Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-4_05-cv-00495/USCOURTS-azd-4_05-cv-00495-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 42:1395 HHS: Adverse Reimbursement Review

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

UNIVERSITY MEDICAL CENTER

CORPORATION

Plaintiff, 

vs.

MICHAEL O. LEAVITT, 

Defendant. 

)

)

)

)

)

)

)

)

)

)

)

No. CV 05-0495-TUC-JMR-(BPV)

REPORT AND RECOMMENDATION

Pending before the court are cross motions for summary judgment pursuant to

Fed. R.Civ.P. 56(b) and Rule 56.1 of this Court filed by the plaintiff, University

Medical Center Corporation, and the defendant, Michael O. Leavitt, Secretary of the

Department of Health and Human Services. The motions are fully briefed and ripe for

disposition. 

On September 22, 2005, this case was randomly referred to Magistrate Judge

Bernardo P. Velasco. On November 15, 2006, the Magistrate Judge heard oral

argument on the cross motions. (Document #'s 19, 23). There being no genuine issue

as to any material fact, for reasons which follow, the Magistrate Judge recommends that

the District Court DENY Defendant's Motion for Summary Judgment and GRANT

Plaintiff University Medical Center Corporation's Cross-Motion for Summary

Judgment. 

BACKGROUND

This civil action arises out of Defendant's failure to reimburse Plaintiff amounts

due under the Medicare program of the Social Security Act, 42 U.S.C. § 1395 et seq.,

as determined by a “proxy” formula add-on to the prospective payment system, for the

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 1 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

1 Formerly known as the Health Care Financing Administration.

- 2 -

1998-1999 fiscal years. The amount in dispute relates to Plaintiff's indirect medical

education (“IME”) costs for the training of medical school graduates assigned to

participate in scholarly research. 

I. Governing Statutes and Regulations

Medicare is a federal health insurance program funded by the federal

government and established in 1965 to provide health insurance to the aged and

disabled. 42 U.S.C. § 1395 et seq. The United States Department of Health and Human

Services (“HHS”) administers the Medicare program through its component Centers for

Medicare and Medicaid Services1

 (“CMS”). Hospitals that provide services to

Medicare patients are reimbursed for their expenses under Title XVII of the Social

Security Act, 42 U.S.C. § 1395 et seq. Part A of the Medicare Act authorizes payment

to participating hospitals (“providers”) for their direct and indirect costs of providing

inpatient care to beneficiaries. 42 C.F.R. § 413.9(a), (b). Medicare also reimburses

teaching hospitals for the costs of graduate medical education, including physician time

for instructing and supervising interns and residents. 42 U.S.C. § 13952ww(h). 

Medicare services are furnished by “providers of services” that have entered into

provider agreements with the Secretary of the United States Department of Health and

Human Services. 42 U.S.C. § 1395x(u), 1395cc. To receive payment from the

Secretary, providers are required to comply with the provider agreement, as well as all

Medicare statutes and regulations. 42 U.S.C. § 1395cc(b)(2). 

The Secretary contracts with fiscal intermediaries, such as Blue Cross Blue

Shield Association in the instant case, to audit the costs submitted by Medicare provider

hospitals and approve or disapprove Medicare reimbursement. See 42 U.S.C. § 1395h;

42 C.F.R. 405.902 (defining fiscal intermediary). 

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 2 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 3 -

A provider dissatisfied with the intermediary's final determination of total

reimbursement may file an appeal with the HHS's Provider Reimbursement Review

Board (“RRB”). 42 U.S.C. § 1395oo(a); 42 C.F.R. § 405.1835. The PRRB is

authorized to hold a hearing on the appeal and issue a decision. Id. A party may appeal

the PRRB's decision to the Secretary's delegate, the Administrator of CMS. 42 U.S.C.

§ 1395oo(f)(1); 42 C.F.R. 405.1875. If the CMS Administrator decides to review the

case, he or she may affirm, reverse, modify or remand the PRRB's decision. 42 C.F.R.

§ 405.1875. The final decision of the PRRB, or of the CMS Administrator if he or she

exercises the right of review, is subject to judicial review. 42 U.S.C. § 1395oo(f)(1).

From its inception, Medicare reimbursed hospitals for the actual costs of treating

Medicare patients, subject to a reasonable-cost limitation. The Medicare Act defines

“reasonable cost” as “the cost actually incurred,” less any costs “unnecessary in the

efficient delivery of needed health services.” 42 U.S.C. § 1395x(v)(1)(A). 

In 1983, Congress amended the Medicare Act and established a prospective

payment system for reimbursing inpatient operating costs of acute care hospitals. See

42 U.S.C. § 1395ww(d). Hospitals now are reimbursed on the basis of prospectively

determined national and regional rates for each discharge, rather than on the basis of

retrospectively determined reasonable costs incurred. Under this system, payment is

made at a predetermined rate for each hospital discharge, according to the patient's

diagnostic related group (“DRG”). Congress intended this method of payment to

encourage hospitals to increase efficiency. See H.R.Rep. No. 98-25, at 132 (1983),

reprinted in 1983 U.S.C.C.A.N. 219, 351. 

When Congress implemented the DRG system, it was concerned that those

payments would not adequately reimburse teaching hospitals because such hospitals

typically have higher costs per patient than non-teaching hospitals. S.Rep. No. 98-23,

at 52 (1983), reprinted in 1983 U.S.C.C.A.N. 143, 192; H.R.REp. No. 98-25, at 140

(1983), reprinted in 1983 U.S.C.C.A.N. 219, 359. Thus, the DRG payment–calculated

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 3 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 4 -

on average per-patient costs in a particular region–would not reflect teaching hospitals

increased expenses. The prior reimbursement system also had this problem because the

reasonable-cost limitations it used were similarly calculated, though not on a

prospective basis. Under the prior system, Congress had allowed adjustments to the

reasonable-cost limitations if a provider could show its increased costs were due to its

educational activities. Under the new system, Congress carried forward the policy of

paying teaching hospitals more, allowing their increased expenses to be separately

reimbursed by Medicare. Three types of increased costs were identified: direct medical

education (“DME”) expenses, capital expenses, and indirect medical education (“IME”)

expenses. DME expenses are expenses like residents' salaries–quantifiable expenses

directly related to teaching. Capital expenses are those expenses like depreciation and

rents. And IME expenses reflect the general inefficiencies associated with patient care

provided by residents and interns, including “the additional tests and procedures

ordered by residents as well as the extra demands placed on other staff as they

participate in the educational process.” Id. 

IME expenses are not easily quantified. So the Secretary created a formula to

calculate how much money teaching hospitals would get for IME expenses. That

formula–derived from a statistical analysis of teaching hospitals' costs compared to nonteaching hospitals' costs that takes into account the ration of residents and interns to

beds, 45 Fed.Reg. 21,584 (Apr. 1, 1980)–basically allows teaching hospitals to get a

payment that represents a fraction of their DRG revenue. For example, if the

Secretary's formula–which is now codified in 42 U.S.C. § 1395ww(d)(5)(B)–yields an

“indirect teaching adjustment factor” of .10, then a teaching hospital that has $10,000

of DRG revenue in a given cost reporting period (i.e., fiscal year) would get an

additional payment of $1,000 as reimbursement for IME expenses. 

In 2001, after the fiscal years at issue in this case, the Secretary promulgated a

regulation designed to “clarify” and remove confusion in the provider community,

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 4 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 5 -

regarding “whether the time that residents spend performing research is countable” for

purposes of IME adjustment. 66 Fed.Reg. 39,828, 39, 896 (Aug. 1, 2001). The rule

explicitly provides that, in isolating the “portion of the hospital subject to the

prospective payment system,” 42 C.F.R. § 412.105(f)(1)(ii)(a), and the “outpatient

department,” 42 C.F.R. § 412.105(f)(1)(ii)(B), the time spent by a resident in research

that is not associated with the treatment or diagnosis of a particular patient is not

countable.” 42 C.F.R. § 412.105(F)(1)(iii)(B). 

II. Factual and Procedural History

Plaintiff University Medical Center (“Plaintiff” or “Hospital”) is an acute-care,

non-profit hospital located in Tucson, Arizona. In affiliation with the University of

Arizona Health Sciences Center, the Hospital operates a graduate medical education

program for interns and residents in 37 specialties and subspecialty areas. The program

involves interns and residents in patient care and residents generally “rotate” through

a number of planned training areas in connection with their specialization area. The

Hospital participates in the federal governments Medicare program and submitted

Medicare cost reports for its 1998 and 1999 fiscal years (“FY”). 

The residency programs at issue in this case are approved by the Accreditation

Council for Graduate Medical Education (“ACGME”), an organization recognized by

the Center for Medicare & Medicaid Services (“CMS”) as an acceptable authority for

determining which graduate medical education programs are “approved” for purposes

of the Medicare program and the indirect medical education payment regulations. 

The ACGME generally requires that in order for a given residency program to

be “approved,” the program must ensure that residents and faculty participate in

“research and scholarly activity.” Residents in the Hospital's approved residency

program are required to participate in research activities in order to obtain their

specialty or subspecialty certifications. 

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 5 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 6 -

For purposes of completing its Medicare cost reports for FY 1998 and 1999, the

Hospital included the time spent by residents engaged in research and other scholarly

activities who were assigned to the Hospital when determining its resident count for

purposes of the IME calculation.

Blue Cross Blue Shield Association (“Association”) is the Hospital's fiscal

intermediary under a contract with the Secretary. In the region where the Hospital is

located, the Association subcontracted its Medicare payment administration duties to

Blue Cross Blue Shield of Arizona (“BCBSA”) (the Association” and BCBSA are

collectively referred to herein as the “Intermediary”).

After its audit, the Intermediary adjusted the Hospital's 1998 and 1999 FY IME

payments to reflect an exclusion of time spent by residents engaged in the research and

other scholarly activities portions of their approved residency programs from the IME

calculation. The Intermediary's justification for removing this time was that the

residents in research rotations were not “involved in usual patient care.” This

adjustment resulted in a loss of 10.06 full time equivalent (“FTE”) residents for 1998

and 4.96 FTE residents for 1999. The negative reimbursement impact of this

disallowance to the Hospital is approximately $428,626. 

The Hospital timely appealed its FY 1998 and 1999 cost reports to the Provider

Reimbursement Review Board (“PRRB”), appealing the Intermediary's disallowance

of resident time spent in research and other scholarly activities. After an in-person

hearing on January 15, 2005, the PRRB held in favor of the Hospital on this issue,

finding that the regulation for the relevant time period did not exclude resident research

time from the IME resident count, and did not require resident time be related to patient

care. The PRRB also stated that the 2001 amendment to the IME regulation purporting

to exclude non-patient care research time from the resident count “represents a change

in policy that cannot be applied retroactively to the subject 1998 and 1999 cost

reporting periods.” 

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 6 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 7 -

On June 7, 2005, the CMS administrator reversed the PRRB's decision. 

Having exhausted its administrative remedies, the Hospital timely appealed the

Administrator's final decision, pursuant to its rights under Section 1878(f) of the Social

Security Act and 42 C.F.R. § 405.1877. 

DISCUSSION

I. Plaintiff's Position

The historical purpose and design of the IME payment, together with the plain

language of the statute and applicable regulations, compel the legal conclusion that

residents in approved graduate medical education programs who are assigned to a

certain hospital must be included in that hospital's count of residents regardless of the

nature of their training activities. See 42 U.S.C. § 1395ww(d)(5)(B); 42 C.F.R. §

412.105(f)(1)(1998 &1999). 

II. Defendant's Position

The regulation that was in effect at the times relevant to this case limited the FTE

count to those hours where the student doctors were assigned to the “portion of the

hospital subject to the prospective payment system,” 42 C.F.R. § 412.105(f)(1)(ii)(A)

(1999), or to the “hospital outpatient department.” 42 C.F.R. §

412.105(f)(1)(ii)(B)(1999). Because assignment to the area of scholarly research does

not fall within either category, the “time spent by a resident in research that is not

associated with the treatment or diagnosis of a particular patient” could reasonably be

excluded from the FTE count, 42 C.F.R. § 412.105(f)(1)(iii)(B), as the regulations now

provide expressly. 

III. Standard of Review

The final decision of the Secretary is reviewed under the Administrative

Procedure Act (“APA”), 5 U.S.C. § 701 et seq. 42 U.S.C. § 1395oo(f)(1) (incorporating

the APA standard of review). Under the APA, the Secretary's decision is set aside if

it is arbitrary, capricious, an abuse of discretion, unsupported by substantial evidence,

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 7 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 8 -

or contrary to law. 5 U.S.C. § 706(2). See Pacific Coast Medical Enterprises v. Harris,

633 F.2d 123, 130 (9th Cir. 1980); Good Samaritan Hospital, Corvallis v. Mathews, 609

F.2d 949, 951 (9th Cir. 1979). 

An agency's construction of the statute it administers is generally governed by

Chevron U.S.A., Inc. v. Natural Res.Def. Council, Inc., 467 U.S. 837 (1984). First, the

court must review the agency's construction of the statute to determine if the intent of

Congress is clear, and, if so, give effect to the unambiguously expressed intent of

Congress. Chevron, 467 U.S. at 842-43. If the court determines that Congress has not

directly addressed the precise question at issue, the court must determine whether the

agency's interpretation is based on a permissible construction of the statute. Id. at 843.

Administrative interpretations which are contrary to clear congressional intent must be

rejected. Id at n.9. 

When reviewing the Secretary's construction of a Medicare statute under the

standard in Chevron, Id., the Court must defer to the Secretary's judgment unless the

statutory text “unambiguously forbids” his view or his interpretation “exceeds the

bounds of the permissible” for other reasons. Barnhart v. Walton, 535 U.S. 212, 218

(2002). To meet this test, the Secretary's reading “need not be the only reasonable one,”

Conn. Dep't of Income Maint. v. Heckler, 471 U.S. 524, 532 (1985), or even “the best

or most natural one by grammatical or other standards.” Pauley v. BethEnergy Mines,

Inc., 501 U.S. 680, 702 (1991). Rather, his construction is entitled to controlling weight

so long as it falls “within the bounds of reasonable interpretation.” Your Home Visiting

Nurse Servs., Inc. v. Shalala, 525 U.S. 449, 453 (1999). 

The task of a court reviewing the Secretary's reading of his own regulations “is

not to decide which among several competing interpretations best serves the regulatory

purpose,” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994), but rather “the

agency's interpretation must be given'controlling weight unless it is plainly erroneous

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 8 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 9 -

or inconsistent with the regulation.” Id. (quoting Bowles v. Seminole Rock & Sand

Col., 325 U.S. 410, 414 (1945)).

IV. Analysis

A. The Secretary's Decision and the Plain Language of the IME Regulation.

Plaintiff argues that Congress has spoken directly on this issue, given the plain

language of 42 U.S.C. § 1395ww(d)(5)(B), which dictates that "the Secretary shall

proved [the IME payment] in an amount computed in the same manner as the

adjustment for such costs under regulation in effect as of January 1, 1983," except as

modified by Congress. 

The Secretary has adopted regulations incorporating the various Congressional

IME enactments. The Secretary's regulations detail the steps necessary to calculate the

Congressionally mandated equation, which is summarized as follows:

[{1 + (R/B)}n -1] x c = "IME Adjustment Factor"

In the equation, "R" equals the hospital's full-time equivalent interns and residents; "B"

equals the number of the hospital's beds; "n" is the "teaching activity" factor of .405;

and "c" is an adjustment factor set by statute. See 42 U.S.C. § 1395ww(d)(5)(B)(ii).

In his regulations, the Secretary defines "n" as the "factor representing the effect

of teaching on inpatient operating costs . . . " 42 C.F.R. § 412.105(c). This teaching

activity factor is not applied to the costs of services but to the size of the residency

training program as measured by the resident to bed ratio.

The interpretation at issue is located at 42 C.F.R. § 412.105(f)(1), which states,

in relevant part:

(1) For cost reporting periods beginning on or after July 1, 1991, the count

of full-time equivalent resident for the purpose of determining the indirect medical

education adjustment is determined as follows:

(i) The resident must be enrolled in an approved teaching program.

...

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 9 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 10 -

(ii) In order to be counted, the resident must be assigned to one of the

following areas:

(A) The portion of the hospital subject to the prospective payment system.

(B) The outpatient department of the hospital. 

42 C.F.R. § 412.105(f)(1)(i)-(ii). In addition, "full time equivalent status is based on

the total time necessary to fill a residency slot." 

Plaintiff submits that the Hospital's residents met both of the regulatory

requirements for inclusion in the Hospital's IME FTE resident count: 1) The residents

were enrolled in approved teaching programs, and 2) The residents were "assigned to"

the PPS or outpatient departments of the hospital. 

Defendant argues that the authorizing statute cannot reasonably be construed as

prohibiting the Secretary from excluding scholarly research from the FTE count. As

of January 1, 1983, there were no regulations published in the CFR that established an

FTE count pursuant to 42 U.S.C. § 1395ww(a)(2) at all. So long as research time could

have been permissibly excluded from the FTE count used for purposes of the IME

adjustment applied under a reasonable construction of the old cost-limit regime, that

outcome is "within the bounds of reasonable interpretation" here. 

Defendant further argues that the language of the regulation requiring

assignment of interns or residents to a “portion of the hospital subject to the prospective

payment system,” 42 C.F.R. § 412.105(f)(1)(ii)(A)(1999) can plausibly read to exclude

assignment to the area of scholarly research for the reason that the costs of research are

not subject to being reimbursed by the prospective payment system. 

Defendant asserts that the issue in this case comes down to a question of what

it means to say that a resident or intern has been assigned to the “portion of the hospital

subject to the prospective payment system.” Defendant argues that “portion” means a

“share” or “a part of any whole, either separated from or integrated from or integrated

with it,” citing Random House Webster's Unabridged Dictionary 1507 (2d ed. 2001).

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 10 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 11 -

From this, it follows that the “portion” of the hospital, in turn, that is “subject to”

payment under “the prospective payment system” is that portion wherein, at any given

moment, “covered hospital inpatient services” are “furnished to beneficiaries.” 42

C.F.R. § 412.20(a). Thus, Defendant urges, the share of the hospital subject to PPS

logically excludes any portion wherein any activities other than the furnishing of

patient-care services are being conducted. 

Plaintiff argues that this regulation was properly analyzed by the court in

Riverside Methodist Hospital v. Thompson, 2003 U.S. Dist. LLEXIS 15163. The

Secretary's attempt to read a patient care requirement into the regulation was

specifically addressed and denied by the Southern District of Ohio in Riverside

Methodist. 2003 U.S.Dist. LEXIS at *14-15. 

Defendant submits that the decision in Riverside Methodist (on which the PRRB

relied) came to a contrary conclusion only by failing to follow its own line of reasoning

to its logical conclusion. Where the decision went wrong, Defendants argue, was in

failing to take the analysis one step further and examine what it means - in light of the

entire Medicare statutory and regulatory scheme developed over the last four decades

- for a resident to be said to be "assigned" to a "portion of the hospital subject to the

prospective payment system." When that analysis is undertaken, it becomes clear that

there was never any need for the Secretary to impose any additional requirement related

to "providing care for specific patients" in order to exclude research time from the FTE

count. The mistake made by the Riverside Methodist court was to assume, without

analysis, the very question that was in dispute: whether a student doctor is assigned to

a portion of the hospital subject to PPS or to the outpatient department when he is

assigned to the area of scholarly research. 

The Magistrate Judge agrees with the reasoning and decision of the District

Court in Riverside Methodist. The regulation is not ambiguous, and, when considered

in context with the historical intent of both the regulation and its governing statute, it

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 11 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 12 -

is evident that all time spent by residents in research and other scholarly activities while

they are “assigned to” the Hospital must be included when determining the Hospital's

resident count for purposes of calculating the IME payment. 

The Defendant's argument that the term “portion,” as used in the regulation,

implies a “direct patient care” requirement, is successfully refuted by the Ninth Circuit's

interpretation of a nearly identical regulation in Alhambra Hospital v. Thompson, 259

F.3d, 1071, 1073-75 (9th Cir. 2001). 

Further, it is clear from the plain meaning of the phrase “portion of the hospital

subject to the prospective payment system” in 42 C.F.R. § 412.105(f)(i), that the term

is geographic in nature. 

Thus, the Magistrate Judge finds that, the IME regulation being unambiguous,

the Secretary's interpretation in this instance is owed no deference. Thomas Jefferson,

512 U.S. at 512. 

B. Retroactivity and Rulemaking

Plaintiff submits that the Secretary has imposed substantive requirements upon

the Hospital in violation of the APA's rulemaking requirements by holding that only

time directly related to patient care can be included in the Hospital's FTE resident count.

Plaintiff also submits that the Secretary has retroactively applied the August 1,

2001 change in the IME regulation to the Hospital's 1998 and 1999 cost reports, in

violation of section 551 of the APA. 

As summarized by the Defendant in this case, if the Secretary has construed his

regulation permissibly, then he has not created any new substantive rule. If he has not

construed his regulation permissibly, then it does not matter whether the erroneous

reading is characterized as substantive or interpretive. The Plaintiff concedes that the

resolution of this issue is not necessary for a decision favorable to the Hospital in this

case. 

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 12 of 13
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 - 13 -

As the Magistrate Judge finds the Defendant has not construed his regulations

permissibly, a recommendation as to the retroactivity and rulemaking arguments is not

necessary to resolve the issue in this case. 

V. Recommendation

The Magistrate Judge recommends that the District Court, DENY Defendant's

Motion for Summary Judgment (Doc. No. 19.) and GRANT Plaintiff University

Medical Center Corporation's Cross-Motion for Summary Judgment (Doc. No. 23.) 

Pursuant to Title 28 U.S.C. § 636(b), any party may serve and file written

objections within 10 days of being served with a copy of this Report and

Recommendation. If objections are not timely filed, they may be deemed waived. If

objections are filed, the parties should use the following case number: CIV 05-495-

TUC-JMR.

DATED this 15th day of February, 2007.

Case 4:05-cv-00495-JMR Document 38 Filed 02/15/07 Page 13 of 13