# Prologue — Leavitt v. Baystate Health Health Systems Systems (No. 05-936) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0749%3A0 ## Record - **Collection:** Supreme Court brief - **Document type:** Prologue - **Published:** January 1, 2005 ## Text @5-936U0N 26 2006 No. Q&EIC Entei oi ai In the Supreme Court of the Gnited States MICHAEL O. LEAVITT, SECRETARY OF HEALTH & HUMAN SERVICES, PETITIONER —o—— BAYSTATE HEALTH SYSTEMS, D/B/A/ BAYSTATE MEDICAL CENTER, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT PETITION FOR A WRIT OF CERTIORARI PAUL D. CLEMENT Solicitor General. Counsel of Record PAULA M. STANNARD i PETER D. KEISLER Acting General Counsel Assistant Attorney General THOMAS R. BARKER Epwin S. KNEEDLER Deputy General Counsel Deputy Solicic. ‘General KATHLEEN H. MCGUAN LISA S. BLATT Associate General Counsel Assistant lo the Solicitor : MARK D. POLSTON General Deputy Associate General ANTHONY J. STEINMEYER Counsel for Litigation -— ANNE M. MURPHY GERARD KEATING : Attorneys SYLVIAJ. TRUJILLO = Department of Justice Attorneys Washington, D.C. 20536-0001 Department of Health and (202) 514-2217 Human Services Waskington, D.C. 20201 QUESTION PRESENTED Whether a federal court may, under 28 U.S.C. 1361, com- pel the Secretary of Health and Human Services to reopen and revise final Medicare payment determinations where the Secretary prospectively changed his interpretation of the Medicare Act to acquiesce in adverse circuit decisions and expressly ordered his fiscal intermediaries not to reopen and revise any final determinations. (1) PARTIES TO THE PROCEEDINGS The petitioner in this Court is the Secretary of Health and Human Services, Michael O. Leavitt. The respondents are twenty-six Medicare providers: Baystate Heulth Systems d/b/a Baystate Medical Center, Berkshire Health Systems, Brockton Hospital, Carney Hospital, Cooley-Dickinson Hos- pital, Harrington Memorial Hospital, Holy Family Hospital, Holyoke Hospital, Jordan Hospital, Landmark Medical Cen- ter, Lawrence General Regional Health System, Inc., Lifespan, Lowell General Hospital, Memorial Hospital of Rhode Island, Morton Hospital and Medical Center, North Adams Regional Hospital, City of Quincy Hospital, Roger Williams Medical Center, Providence Health System, St. Anne’s Hospital, Caritas Christi Health Care System, St. Joseph’s Health Services of Rhode Island, Southcoast Hospi- tals Group, Sturdy Memorial Hospital, University of Massa- chusetts Memorial Medical Center, doing business as Uni- versity of Massachusetts Memorial Hospital, and University of Massachusetts University Medical Center, doing business as University of Massachusetts University Hospital, which were appellees in the court of appeals. (II) TABLE OF CONTENTS Page Opinions below ..........-sccscecesereee ime ienpenih soeanetepnvineononee 1 SE iciciersitinhinmechinenieviviichiaticciictsjuiilesipilicinpiatiinsines okais ] Regulatory provision involved ..............00 siiisiia ahalpitennigiteaabaeets 2 NI io aiigcc titles sdgessincetenisilecegsniinpeniét dabei sieeneantabiatitababintioniaions 2 Reasons for granting the petition .............ccsscesceceseseeevees seals 8 A. The court of appeals’ decision is clesrly CITONCOUS ....00cc-ccersceses diptiniatiailabdnniniusiabubincktinienseenaiis 11 1. The providers failed to exhaust their right to appeal the intermediaries’ DSH deter- ORION, fs ssicscinstrvsvcnnsassionics pilin thescaaibvicokaicias 12 2. The Secretary has no clear duty to reopen reimbursement determinations ............sessseee 13 a. Thedecision whether to reopen is committed to the Secretary’s unre- Viewable GISCTELION ........cecercccsensecorcesesssossees 14 b. Ruling 97-2 neither notified fiscal 4 intermediaries of an error of law nor : OPEMOT OD TOODOII aoc sacigocccksiccencatiibtbcrntinienss 17 ¢. The providers’ failure to make a timely request for reopening nullifies any supposed right to obtain reopening .......... i9 d. The court of appeals’ decision greatly undermines critical principles of ENED BCT LT LEC ORE A DRT 20 B. The court of appeals’ decision warrants this CEE POVIOW oo cescisccsosccresiat vsciisebweibiphetis iseishabakaaeha coast 22 1. The court of appeals’ decision conflicts with decisions of other courts of appeals and cannot be reconciled with decisions of SITIES sescecitinecnc dun iuoeeicul senoediaboreditonshiians 22 (II) IV Table of Contents—Continued: 2. This Court’s review is also warranted because of the fiscal and administrative impact of the court of appeals’ decision .. COIN seiviessiescccsssserees sesciduinainen , sspeibvnabvediomipcls PRD soieinbiasciaascenedsecctsgeabebite ce seicecodiosuioncikceviatcelantabeaivnipeless API TS oc cicecicsciscciiodvinie rascensorvessesoveasoonsveonssones PIII sorcxccoisaiiesinccsticesisiinipnedisneiastsdgeistankssidiciectombucstbigebpsdios PRTG, EF cassis cs sccsed vvecsa soos iocasaaiencotabssustucustaipaaibesnsmabics PASTE TG pascccess cases pacescn cansbavatboconncssstiveoigessbbatantiarsbeaicersosoaiataoens PATNI picscbasevekeshilinsnacasicecccdaghapaponipacdieuseiudiilndataidekecdanitacdias TABLE OF AUTHORITIES Cases: Alaska Prof Hunters Ass’n v. FAA, 117 F.3d RO EFAS SAU REI aici nscsvacoaibtstincabivtdasasinGabeousgwndssaicsonecsa: Allied Chem. Corp. v. Daiflon, Inc., 449 U.S. 33 CS IONEY stiussesenebccieiasipeiadscstoctenines Sa camasadaslepiaenion i inaseoncat Atcheson, Topeka & Santa Fe Ry. v. Pena, 44 F.3d 457 (7th Cir. 1994), aff’d, 516 U.S. 152 (1996) .... Auer v. Robbins, 519 U.S. 452 (1997) ......-.ccccccecescosssoserssseee Bartlett Mem'l Med. Ctr., Inc. v. Thompson, Page | 27 30 la 12a dla 47a 49a 54a 347 F.3d 828 (10th Cir. 2003) .... 7, 10, 12, 15, 17. 18, 19, 22. 28 Bethesda Hosp. Ass’n v. Bowen, 485 U.S. 399 LRNIODY sickcsiosiedarcdscdainsisdicisaiidiad sheamaipubnlebianiaaiiiaiadedoveanaisdibed cideapisiee Brogan v. United States, 522 U.S. 398 (1998) on. eeeseeeeee Cabell Huntington Hosp. Inc. v. Shalala, ROLF AE DOA CARI Cin, EDD). iickinsesiiecocncccsscacescenscstoosncissvons Califano v. Sanders, 430 U.S. 99 (1977) 2... Scsscatae Cheney v. United States Dist. Court, 542 U.S. 367 SE incsinvvnicsasidean ve cendbiccaseatiasbied pois iqhianlcmdatodcgsientsaebiasidebabalbioen Deaconess Health Servs. Corp. v. Shalala, SOF ee BOE T CR CaP FSD ciicissisancsanesciiccancvsecdabibpeoatasdondace Erriniger v. Thompson, 371 F.3d 625 (9th Cir. a a) SB one MRE AO RDN LER Ie NORE ST LOOMIS ED TSE a Cases—Continued: Page Gulf Stream Aerospace-Corp. v. Mayacamas e Corp., 485 U.S. 271 (1988) .......... adinigiaiatienecticcstelabinninanciorn 12 Harper v. Virginia Dep’t of Taxation, 509 U.S. 86 (1993) ...... : siientanteiitiesaiaresatiates 21 “Heckler v. Ringer, 466 U. S. 602 CUED ceccssrentntssoiesic 12, 13, 24 ICC v. Brotherhood of Locomotive Eng’rs, GE AS Bos Ee LMT sirsnccetrinisrrsessntverttitinasinetghiniobapitocoiinenben 17,21 Jewish Hosp. Inc. v. Secretary HHS, 19 F.3d 270 IRE Ce TONED wisisessiiecincaiireeevinesteesictnitlniintisicregnienibanlisicdenceoupnnins 13 Legacy Emanuel Hosp. & Health Ctr. v. Shalala, FE Fak FBG GE Cir TDG) ssisiciscincsesesstesscstertnctotopscvsccstoecey 13 Mathews v. Eldridge, 424 U.S. 319 (1976) oc ccceseseeeees 20 Monmouth Med. Ctr. v. Thompson, 257 F.3d 807 EAA Saeik MONE) aniivicbativesidhsies anibinieebadescauiisinhin atedidiaenireclanaesens passim Paralyzed Veterans of Am. v. D.C. Arena L.P., 117 F.3d 579 (D.C. Cir. 1997), cert. denied, 523 EL tas RAR CAMO) scessdcrtcrniestemasckenobsictinsaeuniee 6, 10, 18, 19, 24, 25 Pittston Coal Group v. Sebben, 488 U.S. 105 : SC RIPUIEED sccnilnjdlenvnineiitietseeaieniiesbiahenbeeirsisedivilebpalecbermunaeasennmebenoan 13, 21, 24 Regions Hosp. v. Shalala, 522 U.S. 448 (1998) wees 23 Reynoldsville Casket Co. v. Hyde, 514 U.S. 749 CRED schacescscaccbacuenedsbbadeidbniaiampentavenseccbaahbeagbesiiceabineacininaltecyies 21 Shell Offshore, Inc. v. Babbitt, 238 F.3d 622 (Sth RMS BUTE DS saccticicosecaurasnicsull cis ecsnnspecnguienesasabasieomaaesaceineiinetionmmnensnbabin 25 Thomas Jefferson Univ. v. Shalala, 512 US. 504 Df Ie ENS men aca Aten SoMa NUE SRR aE Staverton re 17 Vermont Yankee Nuclear Power Corp. v. NRDC, 435 US. S19 CE9TS) .......cccee0e = eaaeeapnabineiaehaiedsin voueaaetimnteiepioas 25 Warder v. Shalala, 149 F.3a 73 (st Cir. 1998) 2.0.2.2... 25 Your Home Visiting Nurse Servs., Inc. v. Sealala, Ge U S64 CHIDO) ens ccccccscsceccecosenacenevessesienecs putsstm Statutes and regulations: Administrative Procedure Act, 5 U.S.C. 551 et segq.: Be Say TIME sins esais cnsasccibudedesacqpediiecccnionebianldiobacicansuenmnbidiy ies 6 Statutes and regulations: Page 5 U.S.C. 558(b)(A) ....... 5 25 Medicare Act, Tit. XVIII, 42 U.S.C. 1395 et seg. .........0000. 2 42 U.S.C. 1395d a 2 42 U.S.C. 1395h ... 2 42 U.S.C. 1395hh(a)(2) 25 Po EEE Tei SALAS URES IF OCR RENO MORE DOSE er SRO oe GE UB. 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Say CR ioscan ccicticsssabicsitenstontion 11,12 FE A) RG Ac SITE acceseninckiasaicdioncsnviahpabsitocaaiotanscoeabeukabaonnincivaite 4 OR UE TM ee 4, 12, 15, 16 42 C.F.R.: ONE a POEL ILD osiisnss dacs scabcssuucsteciacherdaiedintsoesiccaccoinnuiads 2 OR MIDE MN MII es a chased siacnsubiah paosoohenieienuuiasgddoohidalintiacuisbe 2 See iam RO IT assassin coisctanecnpcoesesiildsbelins cccndbesceianch : 12 SEENON MAN SOROUD ssveciraswchcticaseessistivibinieab cnichehebant iapsnetutigcicdudisions 3 POETS HUES BOMB OMIRY is concn eseiasevnadoencensondncion ssteduncviosbatatitsisbusiacodis 3 RUROCION TI I scrscincsehcnscdn sbeticseiraacatoumas concchsehdnccnseaiseumaiios 3 SUOMEMEIUE HPN MAO EF Sicciicn acon ccsiccecshcsksselaticags tock ads tadiadentlabaaice bie 3 SENOS I REMI sia aicicen nieces nicht sniGersudaccncoees pcnanoaniincadcbaaamsetaon eg Peseta: GEE, BIS a passim Seeteins Mia Raa) CRIT) cic ccacacccccvsoaeoni> soapnnssteiewecs 4 SOMES DEEN RID ori scescnspnecesdicecsescdnnace d, 6, 9, 14, 15, 16 section 400. 158B(D) (1987) 0. .ec.cerecrssecscccsetssavcestateseseose 3, 14,16 Section 405. 1885(b)(1)(1) (2OO2Z) .......-.cccscsssscccscececsssscsrrcncees q Vil Regulations—Cont. . -d: Page Section 405.1885()i 1 (ii) (2002) 2.2... cecsssesececseceesncecenceneeees 7 Section 405.1885(1)(2Z) (2002) .......cvccsssrcerercecerceserensercseeerees 7 SOEEIONE GPs BOITIOD isciiiteonisscbinissainiepniiiieaniaetebscosinepetanibartadings 3 RTE LI wins eltissivsecevvtshdeuninessiciiiobiiaplesiiemmapiensaiconesi 28 SEINE SEA GID) icccrvennseinipivdpiis-einteerersdiplbacanpalaoiecmiicontcnesine 29 CON ETE Sais iecitecssctcenieesecsin chpsinicapcnebicevaddaidbibceah scbecuidele 2, 29 Miscellaneous: p 108 Cong. Rec. (1962): SOU EE eens Mtg; sancesicsessacipinctnichovincopbevnseasiiibubeinepasblgiaaipaubpddbhaias 16 i ON re es 16 a SN i 16 Bi FNL Bes FO, Fae CRT) sescancpctacssvinilnesecharsvasttecetedtebieasbebiades 15 51 Fed. Reg. (1986): Sic SUCRE A. ciunclslasedidebedivicciapeamasdioentumanibitcdstcduassancaamhadicaiaias 4 Ce SAGO eRe oi a Mee ENE POU, Bere De 4 63 Fed. Reg. (199%): Se I 265 ES, GeO. scsasccchiniicamanandnisseicieladctachsimigbinaketaliiaodaae 26 PRG | APMC ae abot oy mana hy viata tec ome EET CME 26 SF,” ME RU sabes checanictecnpnscoubeebbadtcbnoned: beste Soebeadoneiitasovimeud bscbanes 26 GF BU: Ft LOA): weicisinscscoverevtcliccv tinphevinntlantenviiansentibes 3 67 Fed. Reg. (2002): S|: AEM DMN \ciaciibs-sotheemmstahcsaeickokdciebvsdbixinrehidea obanabciadniacaadiauaadiasasbiis 7 Ai: Rear ey elias WIE a ESI Tia ma 15, 22 sn OE ae 17 89, SO APPEND NO seicpicchnencsidcssanmnicteibpiosaninnbsiaebontertncsutaadee 17,21 Ohi TIO Eos snes sp brensehnniopulesietiottode deacidactiosiuiiaaainlamaaniags 21,22 Health & Human Servs., CMS Financial Report, Pineal 2 ett 2003 CNV. DOOD) aaiccocinnncteciccssoangscsctosperves 4,28 HCFA Ruling 97-2 (Feb. 27, 1997) ........0cccscscocercorriocsseeses passim S. Rep. No. 1992, 87th Cong., 2d Sess. (1972)... cessessseeseees \ 16 Jn the Supreme Court of the Gnited States i No. MICHAEL O. LEAVITT, SECRETARY OF HEALTH & HUMAN SERVICES, PETITIONER v. BAYSTATE HEALTH SYSTEMS, D/B/A/ BAYSTATE MEDICAL CENTER, ET AL. ON PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT PETITION FOR A WRIT OF CERTIORARI The Solicitor General, on behalf of the Secretary of Health and Human Services, Michael 0. Leavitt, respectfully peti- tions for a writ of certiorari to review the judgment of the United States Court of Appeals for the District of Columbia Circuit in this case. OPINIONS BELOW The opinion of the court of appeals (App., jufra, Ja-11a) is reported at 414 F.5d 7. The opinion of the district court (App., infra, 12a-30a) is reported at 309 F. Supp. 2d 89. JURISDICTION ‘ The judgment of the court of appeals was entered on July 1, 2005. A petition for rehearing was denied on September 28, 2005 (App., infra, 47a-48a). On December 19, 2005, Chief Justice Roberts extended the time within which to file a pe- tition for a writ of certiorari to and including January 26, 2006. This Court’s jurisdiction is invoked under 28 U.S.C. 1254(1). (1) REGULATORY PROVISION INVOLVED The reopening regulation, 42 C.F.R. 405.1885 (1997), and Ruling 97-2 are reproduced at App., infra, 49a-55a. STATEMENT l. a. Title XVIII of the Social Security Act establishes the federally funded Medicare program to provide health insur- ance to the elderly and disabled. 42 U.S.C. 1395 et seq. Part A of the program provides insurance for covered inpatient hospital and related post-hospital services. When patient beneficiaries receive covered services, the Secretary of Health and Human Services (HHS) reimburses the provid- ers of those services under the Medicare Act and the imple- menting regulations. 42 U.S.C. 1395d, 1895ww(d). A provider's total allowable Medicare payment is based on a “cost report” that it must prepare after the close of its fis- cal year. 42 C.F.R. 405.1801(b)(1), 413.24(f). The cost report is filed with a “fiscal intermediary,” generally a private in- surance company that acts as the Secretary’s agent and de- termines the amount of payments to be made pursuant to an agreement with the Secretary. 42 U.S.C. 1395h. The inter- mediary analyzes the cost report, audits it to the extent nec- essary, and issues the provider a written “notice of amount of program reimbursement” (NPR) containing the final de- termination of the total amount due the provider for Medi- care services during the reporting period. Your Home Visit- ing Nurse Servs., Inc. v. Shalala, 525 U.S. 449, 451 (1999) (Your Home); 42 C.F.R. 405.1808. Congress specified in the Medicare Act a comprehensive scheme for administrative and judicial review of a fiscal in- termediary’s final determination. A “dissatisfied” provider may obtain a hearing before the Provider Reimbursement Review Board (PRRB) in HHS if the amount in controversy ~is at least $10,000 (or $50,000 for group appeals) and the pro- vider requests a hearing within 180 days after notice of the intermediary’s final determination. 42 U.S.C. 139500(a)(1(A)i), (a2), (a)(3), (b), and (h); 42 C.F.R. 405.1835, 405.1845(a). See Your Home, 525 U.S. at 451; Be- thesda Hosp. Ass’n v. Bowen, 485 U.S. 399, 403-404 (1988). The Board’s decision is subject to review by the Secretary and 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. 405.1875 and 405.1877; Your Home, 525 U.S. at 451. b. The Secretary has promulgated regulations governing “(rjeopening” of Medicare reimbursement determinations and decisions. 42 C.F.R. 405.1885; Your Home, 525 U.S. at 451. The reguiations provide that a determination by the intermediary or a decision of the PRRB or the Secretary on administrative appeal may be reopened within three years with respect to specific “findings on matters at issue in such determination or decision,” on the motion of either the af- fected provider or the relevant decision-maker—the inter-- mediary, PRRB or Secretary. 42 C.F.R. 405.1885(a); see Your Home, 535 U.S. at 451. For the time period relevant to this case, the regulations further provided that “{a] deter- mination * * * rendered by the intermediary shall be re- opened and revised by the intermediary” if, “within the aforementioned 3-year period,” the Health Care Financing Administration (HCFA) in HHS notifies the intermediary that such determination “is inconsistent with the applicable law, regulations, or general instructions issued by [HCFA] in accordance with the Secretary’s agreement with the inter- mediary.” 42 C.F.R. 405.100%(b) (1997). The Secretary’s reopening regulations also provide that “(jjurisdiction for reopening a determination or decision rests exclusively with that administrative body that ren- dered the last determination or decision.” 42 C.F.R. ! HCFA has been renamed the Centers for Medicare and Medicaid Services (CMS). 66 Fed. Reg. 35,437 (2001). 465.1885(¢). This Court held in Your Home that an inter- mediary’s denial of a request under 42 C.F.R. 405.1885(a) (1997) to reopen an intermediary’s final determination was not subject to review by the PRRB or by a federal court un- der federal question jurisdiction, 28 U.S.C. 1331, or the man- damus statute, 28 U.S.C, 1361. 525 U.S. at 452-457. “ 2. In February 1997, HCFA issued Ruling 97-2, which prospectively acquiesced on a nationwide basis in the ad- verse decisions of four courts of appeals that had rejected the Secretary’s method for calculating the “disproportionate share hospital” (DSH) adjustment to the rates applicable to those hospitals that serve a disproportionate percentage of low-income patients. App., infra, 49a-53a. In authorizing DSH adjustments, the Medicare Act requires calculation of a fraction whose numerator is “the number of the hospital's patient days for such period which consist of patients who (for such days) were eligible for medical assistance” under Medicaid. 42 U.S.C. 1395ww(d)(5)F)(vi)UL). In a preamble to the 1986 regulations implementing the DSH provicion, the Secretary explained that he interpreted the Act to mean that “Medicaid covered days will include only those days for which benefits are payable,” 51 Fed. Reg. 16,777 (1986); ac- cord 51 Fed. Reg. 31,460 (1986), and thus to exclude days for which patients were not eligible under the terms of a State’s Medicaid pian to receive payment for services. Ruling 97-2 explained that, although HCFA “believes that its longstanding interpretation of the statutory language was a permissible reading of the statutory language,” HCFA recognized that its interpretation “is contrary to the applic- able law in four judicial circuits.” App., infra, 5la. Accord- ingly, HCFA announced that it would follow the adverse ap- pellate decisions on a nationwide basis beginning on or after February 27, 1997, in order “to ensure national uniformity in calculation of DSH adjustments.” Jbid. Ruling 97-2 stated that HCFA would begin to “count in the Medicaid fraction --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386016_0749%3A0. Public record. Not legal advice.