998 Mayer, Brown & Platt. This Mayer, Brown & Platt publication provides information and comments on legal issues and developments of interest to our clients and friends. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.