Respondents Brief — Your Home Visiting Nurse Services, Inc. v. Shalala

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Text

No. 97-1489

In the Supreme Court of the United States

OCTOBER TERM, 1997

Your HOME VISITING NURSE SERVICES, INC.,

PETITIONER

DONNA E. SHALALA, SECRETARY OF

HEALTH AND HUMAN SERVICES

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE RESPONDENT

SETH P. WAXMAN

Solicitor General

Counsel of Record

FRANK W. HUNGER

Assistant Attorney General

ANTHONY J. STEINMEYER

JOHN P. SCHNITKER

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTIONS PRESENTED

1. Whether the denial of a Medicare provider's re-

quest to reopen an annual reimbursement determina-

tion under Part A of the Medicare program is subject

to review under 42 U.S.C. 139500, and if not, whether

the denial is subject to judicial review under 28

U.S.C. 1331 or 28 U.S.C. 1361.

2. Whether the government’s position is “substan-

tially justified” under the Equal Access to Justice

Act, 5 U.S.C. 504 and 28 U.S.C. 2412.

TABLE OF CONTENTS

Page

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TABLE OF AUTHORITIES

Cases:

Abbey v. Sullivan, 978 F.2d 37 (2d Cir. 1992) ........ 12

Athens Community Hosp. v. Schweiker, 743 F 2d

3 c 13

Auer v. Robbins, 117 S. Ct. 905 (1997) . 15

Bethesda Hosp. Ass'n v. Bowen, 485 U.S. 399

1 ˙ —A( R n m eee; 3

Bowen v. Michigan Academy of Family

Physicians, 476 U.S. 667 (1986) . . 11

Califano v. Sanders, 430 U.S. 99 (1977) 7, 10, 11, 15

Chevron U.S.A. Inc. v. Natural Resources

Defense Council, Inc., 467 U.S. 837 (1984) ............ s

Citizens Bank of Maryland v. Strumpf, 516 U.S.

%% ⁰¹ 1e 15

Farkas v. Blue Cross & Blue Shield of Mich.,

LL 12

French Hosp. Med. Ctr. v. Shalala, 89 F.3d 1411

r US Oa eee ne 14

Good Samaritan Hosp. v. Shalala, 508 U.S. 402

ee eee 8, 14

Good Samaritan Hosp. Reg. Med. Ctr.

v. Shalala:

894 F. Supp. 683 (S.D.N.Y. 1995) . 90

85 F. Ad 1067 (2d Cir. 1998) . 9, 13

HCA Health Servs. of Okla., Inc. v.

Shalala, 27 F.3d 614 (D.C. Cir. 1994) . 9, 13

(III)

Cases Continued: Page

Heckler v. Ringer, 466 U.S. 602 (19840) 11, 12

Hennepin County Med. Ctr. v. Shalala, 81 F.3d

rr 14. 15

Memorial Hosp. v. Sullivan, 779 F. Supp. 1410

. . 15

National Kidney Patients Ass'n v. Sullivan,

958 F.2d 1127 (D.C. Cir. 1992), cert. denied, 506

[RR ET EE ine Seen 12

Pierce v. Underwood, 487 U.S. 552 (1988) 17

Regions Hosp. v. Shalala, 118 S. Ct. 909

—— AAA ͤ——— ——— etal teie as 2, 4, 8, 9

St. Mary of Nazareth Hosp. Ctr. v. Schweiker,

741 F.2d 1447 (D.C. Cir. 1984) ...........ccccccoccccceceeseee 13

St. Vincent Health Ctr. v. Shalala, 937 F. Supp.

496 (W.D. Pa. 1995), aff d. 96 F.3d 1434 (3d Cir.

— — ́——ů⁴ ter tt 16

State of Oregon v. Bowen, 854 F. 2d 346 (9th Cir.

—— ——ů ů ů «᷑VCñ wN 13. 14

Thomas Jefferson Univ. v. Shalala, 512 U.S.

. . 8

Weinberger v. Salfi, 422 U.S. 749 (1975) ................ 11

Youakim v. Miller, 425 U.S. 231 (1976) ................. 15

Statutes and regulations:

Administrative Procedure Act, 5 U.S.C. 700 15

Equal Access to Justice Act:

6c 16

c 16

Omnibus Budget Reconcilliation Act of 1986,

Pub. L. No. 99-509, § 9341(a)(1)(B), 100

1 — c j— x x iat aai 12

Social Security Act, 42 U.S.C. 201 et seq.:

Tit. II. 42 U.S.C. 301 et eg.

L 3

52058), 42 U.S.C. 405% 3, 7, 10

§ 205(h), 42 U.S.C. 405 h) 4, 5, 7, 10, 11, 12

Statutes and regulations—Continued: Page

Tit. XVIII. 42 U.S.C. 1395 et seg. (Medicare

Act) 2

42 U.S.C. 1395f(b)(1) ..... 2

42 U.S.C. 1395f(b)(1)(A) ....... 5

eee 2. 14

9 2

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42 U.S.C. 18 (NIK) 2

42 U.S.C. 1890( WIA CGͤꝗ)]Ʒ. 14

J ea 3, 12

42 U.S.C. N s 11

42 U.S.C. 1395ff(b) (1982) . 11

. 9

...... 4. 10

err 9, 11, 17

42 U.S. C. 139500(a) ................ 6, 7, 8, 9, 10, 13, 15

42 U.S.C. 139500(a)( 1M ADI) «00.2000. ceeeeeeee 3, 8, 14

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e 3. 4

128 6, 7, 10, 11, 12, 15, 17

4 — 6, 7, 12, 15, 17

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42 C. F. R.:

Pt. 405:

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STEERER EEE „„ „„ „„ „ eee!

Section 413. 200b)

Section 413.24(f)

Section 413.102(a)

Miscellaneous:

Provider Reimbursement Manual (1993)

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In the Supreme Court of the United States

OcTOBER TERM, 1997

No. 97-1489

Your HoME VISITING NURSE SERVICES, INC.,

PETITIONER

DONNA E. SHALALA, SECRETARY OF

HEALTH AND HUMAN SERVICES

ON PETITION FOR A WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

BRIEF FOR THE RESPONDENT

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1-15)

is reported at 132 F.3d 1135. The opinion of the dis-

trict court (Pet. App. 17-33) is unreported. The deci-

sion of the Provider Reimbursement Review Board

(Pet. App. 34 5) is unreported.

JURISDICTION

The judgment of the court of appeals (Pet. App. 38-

39) was entered on December 22, 1997. The petition

for a writ of certiorari was filed on March 11, 1998.

The jurisdiction of this Court is invoked under 28

U.S.C. 1254(1).

(1)

STATEMENT

1. In Title XVIII of the Social Security Act, Con-

gress established the federally funded Medicare pro-

gram to provide health insurance to the elderly and

disabled. 42 U.S.C. 1395 et seg. Part A of the program

provides insurance for covered inpatient hospital and

related post-hospital services including certain home

health services that are provided to an individual on a

visiting basis in the individual’s place of residence. 42

U.S.C. 1395x(m).' When patient beneficiaries receive

covered home health services, the Secretary reim-

burses the providers of those services under the

Medicare Act and the Secretary’s implementing regu-

lations. 42 U.S.C. 1395f(b)(1), 1895x(v)(1)(A).

A provider’s total allowable Medicare payment is

based on a “cost report” that it must prepare after the

close of its fiscal year. 42 U.S.C. 1395g; 42 C. F. R.

405.1801(b), 413.24(f). The cost report is filed with a

“fiscal intermediary” (usually an insurance company)

designated by the Secretary. 42 U.S.C. 1395h. The

cost report shows the provider’s costs and the per-

centage of those costs allocated to Medicare services.

42 C. F. R. 413.20(b), 413.24(f). The intermediary ana-

lyzes the cost report, audits it if necessary, and is-

sues the provider a written “notice of amount of

program reimbursement” (NPR) containing the final

determination of the total amount to be paid for

Medicare services during the reporting period. 42

C. F. R. 405.1808. See Regions Hosp. v. Shalala, 118 8.

Ct. 909, 913 (1998).

Part B is a voluntary supplementary insurance program

covering physicians’ charges and other medical services. 42

U.S.C. 1395k, 1395/1, 1395x(s). This case arises under the Part

A program.

Congress has specified in the Medicare Act itself a

comprehensive scheme for administrative and judicial

review of “a final determination [of a fiscal intermedi-

ary] 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. 139500(a1A)i).” A dis-

satisfied” provider may obtain a hearing before the

Provider Reimbursement Review Board (PRRB) if

the amount in controversy equals or exceeds $10,000

and the provider requests a hearing “within 180 days

after notice of the intermediary’s determination.” 42

U.S.C. 139500(a)(1)(A)(i) and (a)(3); 42 C.F.R. 405.1835;

see Bethesda Hosp. Ass'n v. Bowen, 485 U.S. 399, 403-

404 (1988). The Board has the authority to “affirm,

modify, or reverse a final determination of the fiscal

intermediary with respect to [the] cost report and to

make any other revisions on matters covered by such

cost report * * * even though such matters were not

considered by the intermediary in making [its] final

determination.” 42 U.S.C. 139500(d). The Board’s

decision, unless modified by the Secretary, is final,

and is subject to judicial review in federal district

court if an action is brought within 60 days. 42 U.S.C.

139500(f)(1 ); 42 C. F. R. 405.1877.

By regu tion, a determination by the intermediary

may be “reopened” within three years (or at any time

in the case of fraud) with respect to specific findings

Congress also has established administrative and judicial

review procedures for individuals who are denied Medicare

benefits under Part A or B of the Medicare program. See 42

U.S.C. 1395ff (incorporating procedures under 42 U.S.C. 405(b)

and (g)).

at issue in the intermediary’s determination, by mo-

tion of either the intermediary or the provider af-

fected by the intermediary’s determination. 42 C.F.R.

405.1885(a) and (d); see Regions Hosp., 118 S. Ct. at

913.“ The Secretary’s reopening regulation also pro-

vides that “[jjurisdiction for reopening a determina-

tion or decision rests exclusively with that adminis-

trative body that rendered the last determination or

decision.” 42 C.F.R. 405.1885(c). The Secretary’s

Provider Reimbursement Manual (PRM) further ex-

plains that Ja] provider has no right to a hearing on a

finding by an intermediary * * * that a reopening

* * of a determination is not warranted.”

PRM S 2932.1. The PRM similarly states that Ja]

refusal by the intermediary to grant a reopening

requested by the provider is not appealable to the

Board, pursuant to 42 C.F.R. § 405.1885(c).” PRM

§ 2926, App. A, J B.4. In the event the intermediary

does reopen the prior determination, however, a pro-

vider may appeal to the Board any adjustments made

by the intermediary in a revised NPR. 42 C.F.R.

405.1889. The Board’s decision concerning the re-

vised NPR would then be subject to judicial review

under 42 U.S.C. 139500(f)(1).

Finally, the second and third sentences of Section

205(h) of Title II of the Social Security Act, made

applicable to the Medicare Act by 42 U.S.C. 1395ii,

provide:

No findings of fact or decision of the [Secretary]

shall be reviewed by any person, tribunal, or gov-

ernmental agency except as herein providec. No

The regulation also authorizes the Board and the Secre-

tary to reopen one of their respective decisions. 42 C.F.R.

405.1885(a).

action against the United States, the [Secretary],

or any officer or employee thereof shall be brought

under section 1331 or 1346 of title 28 to recover on

any claim arising under this subchapter.

42 U.S.C. 405(h).

2. Petitioner provides home health care services

to Medicare beneficiaries and is reimbursed on a

reasonable cost basis. Pet. App. 2; see 42 U.S.C.

1395f(b)(1)(A). For its 1989 fiscal year, petitioner sub-

mitted four cost reports for its home health agencies.

The reports sought payment for certain compensation

to its owners as an allowable cost reimbursable under

the Medicare program. See 42 C.F.R. 413.102(a). On

March 29, 1991, petitioner’s fiscal intermediary is-

sued four NPRs that disallowed a portion of those

costs and determined the total amount of program

reimbursement due to petitioners. Admin. Rec. 15-33.

The NPRs also notified petitioner of its statutory

right to seek review of the intermediary’s determina-

tion before the PRRB within 180 days. Id. at 17, 20,

23, 26. Petitioner did not appeal any of the four NPRs

to the PRRB within the time period specified by 42

U.S.C. 139500(a)(3). Pet. 23; Pet. App. 3.

On March 28, 1994, less than three years from the

date of the issuance of the NPRs for petitioner’s fis-

cal year 1989, petitioner requested its intermediary

to reopen its final reimbursement determination for

1989 under the Secretary’s reopening regulation.

Admin. Rec. 12-14. Petitioner claimed that the in-

termediary improperly disallowed a portion of the

owners’ compensation costs for which petitioner

sought reimbursement, because the intermediary

failed to compare petitioner’s costs to salary data for

officers of home health agency chains. Jbid. The

intermediary denied the request for reopening. Pet.

App. 36-37. On October 14, 1994, petitioner sought

to appeal the intermediary’s denial to the PRRB.

Admin. Rec. 7-8. On January 10, 1995, the PRRB dis-

missed petitioner’s appeal on the ground that it lacked

jurisdiction under 42 C.F.R. 405.1885(c). Pet. App. 34-

35. The PRRB concluded that, because “the Inter-

mediary was the administrative body that rendered

the last determination [on petitioner's reimburse-

ment], it is the Intermediary’s decision whether or

not to reopen the cost report.” Id. at 35.

3. Petitioner 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 its final deter-

mination for petitioner’s 1989 fiscal year or, in the

alternative, that the court order the intermediary to

reopen petitioner’s NPR to make additional payments

for the claimed costs regarding owners’ compen-

sation. Compl. 6-7. The district court dismissed peti-

tioner’s complaint on the ground that the PRRB does

not have jurisdiction under 42 U.S.C. 139500(a) over

an intermediary’s refusal to reopen a provider’s NPR.

Pet. App. 16-33. The court reasoned that “the Secre-

tary’s determination as reflected in the Medicare

regulations and Provider Reimbursement Manual

that denials of reopening requests are unreviewable

is a reasonable interpretation of the Medicare stat-

ute.” Jd. at 26. The court also rejected petitioner’s

alternative claim that the court 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. Pet. App. 30-32.

4. The court of appeals affirmed. Pet. App. 1-15. It

concluded that the language in 42 U.S.C. 139500(a)

that identifies what triggers a right of review by the

Board—“a final determination * of the interme-

diary * * * as to the amount of total program reim-

bursement due the provider“ — does not clearly en-

compass an intermediary’s denial of a request to re-

open a prior determination, and that the Secretary’s

reopening regulation and interpretive guidelines re-

flect the reasonable interpretation that the statute

does not grant the PRRB jurisdiction over an inter-

mediary’s denial of a request to reopen. Pet. App. 4-7.

The court also found its conclusion “bolstered” by

Califano v. Sanders, 430 U.S. 99, 108 (1977), in which

the Court concluded that the Social Security Act, 42

U.S.C. 405(g), does not authorize federal courts to re-

view alleged abuses in agency discretion in refusing

to reopen Social Security disability claims. Pet. App.

7-8.

The court of appeals further concluded that 42

U.S.C. 405(h) precludes a district court from exercis-

ing its general federal question jurisdiction under 28

U.S.C. 1331 to review an intermediary’s denial of a

request to reopen, because petitioner’s claims for

additional reimbursement arise under the Medicare

Act. Pet. App. 11-12. Finally, reasoning that a fiscal

intermediary’s “decision not to reopen [i]s discretion-

ary,” the court of appeals rejected petitioner’s conten-

tion that the intermediary’s denial of reopening is

reviewable pursuant to the district court’s mandamus

jurisdiction under 28 U.S.C. 1361. Pet. App. 14-15.

ARGUMENT

The court of appeals correctly concluded that

neither the Provider Reimbursement Review Board

nor the federal courts have jurisdiction to review the

merits of a fiscal intermediary’s denial of a provider’s

request to reopen a final Medicare reimbursement

determination. We nevertheless agree with peti-

tioner that the Court should grant certiorari in this

case. The courts of appeals are divided on the ques-

tion whether the Secretary reasonably construed 42

U.S.C. 139500(a) not to require the PRRB to review

an intermediary’s denial of a request to reopen, and

the question whether such a denial is reviewable is of

considerable importance to the administration of the

Medicare program.

I. a. The court of appeals properly applied the two-

step analysis of this Court’s decision in Chevron

U.S.A. Inc. v. Natural Resources Defense Council,

Inc., 467 U.S. 837, 842, 843 (1984), in sustaining the

Secretary’s interpretation of the relevant provision of

the Medicare Act. See also Regions Hosp., 118 S. Ct.

at 915; Thomas Jefferson Univ. v. Shalala, 512 U.S.

504, 512 (1994); Good Samaritan Hosp. v. Shalala, 508

U.S. 402, 414 (1993). Section 139500(a)(1)(A)G) author-

izes the Board to review a fiscal intermediary’s “final

determination * * * as to the amount of total pro-

gram reimbursement due the provider * * * for the

period covered by [the provider’s cost] report.” That

language plainly refers to the fiscal intermediary’s

issuance of the NPR reflecting the total reimburse-

ment due the provider for that fiscal year. It does not

readily encompass, however, a denial by the inter-

mediary of a request to alter a prior determination as

to whether particular cost items are reimbursable.

As the court below explained:

[The plain meaning of [Section] 139500(a) does not

compel a holding that a reopening denial is a “final

determination” of the amount of total program

reimbursement. To the contrary, * * * the

statute may be construed permissibly as stating

that a reopening denial is a refusal to revisit the

final determination. [While . a decision

not to reopen is in some sense “final,” it does not,

in and of itself, establish an amount of total pro-

gram reimbursement [as required by the statute].

Pet. App. 6-7 (quoting Good Samaritan Hosp. Reg.

Med. Ctr. v. Shalala, 85 F.3d 1057, 1061-1062 (2d Cir.

1996), quoting Good Samaritan Hosp. Reg. Med. Ctr.

v. Shalala, 894 F. Supp. 683, 690 (S.D.N.Y. 1995)).

Moreover, reopening is not mandated by Act but is

instead authorized solely by the Secretary’s re-

opening regulation. HCA Health Servs. of Okla-

homa, Inc. v. Shalala, 27 F.3d 614, 618-619 (D.C. Cir.

1994) (Secretary promulgated reopening rules under

her general rulemaking authority under 42 U.S.C.

1302 and 1395hh); see also Regions Hosp., 118 S. Ct. at

913 (“By regulation, the Secretary may reopen, with-

in three years,” citing 42 C.F.R. 405.1885(a)). Thus,

although Congress intended in Section 139500 to

authorize administrative and judicial review of the

intermediary’s annual determination as to the total

amount of program reimbursement, the Act is silent

with respect to whether, and to what extent, the

denial of a request to reopen an otherwise final reim-

bursement determination would be permitted or

subject to review.

“In light of this statutory ambiguity” (Pet. App. 7),

the Secretary permissibly interpreted Section

139500(a) and her regulations not to require adminis-

trative and judicial review of an intermediary’s denial

of a request to reopen. A contrary interpretation

would subject the PRRB to repeated appeals of re-

opening denials and “frustrat[e] the congressional

purpose to impose a 180-day limitation upon [PRRB]

review of a fiscal intermediary’s final determination

on an initial cost report.” Pet. App. 8.

This Court reached a similar conclusion in Cali-

fano v. Sanders, supra, when it held that 42 U.S.C.

405(g) did not authorize judicial review of a denial of a

motion to reopen a decision of a claim for Social

Security benefits. The Court observed that “the

opportunity to reopen final decisions and any hearing

convened to determine the propriety of such action

are afforded by the Secretary’s regulations and not by

the Social Security Act.” 430 U.S. at 108. “More-

over,” the Court reasoned, “an interpretation that

would allow a claimant judicial review simply by filing

—and being denied—a petition to reopen his claim

would frustrate the congressional purpose, plainly

evidenced in [42 U.S.C. 405(g)], to impose a 60-day

limitation upon judicial review of the Secretary’s

final decision on the initial claim for benefits.” bid.

Similarly, in construing Section 139500(a) not to

provide for review of a denial of request to reopen

under the Medicare program, the Secretary rea-

sonably adopted a “policy * * * obviously designed to

forestall repetitive or belated litigation of stale

eligibility claims.” 430 U.S. at 108.

b. The court of appeals also correctly coi. cluded

that the district court lacked jurisdiction under 28

U.S.C. 1331 to review the intermediary’s refusal to

reopen its otherwise final determination. Section

405(h), which is expressly incorporated into the

Medicare Act by 42 U.S.C. 1395ii, prohibits federal

courts from exercising jurisdiction under 28 U.S.C.

1331 to hear “all claim[s] arising under’ the Medicare

Act.“ Heckler v. Ringer, 466 U.S. 602, 614-615 (1984)

(quoting 42 U.S.C. 405(h)); see also Califano v.

Sanders, 430 U.S. at 103 n.3; Weinberger v. Salfi, 422

U.S. 749, 760-761 (1975). Because petitioner seeks a

review of the intermediary’s refusal to reopen peti-

tioner’s NPR for fiscal year 1989 or, alternatively, an

increase in its reimbursement for owners’ compensa-

tion costs, petitioner’s claims plainly arise under the

Medicare Act and may not be pursued under 28 U.S.C.

1331.

In arguing to the contrary, petitioner principally

relies (Pet. 9-22) on this Court’s decision in Bowen v.

Michigan Academy of Family Physicians, 476 U.S.

667 (1986). In that case, the Court concluded that a

federal court had jurisdiction under 28 U.S.C. 1331 to

review a challenge to the validity of a Medicare

regulation governing payments to physicians under

Part B of the Medicare program. At that time, Sec-

tion 1395ff provided for a hearing and judicial review

of challenges to payments made under Part A but not

Part B of the program. See 476 U.S. at 674 n.5

(quoting 42 U.S.C. 1395ff (1982)). The Court con-

cluded that neither 42 U.S.C. 405(h) nor 42 U.S.C.

1395ff(b) (as it then existed) precluded “challenges

mounted against the method by which [the] amounts

[of Part B benefits] are to be determined rather than

the determinations themselves.” 476 U.S. at 675.

Contrary to the situation at issue in Michigan

Academy, petitioner does not challenge a methodol-

ogy for computing Medicare payments under Part B

that would otherwise be immune from judicial review.

Instead, Section 139500 explicitly grants providers a

right to challenge an intermediary’s determination

under Part A as to the amount of Medicare reim-

bursement owed to the provider in a given cost year.

Like the claimant in Califano, petitioner had such

review available to it, but failed to exercise its rights

under the Act. Indeed, after Congress in October

1986 amended Section 1395ff to provide for administra-

tive and judicial review of challenges to payments

made under Part B of the Medicare program, Pub. L.

No. 99-509, § 9341(a)(1)(B), 100 Stat. 2037, lower courts

have held that federal courts lack jurisdiction under

28 U.S.C. 1331 to review any claim arising under Part

B of the program, including the type of methodology

disputes at issue in Michigan Academy. See Farkas

v. Blue Cross and Blue Shield of Mich., 24 F.3d 853,

859-861 (6th Cir. 1994); Abbey v. Sullivan, 978 F.2d 37,

41-44 (2d Cir. 1992); National Kidney Patients Ass’n

v. Sullivan, 958 F.2d 1127, 1130-1134 (D.C. Cir. 1992),

cert. denied, 506 U.S. 1049 (1993). Accordingly, this

Court’s decision in Michigan Academy does not sup-

port petitioner’s position in this case.

e. Finally, the court of appeals correctly concluded

that a decision whether to reopen a final determina-

tion is not subject to a federal court’s mandamus

jurisdiction under 28 U.S.C. 1361. Pet. App. 13-14.

Although this Court has declined to decide whether

Section 405(h) precludes federal mandamus jurisdic-

tion under 28 U.S.C. 1361, the Court has concluded

that such jurisdiction is appropriate under the Medi-

care program “only if the defendant owes [the

plainiff] a clear nondiscretionary duty.” Heckler v.

Ringer, 466 U.S. at 616. That requirement is not met

in this case. On its face, the Secretary’s reopening

regulation vests the intermediary—the “administra-

tive body that rendered the last determination” with

“exclusive[]” jurisdiction to decide whether to reopen

its own prior determination. 42 C.F.R. 405.1885(c).

Moreover, the regulation employs discretionary lan-

guage when it provides that “[a] determination of

an intermediary * ma be reopened * * *

by such intermediary * * * on motion of the pro-

vider affected by such determination.” 42 C.F.R.

405.1885(a) (emphasis added). Accordingly, the court

of appeals properly concluded that federal courts lack

mandamus jurisdiction over a denial of a request to

reopen.

2.a. Although the decision of the court of appeals is

correct, we agree with petitioner that the Court

should grant certiorari in this case. In addition to the

Sixth Circuit in this case, the Second Circuit held in

Good Samaritan Hospital Regional Medical Center

v. Shalala, 85 F.3d 1057, 1060-1062 (1996), that the

Secretary reasonably construed 42 U.S.C. 139500(a)

and 42 C.F.R. 405.1885 to preclude review of an inter-

mediary’s denial of a request to reopen a prior deter-

mination. Similarly, the D.C. Circuit has stated

that reopening denials under 42 C.F.R. 405.1885 are

unreviewable. See Athens Community Hosp. v.

Schweiker, 743 F.2d 1, 4 n.4, 8 (1984), and St. Mary of

Nazareth Hosp. Ctr. v. Schweiker, 741 F.2d 1447, 1449

(1984).¢ By contrast, the Ninth Circuit held in State

of Oregon v. Bowen, 854 F.2d 346, 349 (1988), that

4 In HCA Health Services of Oklahoma, Inc., supra, the

D.C. Cireuit upheld the Secretary's position that the PRRB’s

jurisdiction to review the result of a reopening is limited to the

specific issues revised in the reopening. 27 F.3d at 619-622. In

reaching that conclusion, the D.C. Circuit reasoned that t he

language of the Statute itself * * * leaves us in a quandary as

to whether a reopening is a ‘final determination . . . as to the

amount of total program reimbursement due the provider,

within the meaning of [Section] 139500(a)(1)(A)(i), to which the

rights for Board review under subsections 139500(a) and (d)

should apply.” 27 F.3d at 618-619.

“(tlhe plain meaning of Section 139500(a) entitles

[providers] to Board review” of an intermediary’s de-

cision denying a request to reopen. The Ninth Cir-

cuit reasoned that the intermediary’s denial is a final

determination that “directly implicate[s] the amount

of total program reimbursement due the provider for

items and services furnished.“ 854 F.2d at 349

(quoting 42 U.S.C. 139500(a)(1)(A)(i)). Because the

Ninth Circuit concluded that the Secretary’s con-

struction of the Act fails under the first-step of the

Chevron analysis, the decision in State of Oregon

directly conflicts with the instant decision and the

decision of the Second Circuit in Good Samaritan

Regional Hospital Medical Center.“

5 The Ninth Circuit also reasoned that the Secretary's

reopening regulation was mandated by 42 U.S.C.

1395x(v)(1)A)(ii), which authorizes the Secretary to issue

regulations that “provide for the making of suitable retroactive

corrective adjustments where, for a provider of services for

any fiscal period, the aggregate reimbursement produced by

the methods of determining costs proves to be either inade-

quate or excessive.” See 854 F.2d at 349. The Ninth Circuit

subsequently concluded, however, that its construction of

Section 1395x(v)(1)(A)(ii) in State of Oregon has been “under-

cut” by this Court's decision in Good Samaritan Hosp. v.

Shalala, 508 U.S. at 414-420, which held that the Secretary

reasonably construed Section 1395x(v)(1)(A)ii) narrowly to

refer only to the year-end book-balancing of monthly estimated

payments to providers mandated under 42 U.S.C. 1395g with

the final post-audit amounts determined to be reimbursable

under the Act and the Secretary’s regulations. See French

Hosp. Med. Ctr. v. Shalala, 89 F.3d 1411, 1418 n.8 (9th Cir.

1996).

® Contrary to petitioner’s assertion (Pet. 6), the Eighth

Circuit’s decision in Hennepin County Medical Center v.

Shalala, 81 F.3d 743 (1996), does not bear on the question

Although there is no conflict among the courts of

appeals over the question whether federal courts may

review a denial of reopening under 28 U.S.C. 1331 or

1361, at least one district court has indicated that

such review is authorized. Memorial Hosp. v. Sulli-

van, 779 F. Supp. 1410, 1412 (D.D.C. 1991). Moreover,

the court of appeals in this case decided those issues

and, therefore, we believe it would be appropriate for

the Court to resolve those questions in connection

with its resolution of whether the Secretary rea-

sonably interpreted Section 139500(a) not to require

review of an intermediary’s decision not to reopen an

otherwise final determination. Only by doing so could

the Court assure a comprehensive resolution of the

availability of judicial review.

b. The reviewability of denials of requests to re-

open presents an important and recurring issue in the

administration of the already overburdened Medicare

program.“ Currently, approximately 38,000 providers

presented. That case involved an intermediary’s decision to

reopen a final determination. See 81 F.3d at 746.

Neither court below addressed petitioner’s contention

(Pet. i) that 5 U.S.C. 706 independently grants subject matter

jurisdiction over refusals to reopen. The Court in Califano v.

Sanders, 430 U.S. at 107, however, held that the Administra-

tive Procedure Act “does not afford an implied grant of

subject-matter jurisdiction permitting federal judicial review of

agency action.” Petitioner’s further argument (Pet. i, 21, 24-

25) that denying judicial review of denials of reopening would

violate its due process rights was not raised below. We there-

fore do not believe that contention should be considered by

the Court. See, e.g. Youakim v. Miller, 425 U.S. 231, 234 (1976)

(per curiam); Auer v. Robbins, 117 S. Ct. 905, 912 (1997); Citi-

zens Bank of Maryland v. Strumpf, 516 U.S. 16, 21 n.“ (1995).

We have been informed by the Health Care Financing

Administration in the Department of Health and Human Ser-

nationwide (and 5,400 in the Ninth Circuit, where

State of Oregon controls) receive annual NPRs re-

flecting an intermediary’s determination as to the

total amount of Medicare reimbursement due the

provider. Each of those NPRs relates to thousands of

reimbursement determinations that may be subject to

a subsequent request by the provider to reopen under

42 C.F.R. 405.1885.“ The existence of a right to appeal

the denial of a request to reopen any of those thou-

sands of determinations should not depend on the

fortuity of the State in which the provider resides.

Thus, this Court’s resolution of the reviewability

issue is warranted.

3. Petitioner also requests (Pet. 22-25) that this

Court grant certiorari to decide whether the Secre-

tary’s position in this case is “substantially justified”

under the Equal Access to Justice Act (EAJA), 5

U.S.C. 504 and 28 U.S.C. 2412. There is no basis for

review of that issue. Petitioner has not filed a fee

application in this case and, because the Secretary

prevailed below, neither the district court nor the

court of appeals had occasion to address the question

whether the Secretary’s position should be regarded

as substantially justified if petitioner had prevailed.

Even were the Court to resolve the merits of this

case in petitioner’s favor, the fact-bound question of

vices that, at the present time, the PRRB has a backlog of

10,000 cases.

The Secretary estimates that, at any given time, the

PRRB has pending before it approximately 20 appeals of

reopening denials by providers located in the Ninth Circuit.

Moreover, providers in other circuits that have not resolved

the issue continue to challenge denials of reopenings. See, e. g.,

St. Vincent Health Ctr. v. Shalala, 987 F. Supp. 496 (W.D. Pa.

1995), aff' d, 96 F.3d 1434 (3d Cir. 1996) (Table).

whether petitioner is entitled to any EAJA fees is

more appropriately addressed by the district court in

the first instance. See Pierce v. Underwood, 487

U.S. 552, 560 (1988).

CONCLUSION

The petition for a writ of certiorari should be

granted, limited to the question whether the denial of

a Medicare provider’s request to reopen an annual

reimbursement determination under the Medicare

program is subject to review under 42 U.S.C. 139500,

28 U.S.C. 1331, or 28 U.S.C. 1361.

Respectfully submitted.