part two so given my earlier admonition we've really plowed the fields in terms of you know the landscape and on and on and on so to be helpful to the belly be sort of horny and then where this narrows into the to the nd appeal which which is different but obvious it's the same regulations and so on and so forth but it where they are variations in the pack back pat and notice but they continue to please the court so one of the i'm here now representing four other providers who were located in the abilene texas wage area in the waiting area for medicare payment purposes so when the wage index came in for abilene too low not only did it affect hendrik but it affected these these other four providers as well the  what we what i would in this instance it is actually somewhat different because hendrick medical center was dismissed for lack of jurisdiction for failure to exhaust its administrative remedies that's not the case with the with the these four providers their wage data was correct what happened was they were prejudiced they were affected detrimental e by the secretary's use of the incorrect wage state offended medical center and so so just to be clear  the providers are not here asking for the wage and exit be changed they're not they're not asking to correct hendrik medical center's wage data they're not secretary already has that correct writ that correct data what the what the providers are seeking peer is to be paid based on the evidence the substantial evidence that is in the record of this case and clear the and here the undisputed record of the case is that the hendrix data was incorrect but the correct information was in the data was in the what was in the record so what the other providers are seeking they have an absolute statutory right to get this at the this corrective as we saw in saratoga and those other in those other cases they exercise that right they went to the administrative process the result of the administrative process was that look we can't grant you the relief you're going to have to go to court to get that relief and so where are these of these following that statutory right the these hospitals are asking to be paid in accordance with the correct facts that are in rec so the so the the secretary argues makes a series of arguments the st one is that there's no relief because of these thing correct waging that x and that there are the budget neutrality retroactivity all of these issues but as we discussed and as a terry stipulated in that saratoga case that there are in fact can be corrections that are made to providers who are prejudiced by an incorrectly low wage index and a wage and excess and have to be calculated what has to be done is calculate how much would be would have been paid if the correct way jets in the wage inject had been used and then make that payment to the to the to the to the providers no case no cases ever held that hospitals under these circumstances are not entitled when asked about discretion the secretary not only has disc full discretion to correct these payments the secretary even adopted in the recent comment will making saying how he would exercise that discretion under one particular circumstances never suggesting for a moment that the secretary couldn't exercise discretion under other circumstances as well the secretary also argues here that there's no relief because one hospital cannot challenge another hospital's wage data you see and we believe that that's a red herring because we're not challenging hendrick's wage data we're challenging the secretary for relying on incorrect wage data the secretary has hendricks wadeye the wage data they don't need these providers to correct that the secretary knows what the correct wage data is and that payment should be made in accordance with that with the correct data the secretary then or accuse that that the wage data is not required to be perfect some of course we did make that argument but the secretary goes on to admit that the secretary is required to use the best available data well here there's no question aren't that the exercise neutral effect your argument i don't think the budget with the what's what the secretary is required by statute when it when it and when it adopts that final rule containing the wage index under that thing has to be budget neutral and so from the proposed rule to the fin rule if one wage area goes up another wage area has to come down to make that budget neutral that is under him sorry to be so technical but that's under the prospect of payment system statute there's a separate statute that gives hospitals the right to get paid properly by medicare and that's statutory right is not limited there's nothing in the prospective payments that you that limits the absolute right of hospitals to be paid correctly and that's the nature of the so we don't believe the effects  like saratoga for example there's been money allocated to that it's not going to go on the other hand they could be a hospital that opens on eleven and they have a what we do here they're entitled to it so the fact that they were kind of adjustments after the fact especially in ansan the four providers them of the total  six hundred and fifty thousand dollars out of like i said one hundred and ten billion dollar program so these kind of fine tuning cs kind of exceptions that happened after the fact have been have been recognized now they talk about you know the counselor the secretary talked about that bay state franklin case and that's an interesting case because it was one hundred and nineteen million dollars at stake and that's going to be a significant sum of money but but number one dollar i don't believe there's any case law that says there has to be a greek visit to the wage index but in that case they were claiming the wage index was wrong because the policies were wrong here the wage index was wrong because the secretary used knowingly incorrect information when the secretary had the correct information that's the distinguishing factor for the for this case the secretary also argues that somehow the hendrick medical centers you know lack of a view of the may nd wage data prevents the ensign providers from available data because available data at the time that the secretary the pair that wage index they had the correct answer the secretary had the correct information but the knowingly used incorrect information now the lower court  again didn't provide a whole lot of background or explanation for its decision but it is the the lower court held that the providers are seeking belatedly to correct pendry to data but we don't think that's what's going on here and and because  the problem here is that is that the hospital providers here are not trying to correct the data the secretary already has the data and so the district courts reliance on the wage data correction process we believe is improper under these circumstances evidence and we believe that that is that the record of the case shows that the substantial evidence that's in the record in fact the only evidence that's in the record about hendrik medical center is the correct information that was that the parties agreed to back in march decision but in that case what you had where you had a group of hospitals that were challenging the boundaries that the secretary used to identify and identify the wage areas and the and the court was concerned in that case that the that the wage unilateral mac and rd of all it doesn't address the a p a question about a payment not being consistent with the substantial evidence of the record and that's why we we refer the th in the court is that now in the bay state franklin case that the d c circu grappling with itself it will it has to deal with this this question of what happens when payments are made based on incorrect information so i know i have a few more moments your honour's but if there are no questions for me at this time i would to save my remaining time from above please the court lines terry parker and i represent the secretary of the nd set of appeals involving the ensign providers conspicuously missing from both the briefs and from counsel's argument here before this court is the question of what deference is owed to the secretary during what every court from the district court to the supreme court and what this court here today has noted is a labrat program that is very complex it's very regulated it involves a lot of data and a lot of information and courts as from the district court to the supreme court have noted that the secretary's afforded a flawed discretion and administ program in so far as congress did not directly speak on the precise issue that is at issue in the case and in this case there is no question that congress did not speak to the precise issue of how the secretary was to conduct a survey to obtain the information used to calculate the wage indians in this case what congress told the secretary was to collect this information from it by a survey and to use a factor to reflect the relative hospital wage levels and to do that there was no further guidance provided by congress therefore the secretary had discretion in creating a the once the data is published that these are the rates and the figures that we're going to use in other words like on may nd once that information is published how can another provider such as the claimants in this part of the appeal verify that they got the calculation is acceptable and correct in other words how would they know that in this case hendrik hendrix data was not either was incorrect or the correct data was not used with the is there enough there for them to have at that time objected i would answer that your honor by saying there's no expectation that other hospitals because remember this data is use not just for this geographic area but it effects the wage index for the entire country so there's no expectation by the secretary that other providers would know that there's an error in there there are ways especially if you're all the same geographic area then you would likely have some idea of what the general wages are you know what are the fringe benefits that are being offered where you're paying contractors so there's a generalized knowledge but the secretary's not suggesting that each hospital other than an individual hospital is required to look at that data and know that there is something wrong but where the secretary reasonably exercised her discretion is that the secretary put the burden on the hospital who would be in the best position to know whether that data was accurate the burden is placed on the hospital who provides that data to not look at the country or not even look at the geographic area but you know your data you look at your data and you've been told that you're required to do that since the one thousand nine hundred and ninety seven of this procedure was adopted i understand that as an argument insofar as hendrick is concerned that even if they did provide subsequently the correct data they could look at the number and say oh you you used the wrong data we previously submitted you need to use the data that we then corrected and timely submitted in this part of the appeal as i understand it there are providers who aren't privy to hendricks data they just look at a number i mean how would they be on notice that gee this number is is low because of a mistake made by the secretary or one of the contractors they would not be on notice they would not but the secretary haas to create a system that it can reasonably administer in a timely fashion it has created a system that in our view best protects the rights of all of the hospitals by placing the burden on the individual hospitals to check their data the system the secretary has created a system that provides protections for rd party hospitals that's a reasonable exercise of her of the secretary's discretion no no hospitals cannot go in and see that there was a data in the system but the system itself is designed to protect all parties by again placing the burden on the person who would know hinder it would know that their data was incorrect hindrance has been according to that website last checked about a week ago they've been in business for ninety one years this process of checking your data and this understanding that you could not correct it if you did not meet the deadlines has been in process since one thousand nine hundred and ninety seven the protections for other hospitals were put into this system in a way that the secretary could easily administer it e requiring the hospitals to make a final check that is the protection for the rd party hospitals not an expectation that they will look at those numbers and know that there's an error you say basically that there's a community of interest that every hospital check to make certain that it's correct data is used for primarily for its benefit prefer everybody else's as well that's exactly right and there are several cases that are cited in the brief where they note that it is in the hospitals own self interest to make sure that its data is correct that's noted in southeastern alabama medical center it's noted noted also i think in the bay state decision the hot the secretary rel mind although that it's wage index sounds so simple it's a very complex system they are collecting data from thousands of hospitals and thousands of points of data what they're paying their employees what they're playing the finality in the system they could not create the perspective wage with any phonology because people kept coming in say there are errors here so they created the system it is a reasonable system design that takes into account all of the relevant factors and has created something that hat can do it actually here to the system again that had been in place since one thousand and ninety seven would have prevented this but the fact that there is harsh result in this case and that hendrick did not look and that has adversely affected the ensign providers the harsh result does not make the system the secretary's process capricious the secretary relied on data that was in the public use speil that had been made available for review and that no provider had challenged it was reasonable for the secretary contemplated by the by the secretary in all of them varies millions of data point there could be an error that was understood and the secretary created a system that would allow for those errors to be protected before they became fights your best th circuit case for the proposition not that a provider can't cannot contest the data submitted by another hospital and its correctness but rather as in this case the correct data was submitted but not utilized by the secretary and so you're saying what i'm asking what is your best case  circuit case that precludes a provider from content from contesting the secretary's actions in not using the correct data and no th circuit case for that pop is that the best i can do is refer to the in a jots decision where they talk about the fact that the system as large as it is does require does allow the nd secretary to sacrifice absolute perception begin with decision of the importance of having this finale in the bay state case the error was noted the error in the in the numbers was noted before the final publication that's different here here we had already the secretary already finally published the ringback wage index when the error was brought to the secretary's attention but in the bay state case the error was brought to their attention prior to the final publication of the rule and yet as the court noted failure to comply with the procedures in place to have objected to the numbers in a reasonable time frame precluded the re that is the case that we would ask the court to look for and the decision there is the decision that we would ask this court to reach in this case those deadlines matter having a settled index wage index communication about the error in the numbers began i believe in december gone in december so it was a six month wait yes yes aro again the system as it's created was a reasonable exercise of the secretary's discretion it is an era of system it provides several opportunities for errors to be noticed  and for errors to be corrected to ensure for now and when that final wage was published that system cannot a system is also not created to allow  parties to come in and challenge the data in this case we have a small group of hospitals that are challenging the data and what they would say is that this is a small issue and it's very limited and we should be allowed to make this challenge because there was an error that the hospital did not correct but quite honestly any hospital in the nation at the court is to allow rd parties to come in and challenge a final rate because a single hospital did not take advantage of the opportunity to review and correct the data process when you're in a subject of the weakest link in the chain i would disagree on it i would say that the strongest link is a hospital who is although the incident providers argue that we're not seeking to correct the hendrix data that's exactly what they're doing the data was put out in the mail in the may f for hindering to correct or to review the data and correct it if it needed to be corrected hindoo it did not do that and so the secretary relied on the data in that file that had not been challenged errors and that hospitals data and the hospital does not respond then what the secretary does in that situation is it reaches out to the hospital association for that and that argument what you have here though is that you do have support the process three to support the process yes your honor in no system of this size and this scale in this magnitude will there not be errors will there not be on occasion  harsh result i think that's true even in court when we have deadlines and statutes of limitations and sometimes those deadlines in statute of limitations lead to harsh results you know if you don't come to the court within a certain amount of time if you don't conduct the discovery in a case that you feel is necessary but you don't meet the deadlines of the district court judge you don't get that information the deadlines are important and they can the secretary in its discretion can't allow an error of this magnitude to stand because the system it's created was almost  has thrown out a number of about two million dollars the secretary has not calculated those those numbers two million dollars for the entire system or for that is for hinting that the number they were throw entire system well this i think the total number you're on and i'm going to ask bob it a lot of shit in this because i'm not certain i think the total number is somewhere in that two point five to two million seven  to yes it will completely destroy all finale because it's not just this hospital it's every possible that wants to come in and challenge the wage index or perhaps challenge the another case where the secretary's agent made an error that the secretary wouldn't correct so i think that from our perspective the ripple effect a dangerous ripple effect is the other way around that secretary will then be emboldened that more and more errors can be made by its own a lot of the legion don't argue we don't have the specifics of your case because we have the determination of exhaustion jurisdiction its center and that's the issue we have not correct and we're not error correcting so we're not corrected to mean i mean the issue before us was the exhaustion jurisdictional legal issues so they are you there you know as i asked in the other piece of we reverse it's not a matter of saying we think it's unfair you didn't get the two main it's saying that agency of the court and can as we said to the the unusual situation here is the unilateral macca error and that we believe that this court should hold should hold the secretary accountable for the errors by a biased contractor i i agree entirely and are not in charge of this the distinguishing factors that didn't involve the wage data correction process that challenge to the question a challenge to the very way the secretary determines wage areas which is something that  frankly goes to the matter of what the secretary actually has to do with the wage index as opposed to here we have a it there we have a contractor everett so but thank you for your attention if the court has no further questions