In the

United States Court of Appeals

For the Seventh Circuit

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No. 03-1745

EDGEWATER FOUNDATION,

Plaintiff-Appellant,

v.

TOMMY G. THOMPSON, Secretary of

Health and Human Services,

Defendant-Appellee.

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Appeal from the United States District Court for the

Northern District of Illinois, Eastern Division.

No. 00 C 6600—Wayne R. Andersen, Judge.

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ARGUED OCTOBER 29, 2003—DECIDED DECEMBER 1, 2003

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Before FLAUM, Chief Judge, and EASTERBROOK and

KANNE, Circuit Judges.

EASTERBROOK, Circuit Judge. In January 1989

Edgewater Hospital, a Medicare provider, sold portions of

its operations to three successors: Edgewater Property Co.

bought the building; Edgewater Operating Co. bought the

equipment, records, and ongoing operations; and Peter

Rogan, the sole shareholder of these two firms, bought the

Hospital’s receivables. The old owner changed its name

from Edgewater Hospital, Inc., to Edgewater Foundation.

Sale of the business meant that accounts had to be settled

between the Hospital (and its successors) and the Medicare

program. After extended proceedings that it is unnecessary
2 No. 03-1745

to recount, the parties resolved most outstanding issues.

They agreed that Medicare owed the Hospital about $6.4

million as of the date the Hospital sold its assets and

operations, and that Edgewater Operating Co. owed the

Medicare program about $4 million for overpayments

received during 1989 and 1990. All obligations were offset,

and the Medicare program paid the balance.

Although the parties agreed on these numbers, they did

not agree on the calculation of interest under 42 U.S.C.

§1395g(d). Edgewater Foundation, as the Hospital’s successor (proceeding in this respect as Rogan’s proxy), claims an

entitlement to interest on the $6.4 million between January

1989 and the time the (net) payment of about $2.4 million

was made. As the Foundation sees things, it is distinct from

Edgewater Operating Co., so that overpayments after the

sale should not be set off against underpayments that

preceded the sale. The Administrator of the Health Care

Financing Administration (part of the Department of

Health and Human Services) made the final administrative

decision and determined that the Foundation and the

Operating Company are jointly and severally liable for

reimbursements of all overpayments, because the Medicare

program is entitled to treat a single hospital as one “provider” and to net all balances without regard to private

arrangements for the disposition of the proceeds. The

Administrator wrote: “Because the provider agreement was

automatically assigned to the new owner, the old and new

owner are jointly and severally liable for the overpayment.”

That conclusion cut off the Foundation’s demand for

interest, because the Medicare program paid the net

balance within 30 days of its ascertainment.

The Foundation filed this civil action under 42 U.S.C.

§1395oo(f)(1), contending that it is entitled to interest on

the $6.4 million that was due on account of events that

preceded the sale in January 1989. Instead of deciding
No. 03-1745 3

whether the Administrator had erred in netting this sum

against overpayments to the Operating Company during

1989 and 1990, the district court directed the agency to

determine whether the $6.4 million (which is, recall, a

figure on which all parties had agreed) had been correctly

calculated. In the judge’s view, if payment was excessive,

interest need not be added. The court remanded the matter

to the Department of Health and Human Services with

directions “to determine the following: 1) The legitimacy of

the valuations used as a basis for the reimbursement; 2)

The role of Peter Rogan in the transactions and the appropriateness of any payments ultimately made to him; and 3)

The payors and payees of all Medicare payments made after

the closing of the hospital regarding the ‘loss on sale’.”

Neither side had argued to the district court that any of

these matters is pertinent; no one had requested a remand.

One might have anticipated an appeal by the Administrator, on the ground that a district court lacks authority to

treat the bureaucracy as an ombudsman that may be

directed to inquire into whatever issues pique the judge’s

curiosity. Whether the $6.4 million settlement was correct

is neither here nor there; it had not been raised as an issue

in the litigation; and if the settlement was excessive, it is

not the kind of error for which any statute provides either

administrative or judicial review. The Health Care Financing Administration has duties prescribed by statutes and

regulations; looking behind the validity of settlements, and

determining who paid how much of the proceeds to whom,

are not among them. Courts are supposed to address the

parties’ actual disputes, rather than the disputes that

judges think the parties ought to have, and are supposed to

resolve administrative cases on the record. The Medicare

statute lacks any parallel to Sentence Six of 42 U.S.C.

§405(g), which authorizes remand of disability-benefits

matters to receive new evidence. (The sort of remand
4 No. 03-1745

ordered here would have been outside the scope of Sentence

Six in a disability-benefits proceeding anyway; the matters

specified for determination do not concern new evidence.)

Remands usually are not appealable, because they are not

“final” decisions; but remands that otherwise may escape

appellate review may be reviewable immediately. See

Sullivan v. Finkelstein, 496 U.S. 617 (1990); Travis v.

Sullivan, 985 F.2d 919 (7th Cir. 1993). From the agency’s

perspective, this may well be such an otherwise-unreviewable remand, as only the Foundation can seek

judicial review of the new administrative decision, and only

an immediate appeal could vindicate the agency’s interest

in avoiding pointless (if not ultra vires) administrative

proceedings. 

But the agency did not appeal and thus has accepted (and

is bound to comply with) the terms of the remand. The

appeal now before us was filed by the Foundation, which

contends that the inquiries the agency has been ordered to

conduct are legally irrelevant to its claim for interest. The

Foundation wants us to review the Administrator’s interest

decision directly, sparing the parties the need to conduct

unnecessary and potentially futile administrative proceedings. The problem, however, is that the statute places

review of the Administrator’s decisions in the district court,

not the court of appeals, and the district court has not

finished that task—indeed, has not begun it. The decision

asking the agency for more information is no more “final”

than is a decision requiring additional discovery, or denying

summary judgment and setting a case for trial. A litigant’s

belief that the discovery or trial is unnecessary—even

doomed, because the proceedings are infected by error—does not make the decision immediately appealable.

The district court has yet to decide whether the Foundation is entitled to interest. Once that decision has been

made—as it surely will be, once the agency has answered
No. 03-1745 5

the questions posed by the remand order—then the losing

side will be entitled to appeal. If the questions that the

district judge framed are not legally material, and the judge

nonetheless uses the answers to resolve the dispute about

interest, then the appeal from that final decision will

provide an opportunity for correction by this court.

According to the Foundation, however, a series of decisions by the Supreme Court about the finality of remands

in disability-benefits cases establishes that remands to

agencies are appealable. We have mentioned Finkelstein,

which offers the Foundation no comfort. It holds that a

remand is final when the main question will not recur after

the agency’s new decision. That cannot be said of this

dispute about interest. Unless the agency decides, in light

of its answers to the issues posed in the remand order, that

the Foundation is entitled to interest on the whole $6.4

million—exceedingly unlikely, given the nature of the

questions the judge framed and the reason why he asked

the agency to address them—the dispute will continue

and the Foundation can obtain review by filing an appropriate pleading in the district court. The other decisions are

Forney v. Apfel, 524 U.S. 266 (1998), and Shalala

v. Schaefer, 509 U.S. 292 (1993). These are based on

language in the Social Security Act specifying that particular decisions are final. See 42 U.S.C. §405(g), Sentence

Eight. The Court stated in Forney that “this statutory

language means what it says”. 524 U.S. at 269. There is no

comparable language in §1395oo. To the extent that

Finkelstein, Schaefer, and Forney can be generalized beyond

§405(g), we concluded in Perlman v. Swiss Bank Corp.

Disability Plan, 195 F.3d 975, 979 (7th Cir. 1999), that the

rule they establish is this: “If the district court finds that

the [administrative] decision was erroneous and enters a

judgment wrapping up the litigation, that decision is

appealable even if extra-judicial proceedings lie ahead; but

if the court postpones adjudication until after additional
6 No. 03-1745

evidence has been analyzed, then it has not made a final

decision.” In this suit the district court has postponed

adjudication until after additional evidence has been

analyzed. That is not a final decision.

That the district court ended its opinion with the line

“This is a final and appealable order” is regrettable. It all

but compelled the Foundation to take an immediate appeal,

lest it tempt the district judge to hold later that by inaction

the Foundation had given up its principal claim. Yet district

judges cannot determine the scope of appellate jurisdiction

or authorize appeals from interlocutory orders, other than

through the means provided by 28 U.S.C. §1292(b). This

proceeding does not warrant an interlocutory appeal under

that statute, however, and at all events the district judge

did not make the findings specified by §1292(b). Despite the

judge’s nomenclature, the suit has not been “terminated” in

the district court; it is apparent that the judge expects to

resume the proceedings after receiving the agency’s findings. Once the agency has made its findings, the Foundation should file an appropriate motion in the existing civil

action (No. 00 C 6600), and the district judge should make

a prompt decision so that this lingering dispute can at last

be concluded.

The appeal is dismissed for want of jurisdiction.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—12-1-03