United States Court of Appeals 

For the First Circuit 

No. 16-1731 

PARKVIEW ADVENTIST MEDICAL CENTER, 

Appellant, 

v. 

UNITED STATES OF AMERICA, on behalf of the Department of Health 

and Human Services, Centers for Medicare & Medicaid Services, 

Appellee. 

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF MAINE 

[Hon. Jon D. Levy, U.S. District Judge] 

Before 

Lynch, Stahl, and Barron, 

Circuit Judges. 

George J. Marcus, with whom Jennie L. Clegg, David C. Johnson, 

Andrew C. Helman, and Marcus Clegg were on brief, for appellant. 

Jeffrey Clair, with whom Benjamin C. Mizer, Principal Deputy 

Assistant Attorney General, Thomas E. Delahanty II, United States 

Attorney, and Michael S. Raab were on brief, for appellee. 

John A.E. Pottow and Asher Steinberg on brief as amicus 

curiae. 

November 29, 2016 
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LYNCH, Circuit Judge. This is an important case resting 

at the intersection of the Bankruptcy Code and Medicare law. It 

concerns the efforts of the Parkview Adventist Medical Center 

("Parkview") in Brunswick, Maine, which filed for bankruptcy on 

June 16, 2015, to use the Bankruptcy Code to challenge the actions 

of appellee United States, through the Centers for Medicare & 

Medicaid Services ("CMS"), in terminating its "Provider Agreement" 

with Parkview and declining to reimburse Parkview for certain 

services provided after the effective date of that termination. 

After receiving a letter from Parkview, CMS concluded 

that Parkview's Provider Agreement was to be terminated, because 

CMS found that Parkview was no longer a "hospital" under the 

Medicare statute. See 42 U.S.C. § 1395x(e)(1). An administrative 

law judge ("ALJ") has issued a determination upholding the 

termination but adjusting the effective date. 

 Both the bankruptcy court and the reviewing U.S. 

district court, see Parkview Adventist Med. Ctr. v. United States, 

No. 2:15–cv–00320–JDL, 2016 WL 3029947 (D. Me. May 25, 2016), 

denied Parkview's "Motion to Compel Post Petition Performance of 

Executory Contracts," which sought, inter alia, a 

"[d]etermin[ation] that the Termination Notice [from CMS] is null 

and void and that the Provider Agreement [governing Parkview's 

eligibility for Medicare reimbursement] remains in full force and 

effect." It also sought relief "requiring CMS to honor the terms 
- 3 - 

of the Provider Agreement and [to] reimburse [Parkview] for Part 

B Services provided by [Parkview] from and after June 18, 2015, in 

accordance with the terms of the Provider Agreement," as well as 

"such other and further relief as is just and equitable."1

In this motion, Parkview argued that the Provider 

Agreement was an "executory contract" under 11 U.S.C. § 365, and 

accordingly within the bankruptcy court's jurisdiction. As such, 

Parkview contended, CMS's termination of the Provider Agreement 

was "a post-petition termination . . . without court authority, 

and prior to the Debtor having exercised its right to assume or 

reject the Provider Agreement," in violation of "[11 U.S.C.] 

§§ 365, 362 and 525 of the Code." Parkview further argued that 

CMS's termination of the Provider Agreement violated (1) the 

"automatic stay" in 11 U.S.C. § 362(a)(3), which stays "any act to 

obtain possession of property of the estate or of property from 

the estate or to exercise control over property of the estate," 

and (2) the non-discrimination provision in 11 U.S.C. § 525(a), 

 1 At oral argument for this appeal, Parkview attempted to 

reframe the relief it sought. It claimed it was not seeking the 

continuation of any immediate payment, but rather the effective 

reinstatement of the Provider Agreement for the period from July 

5, 2015 to August 20, 2015. Parkview conceded at oral argument 

that, despite its claim that it was not seeking immediate payment, 

the reinstatement of the Provider Agreement for the stated period 

would lead to reimbursement payments totaling several million 

dollars. Later at oral argument, Parkview characterized the 

relief it seeks somewhat differently -- namely, as an annulment of 

CMS's termination letter. 
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which provides that governmental agencies may not revoke a license 

or a similar grant solely on account of a party's insolvency or 

the fact that a party has filed a bankruptcy petition. 

The bankruptcy court concluded that it lacked 

jurisdiction over the motion until Parkview's claims were 

administratively exhausted and that CMS had not violated either 

the automatic stay or the non-discrimination provision. The 

district court affirmed, reasoning that 42 U.S.C. §§ 405(g) and 

405(h) "[t]ogether . . . require the exhaustion of administrative 

remedies through the agency review process before judicial review 

takes place." Parkview, 2016 WL 3029947, at *5. Section 405(g)2

provides in part that: 

Any individual, after any final decision of the 

[Secretary] made after a hearing to which he was a party, 

irrespective of the amount in controversy, may obtain a 

review of such decision by a civil action commenced 

within sixty days after the mailing to him of notice of 

such decision or within such further time as the 

[Secretary] may allow. 

42 U.S.C. § 405(g). Section 405(h)3 further provides that: 

The findings and decision of the [Secretary] after a 

hearing shall be binding upon all individuals who were 

parties to such hearing. No findings of fact or 

decision of the [Secretary] shall be reviewed by any 

person, tribunal, or governmental agency except as 

herein provided. No action against the United States, 

the [Secretary], or any officer or employee thereof 

 2 Section 405(g) is made applicable to the Medicare 

statute via 42 U.S.C. § 1395ff(b)(1)(A). 

3 Section 405(h) is made applicable to the Medicare 

statute via 42 U.S.C. § 1395ii. 
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shall be brought under section 1331 or 1346 of Title 28 

to recover on any claim arising under this subchapter. 

42 U.S.C. § 405(h). The district court concluded that Parkview's 

claims arose under the Medicare statute and that the final sentence 

of § 405(h) bars bankruptcy jurisdiction over such 

administratively unexhausted claims. Parkview, 2016 WL 3029947, 

at *6–8. The district court also affirmed the bankruptcy court's 

holding that CMS had not violated the automatic stay, see 11 U.S.C. 

§ 362(a)(3), nor the non-discrimination provision, see 11 U.S.C. 

§ 525(a). Parkview, 2016 WL 3029947, at *8. 

We acknowledge that there is a circuit split on the lackof-jurisdiction holding pertaining to § 405(h), as described by 

the district court.4 As the district court correctly observed, 

the majority of circuits have adopted the view -- based on previous 

versions of the statute and its legislative history -- that even 

though § 405(h) specifically mentions a bar to jurisdiction under 

only 28 U.S.C. §§ 1331 (federal question jurisdiction) and 1346 

(jurisdiction when the United States is a defendant), its 

jurisdictional bar "applies to other grants of jurisdiction under 

Title 28, including bankruptcy jurisdiction under § 1334." 5 

 4 We also acknowledge the amicus brief of Professor John 

Pottow. As Professor Pottow himself recognizes, his brief 

presents arguments on the jurisdictional question not advanced by 

the parties, and generally "an amicus cannot introduce a new 

argument into a case." United States v. Sturm, Ruger & Co., Inc., 

84 F.3d 1, 6 (1st Cir. 1996). 

5 See In re Bayou Shores SNF, LLC, 828 F.3d 1297, 1314 
- 6 - 

Parkview, 2016 WL 3029947, at *5. Only the Ninth Circuit has 

clearly adopted a contrary position. See Do Sung Uhm v. Humana, 

Inc., 620 F.3d 1134, 1141 n.11 (9th Cir. 2010) (citing In re Town 

& Country Home Nursing Servs., Inc., 963 F.2d 1146, 1155 (9th Cir. 

1991)); cf. In re Univ. Med. Ctr., 973 F.2d 1065, 1073 (3d Cir. 

1992) (holding that § 405(h) did not preclude bankruptcy 

jurisdiction over an action to bar the offset of reimbursement of 

post-petition services against pre-petition overpayments because 

the claim did not "arise under" the Medicare statute). Rather 

than add our voice to the circuit split on this difficult issue, 

we choose to resolve this case on narrower grounds evident from 

the record.6 We affirm. 

 

(11th Cir. 2016) (concluding that § 405(h)'s jurisdictional bar 

applies to 28 U.S.C. § 1344); Nichole Med. Equip. & Supply, Inc. 

v. TriCenturion, Inc., 694 F.3d 340, 346–47 (3d Cir. 2012) 

(concluding that § 405(h) "continues to bar virtually all grants 

of jurisdiction under Title 28," and holding specifically that it 

bars diversity jurisdiction under 28 U.S.C. § 1332); Midland 

Psychiatric Assocs., Inc. v. United States, 145 F.3d 1000, 1004 

(8th Cir. 1998) (holding that § 405(h)'s jurisdictional bar 

applies to 28 U.S.C. § 1332); Bodimetric Health Servs., Inc. v. 

Aetna Life & Cas., 903 F.2d 480, 488–90 (7th Cir. 1990) (same). 

6 Parkview argues that we already decided in In re Slater 

Health Center, Inc., 398 F.3d 98 (1st Cir. 2005), that § 405 does 

not bar bankruptcy jurisdiction. But Slater said nothing about 

this jurisdictional issue, and "[w]hen a potential jurisdictional 

defect is neither noted nor discussed in a federal decision, the 

decision does not stand for the proposition that no defect 

existed." Ariz. Christian Sch. Tuition Org. v. Winn, 131 S. Ct. 

1436, 1448 (2011). Slater does not settle the question. 
- 7 - 

Since only statutory jurisdiction is at stake in the 

§ 405(h) jurisdictional question and not Article III jurisdiction, 

we assume hypothetical jurisdiction. We have done so before when 

confronted with the same § 405(h) question, and we do so again 

here, because of the difficulty of the jurisdictional issue and 

because Parkview's merits claims under the Bankruptcy Code 

obviously fail. See In re Ludlow Hosp. Soc., Inc., 124 F.3d 22, 25 

n.7 (1st Cir. 1997) ("As the [§ 405(h)] jurisdictional question is 

problematic, and the merits of the Trustee's appeal are not, we 

elect to bypass the jurisdictional issue at this time." (citations 

omitted)).7 

Assuming arguendo that this case arises under the 

Bankruptcy Code, we affirm the denial of relief to Parkview. We 

do so because the record is clear that CMS did not violate the 

automatic stay provision. The statutory "police and regulatory 

power" exception to the automatic stay under 11 U.S.C. § 362(b)(4) 

plainly applies. It follows, then, for this and other reasons, 

that the non-discrimination provision of the Code is not offended. 

 7 See also, e.g., Telles v. Lynch, 639 F. App'x 658, 659 

(1st Cir. 2016) (unpublished opinion) ("Because the petitioner's 

claims easily fail on the merits, we assume hypothetical 

jurisdiction."); Alvarado v. Holder, 743 F.3d 271, 276 (1st Cir. 

2014) ("[U]nlike Article III jurisdiction, which we may never 

dodge, we may occasionally bypass statutory jurisdiction."); McBee 

v. Delica Co., Ltd., 417 F.3d 107, 127 (1st Cir. 2005) (discussing 

appropriateness of bypassing jurisdictional question where Article 

III jurisdiction is not in doubt and merits claim clearly fails). 
- 8 - 

As to the arguments Parkview makes on appeal regarding the § 365 

executory contract provision of the Code, we find that Parkview's 

sparse briefing amounts to waiver of the issue.8 See Aponte v. 

Holder, 683 F.3d 6, 10 n.2 (1st Cir. 2012). 

I. 

 In the interests of brevity, we recite only the facts 

necessary to this opinion. Before its petition for bankruptcy, 

Parkview operated as a fifty-five-bed hospital in Brunswick, 

Maine. It "provided emergency services, inpatient services, and 

a variety of outpatient, ambulatory clinics and other medical 

services" to the community. It maintained a Provider Agreement 

with CMS that specified the conditions to which Parkview had to 

agree and adhere in order to participate in Medicare and receive 

reimbursements for both Part A (inpatient) and Part B (outpatient) 

services. See generally 42 U.S.C. §§ 1395cc(a)(1) (listing 

requirements of a Provider Agreement with a "provider of 

services"), 1395x(u) ("The term 'provider of services' means a 

hospital, critical access hospital, skilled nursing facility, 

comprehensive outpatient rehabilitation facility, home health 

agency, hospice program, or, for purposes of section 1395f(g) and 

section 1395n(e) of this title, a fund."), 1395x(e) (defining 

 8 This obviates the need to discuss the date of the 

termination. 
- 9 - 

"hospital" as an institution primarily engaged in providing 

specified inpatient services, and listing other conditions). 

 Parkview sent CMS a letter dated June 15, 2015, stating 

that Parkview was ending its participation in Medicare. The 

letter stated that Parkview would be filing a voluntary chapter 11 

petition on June 16, 2015 and that it would be "closing as a 

hospital effective upon the order of the Bankruptcy Court and will 

no longer participate in the Medicare Program . . . as an acute 

care hospital provider." It further stated that Parkview 

"expect[ed] the Bankruptcy Court to enter its order within sixty 

(60) to ninety (90) days of the date of this letter." Parkview 

would "begin to transition acute care services to Mid Coast 

Hospital beginning June 18, 2015," but would "continue to provide 

outpatient services." Parkview filed its voluntary chapter 11 

petition on June 16, 2015.9 

 In a letter dated June 19, 2015, CMS replied that it 

would terminate the Provider Agreement as of June 18, 2015: 

 9 The government argues that because "Parkview's plan of 

'reorganization' was, from the outset intended to liquidate all 

its assets, there is a substantial question as to whether this 

case was properly filed under chapter 11 rather than chapter 7." 

The question is significant, the government suggests, because 

under chapter 7, an executory contract that is not assumed within 

sixty days of the commencement of the bankruptcy is deemed 

rejected, an action the government contends Parkview "never had 

any intention of taking and had no practical ability to complete 

after selling its inpatient hospital assets." See 11 U.S.C. 

§ 365(d)(1). Because Parkview's legal arguments fail even if its 

chapter 11 petition was proper, we need not reach this argument. 
- 10 - 

Based upon information from your hospital's website, 

your statements to CMS, and your emergency motion filed 

in the District of Maine bankruptcy case 15-20442, CMS 

has determined that the date of voluntary termination of 

your Part A Medicare Provider Agreement is June 18, 2015. 

See 42 C.F.R. § 489.52(b)(1). 

According to the information reviewed by CMS, the 

hospital has closed its inpatient care services on June 

18, 2015, and discharged all inpatients on or about 

4:00pm on June 18, 2015. Additionally, the hospital is 

not accepting new inpatients, and does not plan to accept 

new inpatients in the future. Therefore, the hospital 

no longer meets the definition of "hospital," as 

outlined in Section § 1861(e) of the Social Security 

Act. See also 42 C.F.R. § 482.1. More specifically, a 

Medicare-participating hospital must be an institution 

which is primarily engaged in providing care to 

inpatients. Additionally, you have also requested 

voluntary termination of your participation in the 

Medicare program. 

Therefore, under the provisions of Federal regulations 

at 42 C.F.R. § 489.52(b)(1, 3), your Part A Medicare 

Provider Agreement with the Secretary of Health and 

Human Services is terminated, effective June 18, 2015. 

No payment under this agreement can be made under the 

Medicare program for services rendered on or after June 

18, 2015. 

 On June 19, 2015, the Maine Department of Health and 

Human Services "issued a conditional license for Parkview to 

operate outpatient services during the pendency of the bankruptcy 

proceedings," but "did not authorize Parkview to admit 

inpatients." Parkview then "informed CMS that it was not 

terminating the Provider Agreement and that CMS'[s] decision to 

terminate the agreement would adversely affect Parkview's 
- 11 - 

bankruptcy transition plan."10 In response, CMS stated that it 

would rescind the termination if Parkview resumed admission of 

inpatients. Parkview then filed its motion to compel in the 

bankruptcy court on July 9, 2015, and this litigation ensued.11

II. 

We turn to the merits of the claims Parkview has 

preserved for appeal. Parkview argues that CMS's termination of 

the Provider Agreement violates the Code's automatic stay. See 

11 U.S.C. § 362(a)(3). And it contends that the termination was 

an impermissible discrimination against a debtor in bankruptcy, 

within the meaning of 11 U.S.C. § 525(a). These claims raise 

 10 On July 27, 2015, Parkview informed CMS that it 

considered CMS's termination an involuntary termination "because 

CMS based the effective date of termination on Parkview's failure 

to meet a requirement to be a hospital in the Medicare program" 

and sought to rescind its notice of voluntary termination. 

11 On August 17, 2015, Parkview requested a hearing before 

an ALJ to dispute CMS's termination of the Provider Agreement. As 

already described above, the ALJ found, after briefing, that CMS 

had involuntarily terminated the Provider Agreement and that it 

had had a legitimate basis to do so, because Parkview had 

permanently closed its inpatient services on June 18, 2015. Due 

to the notice requirements of the relevant regulations, the ALJ 

adjusted the effective date of the termination to July 4, 2015. 

The ALJ also rejected Parkview's argument for equitable estoppel 

because CMS had allegedly provided -- through an employee of the 

Maine Department of Health and Human Services -- false information 

to Parkview while Parkview was preparing its transition plan for 

bankruptcy. 
- 12 - 

issues of law subject to de novo review. Barbosa v. Soloman, 235 

F.3d 31, 35 (1st Cir. 2000). Both arguments fail on the merits. 

A. Automatic Stay 

Parkview argues that CMS's termination of the Provider 

Agreement violated the automatic stay in § 362(a)(3). The statute 

provides that counterparties may not take "any act to obtain 

possession of property of the estate or of property from the estate 

or to exercise control over property of the estate." 11 U.S.C. 

§ 362(a)(3). Parkview contends that, because the Provider 

Agreement is an executory contract, CMS may not involuntarily 

terminate it. It cites a number of cases for the proposition that 

a counterparty may not involuntarily terminate an executory 

contract post-petition. See In re Mirant Corp., 440 F.3d 238, 

251–53 (5th Cir. 2006); In re Comput. Commc'ns, Inc., 824 F.2d 

725, 728–31 (9th Cir. 1987). 

The government does not dispute that the Provider 

Agreement is an executory contract within the meaning of the 

Bankruptcy Code. 12 But it contests on a number of grounds 

Parkview's assertion that the termination of the Provider 

 12 "The Bankruptcy Code furnishes no express definition of 

an executory contract, see 11 U.S.C. § 365(a) (1982 ed.), but the 

legislative history of § 365(a) indicates that Congress intended 

the term to mean a contract 'on which performance remains due to 

some extent on both sides.'" N.L.R.B. v. Bildisco & Bildisco, 465 

U.S. 513, 522 n.6 (1984) (quoting H.R. Rep. No. 95-595, p. 347 

(1977)). 
- 13 - 

Agreement violates § 362(a)(3). It argues that the Provider 

Agreement is not "property of the estate" under the meaning of 

§ 362(a)(3); that that automatic stay does not expand Parkview's 

contractual rights under the automatic stay, and that "Parkview 

. . . has never had a cognizable property or contractual interest 

in participating in Medicare without meeting Medicare's conditions 

of participation"; and that the automatic stay does not apply to 

the termination because it is a "nonfinal agency action[]." The 

government further asserts that even if Parkview had a property 

interest in the Provider Agreement and the stay applied on its 

face to the termination, the "police and regulatory power" 

exception to the stay in 11 U.S.C. § 362(b)(4) would apply.13 

Without reaching the other arguments, we agree that the police and 

regulatory power exception to the stay applies to CMS's termination 

of the Provider Agreement. 

The exception provision in § 362(b)(4) provides that the 

automatic stay of actions against the debtor does not apply to "an 

action or proceeding by a governmental unit . . . to enforce such 

governmental unit's . . . police and regulatory power." In turn, 

 13 Parkview also disputes the bankruptcy court's suggestion 

that CMS's termination of the Provider Agreement is exempt under 

11 U.S.C. § 362(b)(28), which allows the Secretary of Health and 

Human Services to exclude debtors from participating in Medicare 

in certain circumstances. Because the police and regulatory power 

exception applies and because the government does not argue for 

the "exclusion" exception, we do not reach this issue. 
- 14 - 

under In re McMullen, 386 F.3d 320, 325 (1st Cir. 2004), we make 

two inquiries. We ask whether the governmental action "is 

designed primarily to protect the public safety and welfare." Id. 

If so, the government action -- here the termination of the 

Provider Agreement -- is exempt. Id. But if the action is an 

attempt by the government to recover property from the estate, it 

has a pecuniary purpose and so remains subject to the stay. Id.; 

see also In re Nortel Networks, Inc., 669 F.3d 128, 140 (3d Cir. 

2011) ("If the purpose of the law is to promote public safety and 

welfare or to effectuate public policy, then the exception to the 

automatic stay applies. If, on the other hand, the purpose of the 

law is to protect the government's pecuniary interest in the 

debtor's property or primarily to adjudicate private rights, then 

the exception is inapplicable.") 

Parkview argues that the CMS termination was not based 

on findings of a threat to the health or safety of patients. The 

premise of this argument is true, but largely irrelevant, as it is 

based on too circumscribed a view of the public interest. Our 

precedents distinguish between "actions enforcing generally 

applicable regulatory laws governing the behavior of debtors," 

which fall within the exception, and actions by "government 

agencies to enforce contractual rights against debtors," which do 

not. In re Corporacion de Servicios Medicos Hospitalarios de 

Fajardo, 805 F.2d 440, 445 (1st Cir. 1986). The question is 
- 15 - 

whether CMS's termination enforces a generally applicable 

regulatory law or furthers a public policy interest beyond the 

contractual rights in the Provider Agreement. 

CMS has a strong public policy interest in seeing that 

Medicare-program dollars are not spent on institutions that fail 

to meet qualification standards. In this instance, the standards 

are those for "hospitals." See 42 U.S.C. § 1395l(t); 42 C.F.R. 

§ 419. Reimbursing Parkview pursuant to the Provider Agreement 

after it had taken actions to disqualify itself from the Medicare 

program, rendering it unable to provide services required by that 

program, would have been a waste of public monies.14 And unlike a 

dispute over a contractual agreement between the government and a 

single private party, such as the one at issue in In re 

Corporacion, applying the stay against CMS here would threaten 

CMS's ability to enforce generally the Medicare statute's 

carefully articulated regulatory structure. See In re 

 14 Parkview does not concede that it ceased to be a hospital 

under the Medicare statute. But the substantive correctness of 

CMS's determination that Parkview ceased to be a hospital under 

the Medicare statute does not affect the analysis of whether the 

police and regulatory power exception to the stay applies to the 

decision, nor does it affect the analysis of whether the decision 

was discriminatory under § 525(a). In any event, Parkview in its 

briefing makes a point of not contesting any substantive issue of 

Medicare law, including whether its actions disqualified it as a 

"hospital" under the relevant provisions, and so the point is 

waived. United States v. Richardson, 225 F.3d 46, 52 n.2 (1st 

Cir. 2000) (explaining that issues raised for the first time at 

oral argument are waived). 
- 16 - 

Corporacion, 805 F.2d at 445–46 & n.5 (contrasting actions to 

enforce contractual rights with actions "to enforce specific 

provisions of general regulatory schemes," and noting that the 

government had not tried to revoke the debtor hospital's license 

until after filing an action to rescind its contract with the 

hospital, as well as the fact that the hospital had passed a 

"Medicare compliance inspection"). The termination here was 

plainly the exercise of a regulatory power provided in the Medicare 

statute. See 14 U.S.C. § 1395cc(b)(2)(B) (explaining that the 

Secretary may terminate a Provider Agreement when the provider 

"fails substantially to meet the applicable provisions of section 

1395x of this title," which includes the statutory definition of 

"hospital"). 

Further, it is clear that the termination of the Provider 

Agreement does not meet the pecuniary test. The government is not 

seeking recovery from Parkview, nor is it demanding any payment. 

Rather, one could reasonably view Parkview's petition as being 

made for the purpose of evading CMS's efforts to secure compliance 

with the Medicare statute -- exactly the kind of action the police 

and regulatory power exception is meant to prevent. See In re 

McMullen, 386 F.3d at 324-25. Because CMS's termination of the 

Provider Agreement enforced the generally applicable framework of 

the Medicare statute and advanced a significant public policy 
- 17 - 

interest, the police and regulatory power exception applies, and 

the automatic stay does not bar the termination. 

We do not reach the other arguments raised by the 

government as to the stay's application. 

B. Non-Discrimination Provision 

Parkview also argues that CMS's termination of the 

Provider Agreement violates the "non-discrimination" provision in 

11 U.S.C. § 525(a), which states that: 

[A] governmental unit may not deny, revoke, suspend, or 

refuse to renew a license, permit, charter, franchise, 

or other similar grant to, condition such a grant to, 

[or] discriminate with respect to such a grant against, 

. . . a person that is or has been a debtor under this 

title. 

11 U.S.C. § 525(a). Parkview argues that, because CMS's 

termination letter "came only two days after Parkview filed its 

chapter 11 petition and expressly stated that CMS's termination of 

the Provider Agreement followed CMS's review of court filings in 

this chapter 11 case," we should conclude that CMS terminated the 

Provider Agreement because of Parkview's insolvency. 

We see nothing in the termination decision that depended 

upon Parkview's insolvency or bankruptcy petition. CMS stated in 

its June 19 letter that it was terminating the Provider Agreement 

because Parkview had decided to close its inpatient facilities and 

thereby had ceased to qualify as a hospital under the Medicare 
- 18 - 

statute. That termination decision involved no forbidden 

discrimination based on insolvency. 

Parkview's argument that CMS discriminated against it, 

because CMS took notice of the filing of the bankruptcy petition 

in its termination decision, fails on its face. That CMS used 

information from that filing in considering the termination 

question is admirable and not discrimination.15

CMS's termination of the Provider Agreement is 

distinguishable from the cases Parkview cites in its favor. In 

In re Psychotherapy & Counseling Center, Inc., the Department of 

Health and Human Services ("HHS") attempted to exclude a mental 

health hospital from participation in Medicare and state health 

care programs after the hospital defaulted under a settlement plan 

with HHS and filed for chapter 11 bankruptcy. 195 B.R. 522, 524–

27 (Bankr. D.D.C. 1996). The bankruptcy court rejected HHS's 

argument that the police and regulatory power exception applied 

 15 Parkview claims that "CMS did not base its termination 

decision on any order of the Bankruptcy Court, any deficiency in 

the provision of services by Parkview, or any claimed breach of 

the provisions of the Provider Agreement itself." This assertion 

seems intended to suggest that CMS had no basis for its decision 

other than the fact of Parkview's filing for bankruptcy. CMS may 

not have based its decision on an order by the bankruptcy court, 

but it did consult Parkview's papers in the bankruptcy court to 

determine the termination date for the Provider Agreement. And 

CMS did base its termination decision on Parkview's decision to 

cease inpatient services, which is clearly a "deficiency in the 

provision of services" with respect to the Medicare statute, as 

well as a clear breach of the Provider Agreement. 
- 19 - 

and concluded that HHS's action violated § 525(a) because the 

record suggested that "HHS [was] seeking to exclude the debtor 

from a government program for non-payment of a dischargeable 

prepetition debt." Id. at 533. There is no basis for such an 

inference here. Quite the opposite -- CMS has maintained 

throughout this litigation that its reason for terminating the 

Provider Agreement was Parkview's decision, announced in its June 

15 letter, to disqualify itself as a hospital under the Medicare 

statute, and there is no evidence to the contrary. 

Similarly, in In re Sun Healthcare Group, Inc., the 

Health Care Financing Administration ("HCFA"), a division of HHS, 

refused to reinstate the subsidiary of a debtor corporation as a 

Medicare and Medicaid participant, even after the subsidiary had 

"met all compliance conditions and applied for reinstatement," 

because the subsidiary owed pre-petition debts to HCFA. No. 00-

986-GMS, 2002 WL 2018868, at *1 (D. Del. Sept. 4, 2002). The 

district court affirmed the bankruptcy court's finding that HCFA's 

action had violated § 525(a) because, although the subsidiary had 

"provided reasonable assurance that its health services w[ould] 

meet HCFA regulations," it had discriminated against the debtor on 

account of its pre-petition debts. Id. at *7-8. Here, the 

termination had nothing to do with Parkview's pre-petition debts, 

and Parkview cannot assure CMS that Parkview will bring itself 
- 20 - 

back into compliance with the Medicare statute. CMS's termination 

of the Provider Agreement was not impermissible discrimination.16

III. 

 The district court's denial of relief is affirmed.17 Costs 

are awarded against Parkview. 

 16 As part of its discrimination argument, Parkview notes 

that CMS's termination decision led to the State of Maine's 

termination of Parkview's MaineCare Provider Agreement and that 

CMS's termination of the Medicare Provider Agreement will also 

terminate Parkview's Medicare Advantage Agreement and TriCare 

Agreement. These consequences of CMS's termination decision say 

nothing about the legal question of whether the decision was 

discriminatory under § 525(a). 

17 To be clear, the government has represented that 

physicians at Parkview's remaining facilities may seek Medicare 

Part B reimbursement for non-hospital outpatient services.