for a long term care hospitals suddenly who suddenly stopped receiving medicare reimbursement for bad debts of dual eligible beneficiaries because the agency changed the reimbursement requirements under its so called must bill policy without notice leaving the hospitals with no way to comply agency's action violated multiple sections of the medicare statute notably the notice and comment rule making requirement in the medicare statute section three hundred and  agency that the court is to review the agency's record under section seven of six of the a p a to determine whether the agency's action was arbitrary and capricious an abuse of discretion not in accordance with the law without observance of procedure required by law or unsupported by substantial evidence and the court is to view the evidence in the light most favorable to the hospitals which is something we believe the district court did not do in this case now these four hospitals are located in north carolina pennsylvania has had a scaled so what is the policy that you are challenging in and when was that policy according to you promulgated or initiated thank you for the question judge wilkins i know from your involvement in the grossmont case you're familiar with the must but policy under the reimbursement scheme for medicare this particular requirement at issue is the medicaid prevents advice requirement it's medicare's determination the sole document provider have to submit to support dual eligible reimbursement for bad that is a remittance advice from the state which is a payment determination made on the medicaid claim so that's what it what's at issue the gourds approach when are you saying that that policy was was adopted the courts of the district court in this circus are determined that that must fill requirement with a medicaid permits advice was adopted in two thousand and four under the joint signature memorandum three hundred and seventy in this case these hospitals receive their due all to pat reimbursement without billing the state or submitting a medicaid remains device from the state up until april two thousand and eight so there's a period of about four years where the medicare contractors were actually requirement put them in what the district court has determined to be a catch twenty two dollars that clearly was the case here with these it were hospitals let me interrupt you because what has confused me about this case is that your your complaint in your briefing suggests that what you're challenging is a change that happened in april two thousand and eight because you say that prior to  that bills were being reimbursed even when the state hadn't been billed in so that the change that occurred was in april two thousand and eight when that stopped happening so are you are you question these hospitals do not challenge the j s emma two thousand and four going to challenging the agency's decision to impose the remittance advice requirement on these hospitals beginning in april two thousand and eight now from the other cases decided by your district court a number of decisions the select specialty case if you by trying to how the can or health care case as well we know that other long term care hospital companies in the two thousand and seven to two thousand and eight time frame also experienced the same change in policy by the agency where the agency imposed this remain suffice requirement for the st time thereby putting them in the position of having in a catch twenty two this is page i guess eighteen of the administrators ruling the administrator said in so many words the hospitals have alleged  that they have been paid claims have been paid where even without state remittance vices in in that they were you know exempt from this requirement but the administrator said you know there's no that wasn't because of any agency policy maybe it happened but it wasn't as a result of agency policy basically you know  mistakes happen some things fall through the cracks and so the administrator basically found that what you were challenging as far as you know whatever change happened the around april two thousand and eight that change was not as a result of agency policy and it seems to me that even though we review the district court to novo on summary judgment we still employed a substantial evidence and or arbitrary and capricious review under the a p a of the administrators ruling in so tell me why that that that finding that there was no policy that affected you wasn't supported by substantial evidence in this administrative record your honor the fact is that the agency did not issue anything in writing stating this change in policy nevertheless the evidence in the record which includes the sworn testimony of the providers witness the record reimbursement  started be adjusted and that's corroborated by the record of the other cases your honor let's suppose we accept that it's paid by contractors in if the contractors pay it in you know either as a mistake or kind of in defiance of agency policy but then the contractors start following agency policy then  determined that this was in fact a substantive change that was imposed upon the hospitals that the fact that they had to enter into contracts with the medicaid programs to participate which they previously didn't have when medicaid participation is not every quarter meant under the medicare statute or the regulations to be able reimbursed by the medicare program and therefore fits within the elina structure of rationale that is interpret all but it had to go through notice and comment rule making the fact is that the appellant here did not receive any notice whatsoever that they would have to comply with this medicaid remittance advice only requirement  even after the j s m was this year and so had they received such notice your honor they certainly would have tried to enroll these medicaid programs sooner or convince agency through the common process that it was not a good policy that there needed to be some exception which in fact was the case leading up to april two thousand a pretty particular hospitals all right judge walker do you have any on a question that judge logan's was asking about with respect to the non medicaid participating aspect of all this the must kill policy has been in place for the better part of four decades and to age twenty one i believe our brief to the one point out want to address what the are a requirement is i actually don't think it matters here at all as this court found in for us and just to back this up a little bit there is to require you submit a bill to the state and to the state medicaid system and then you wait the state says you know here's my determination this is how much you know the state medicaid system ozias places here haven't even gotten past that st step and the district court decisions that they cite all address the nd step i think that actually all those decisions in a way support us mercy general for instance says that there's two steps of this and the provider has to meet the st one st they have to st go out there and go build the state medicaid systems  four p r n for example in our briefs there's earlier versions of that p r m from before and i think seventy four it's just that those aren't in the record and you know usually in the administrative process the government or the brass tacks on this stem from the confusion about sort of jargon and the jargon that's changed in the medicare and medicaid setting over the past four decades i'm i'll be the st to admit that they didn't use the word you know that might be called a remittance advice it might be called a rejection letter and might be called a reimbursement and might be called any number of things and i think that's one of the things that district courts in this area have gotten hung up on a little bit where they look at let me ask you know eighty five manual let me ask about those decisions do you think that they have any kind of should had any kind of a stop all effect on the district court and in our case and i take it probably don't think that so if you can kind of walk me through you know the government or certainly well represented in those all those debtor court decisions did was remain and those cases back to the agency for the agency to decide what amount of reimbursement was due and i do want to address those decisions real quick because i think there's three of them as i mentioned mercy general really does help us because it's eyes you really have to get through that must go like the billing requirement st which is exactly what these particular plaintiffs have not done because they try to exempt themsel change in policy because contractors apply preexisting policy to the hospitals in those particular cases the supreme court has made very clear that contractors don't have the authority to resolve policy questions contractors can't override c m s policy they can't override the administrators policy and that's a really good reason there are thousands of providers and hospitals out there if they get approved for some sort of reimbursement and they shouldn't have gotten approved that will never reach c m s is attention in most cases and that's because it's  the government appealed select and then a few days later after the after the appeal it withdrew its appeal it if select was wrong as you just said drop that appeal  i can't get into the reasons why the government made certain decisions about whether to appeal or not i will say there's you know the government is pretty judicious about when it decides to pursue appeals and doesn't decide is in assessing whether the district court erred in finding forfeiture yeah i think that's you know what i'll say is you know the board this court to just say that you know there wasn't actually a valid argument about the are a requirements as presented to the board and as presented to the administrator i don't think we needed to you know if this were a question of whether an argument was developed in the trial record i think we'd be in sort of a piece of discretion land for sure but in terms of identifying which issues were in front of the board or actually addressed in a board decision  that seems to be a fairly straightforward kind of legal inquiry and i just want to point out with the waiver question i don't think the waiver question is just  whether sort of in the abstract whether they would waive the bad debt moratorium it really is have they developed this argument before the board what they included was you know a short section that was about a page and a half in the legal standard section of their final post here in brief with no citations to any policy that the secretary had changed no announcement of any policy of the secretary changing any sort of policy and the board said well like it the only thing that we think you've raised is the billing requirement that's been in place for many decades and if there are no further questions i see my time has elapsed  it's it's disingenuous for the government to say that there was in fact ever meant slice requirement dating back to before nine hundred and eighty seven with respect to judge walker's questions about the mercy of the  the fact is the government did not appeal those decisions the suspect in a case was ill who withdrawn the government has not defended if position in those cases and we believe those three decisions in particular form a constellation of it was address in the p r b decision and to some extent was actually discussed in the administrator decision as well but we believe the court clearly erred in finding that there this was an adversarial process at the administrative review level  when it doesn't have any the hallmarks and of a sense a supreme court case for being an adversarial proceeding in fact lined up with all those factors in sam's for determining that was not adversarial and we think the court should have not created judicially imposed waiver requirement for this process that's been in place for about fifty years with the p r being an administrator i've practiced before the board in mystery for twenty years and we've never had this type of role these are comments only optional and submitted to the administrator solely for their consideration as they do a plenary review of the p r b decision and the entire record so i submit to your honor's that that