Source: https://judicialview.com/Court-Cases/Health_Care/PAMC-Ltd.-v-Sebelius/29/602630
Timestamp: 2019-01-22 12:50:48
Document Index: 521518013

Matched Legal Cases: ['§ 1291', '§ 1395', '§ 1395', '§ 401', '§ 1395', '§ 405', '§ 1395', '§ 412', '§ 412', '§ 405', '§ 1395', '§ 706', '§ 405', '§ 1395', '§ 1395', '§ 1395', '§ 412', '§ 1331', '§ 1395', '§ 1395', '§ 701', '§ 501']

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PAMC, Ltd. v Sebelius
Case No. 12-56652 (C.A. 9, Apr. 8, 2014)
PAMC, Ltd., dba Pacific Alliance Medical Center, (PAMC) appeals the district court’s order affirming the decision of the Secretary of the Department of Health and Human Services (Secretary), which denied PAMC its full Medicare Annual Payment Update for the fiscal year 2009. PAMC had failed to make a timely submission of specified data under the Reporting Hospital Quality Data for Annual Payment Update (RHQDAPU) program, and the Centers for Medicare & Medicaid Services (CMS) reduced PAMC’s annual percentage increase by two percent as a result. The Provider Reimbursement Review Board (Board) upheld CMS’s decision, and the Secretary declined to review the Board’s decision. We affirm.
PAMC is a general acute care hospital that was a duly certified provider of inpatient hospital services under the Medicare program and participated in the RHQDAPU program. PAMC missed the deadline for submitting quality data regarding second-quarter discharges for the fiscal year 2007. The deadline was 11:59 p.m. CST on November 20, 2007. PAMC’s third-party vendor, Thomson Reuters (Thomson), which was responsible for submitting PAMC’s data, failed to do so until 12:27 p.m. CST on November 21, 2007. Both PAMC and Thomson acknowledged that PAMC’s failure to meet the deadline was Thomson’s fault. CMS notified PAMC that the failure to timely submit data would result in a two percent reduction of its market basket update.
PAMC filed a request for reconsideration with CMS, and contended that, among other things, it had been diligent, its filing was not very late, and any failure to meet the requirement should be excused because it was due to Thomson’s error. CMS denied the request on the basis that the failure to make a timely submission was due to vendor error, which is not a ground for reconsideration.
Judge(s): Ferdinand F. Fernandez
Related Categories: Administrative Law
Lloyd Bookman Hooper Lundy & Bookman PC
Tracy Jessner Hooper Lundy & Bookman PC
André Birotte Jr. U.S. Department of Justice
Stuart Delery U.S. Department of Justice
Stephanie Marcus U.S. Department of Justice
Mark Stern U.S. Department of Justice
deadline as arbitrary and capricious. especially is that true * necessary. hospitals responsible for cms’s own errors does not suggest submission standards was arbitrary or capricious. a. equitable relief stated that providers and others have contracts with the procedure act (apa), an agency’s decision may be reversed by the established deadlines.”). reconsideration request and meets the applicable amount-in- competing interpretations best serves the annual percentage update to their payments for inflation.3 we will discuss further, the department has always insisted the hospital disagrees with that determination, the hospital government.” rock island a. & l. r. co. v. united states, last day of a discharge quarter to submit is required in order for hospitals to receive the full market does not demonstrate that the discretion in question was secretaryof the department of health and human services’s 6 medicare statute nor agency regulations granted cms or the times, november 1, november 13, november 15, and pamc asserts that the board was required to apply equitable contract principles are inapplicable to the “statutory and if a hospital is dissatisfied with cms’s disposition of the john a. kronstadt, district judge, presiding “upon joining the medicare program, however, the hospitals pamc, ltd. v. sebelius2 responded to a suggestion that hospitals did not have interpretation unless an alternative reading is argument that the board erred by declining to apply the an exercise of equitable power; it would certainly seem that the deadline for submitting data is a square corner, but pamc, ltd. v. sebelius 11 congress had given the secretary broad authority to rigid timing requirement against it was too rhadamanthine, matter at issue.”7 pamc, a certified medicare provider, failed to make a hadpublished programproceduresin thefederalregisterand ct. 2381, 2386-87, 129 l. ed. 2d 405 (1994) (citations and and insists that the board erred when it refused to ameliorate v. controversyand time-limit requirements,it mayfile an appeal pamc’s failure to meet the deadline was thomson’s fault. but that does not give the board carte internal quotation marks omitted). “this broad deference is we agree with the board that it did not have independent substantial performance,to excuse its failure to submit timely designed to provide sufficient time for pursuant to 28 u.s.c. § 1291. the secretary,” its applicable annual percentage increase in short, pamc neither points to any contrary or 254 u.s. 141, 143, 41 s. ct. 55, 56, 65 l. ed. 188 (1920). as errors and submit corrections in advance of fernandez, circuit judge: sufficient timeframe for the vendor, hospital, e.g., united states v. bourseau, 531 f.3d 1159, 1162, admittedly applicable deadline — 11:59 p.m. cst on suit in the united states district court within sixty days. id. blanche. rather, as the regulations provide: summary* compliance doctrine does not apply in the medicare area, but update. offered an explanation for its decision that and argues, that this passage demonstrates that cms has to medicare reimbursement: thus, while it might seem harsh, we do not view the failure to submit the quarterly report on time yields a twenty- paper”). hospitals’ reports be submitted by the precise time specified. payment update (rhqdapu) program, and the centers for is in no way justified.” in fact, hundreds of other reports had ; at the very least, the the district court had jurisdiction pursuant to 28 u.s.c. inconsistent with the regulation. in other proceedings under this subpart, the board under the medicarestatute, 42 u.s.c. §§ 1395–1395kkk- provider has missed the applicable deadline through its own that authority, the secretary promulgated a regulation the secretary in a form and manner, and at a time, specified id. § 1395ww(b), (d). d.c. no. are not able to declare that the board’s decision to enforce the that: did. 232 f.3d 1031, 1035–36 (9th cir. 2000). as the supreme court has held regarding a hospital’s claim in exercising its authority to conduct determines that a hospital did not meet the statutory and data regarding second-quarter discharges for the fiscal year data, failed to do so until 12:27 p.m. cst on november 21, predicated on the successful submission of data to cms via board’s decision.1 importance of the requirement of timely submission is deadline and was ultimately responsible for the errors of its assuming arguendo that the contract doctrine of substantial by the secretary for purposes of this clause.”). pursuant to provider “in a form and manner, and at a time, specified by agency, or is so implausible that it could not pamc argues that the board should have used the stuart f. delery, acting assistant attorney general, andré words, we must defer to the secretary’s pamc bases its appeal on its claim that the department defendant-appellee. health and human services, to be cognizant of the long-standing view of the department (pamc) appeals the district court’s order affirming the filed april 8, 2014 described in § 401.108 of this subchapter. 1169–70 (9th cir. 2008); pac. coast med. enters. v. harris, see 42 u.s.c. § 1395oo(a). discussion borne out by the evidence in this case. the vendor for pamc and receive an providers’ services, and to educate consumers. see 69 fed. reconsideration. the board determined that pamc did not penalize a hospital for not presenting the data. but that is 5 under the authority of the administrator as kathleen sebelius, secretary of appeal from the united states district court congress delegated broad authority to the secretary to 2007. the deadline was 11:59 p.m. cst on november 20, data. that while states had “grant agreements” with the federal “the district court’s review of the [board’s] decision, and and need not go that far9 decision denying pamc, ltd., its full medicare annual under the rhqdapu program. see 42 u.s.c. doctrines into an area that is a complex statutory and under the pps was reduced by two percent. 42 u.s.c. results to hospitals. secretary to assure that it was collected, and imposed a in this area because they had agreements with the secretary: provider reimbursement review board (board) upheld and it has been given the power to provider.” this appeal followed. weight unless it is plainly erroneous or 782, 789 (9th cir. 2003). under the administrative l. ed. 2d 627 (2013) (declining to apply equitable tolling program. pamc missed the deadline for submitting quality pamc’s vendor admitted at one point, “the error on our part november 20). 1983); see also bennett v. ky. dep’t of educ., 470 u.s. 656, pamc sought review by the secretary, who declined to board); kaiser found. hosps., 649 f.3d at 1160 (declining to cir. 2011) (internal quotation marks omitted). birotte jr., united states attorney, mark b. stern and our past experience has indicated that the vast must comply with all the provisions of title arbitrary and capricious for cms to make an error that complied with the doctrine’s requirements. circumstances, nor otherwise demonstrates that the board pamc, ltd., dba pacific alliance medical center, intent at the time of the regulation’s appellant. 9 secretary reverses, affirms, or modifies that decision within contract doctrine of substantial performance to excuse flawed. in the first place, the fact that cms does not hold 2:11-cv-01373- the qio clinical warehouse by the established deadline.” reg. 47870, 48041 (aug. 18, 2006). “cms has not held a kaiser found. hosps. v. sebelius, 649 f.3d 1153, 1159 (9th accurate data . . . . we believe that this is a doubt the secretary established the board pursuant to a by the hospital’s contracted vendor, the § 405.1835(a). the board’s decision is final unless the board authority to award equitable relief where, as here, a data processing and communication errors a complex and highly technical regulatory program . . . .” id. had not substantially complied with the rhqdapu program are collected pursuant to the requirements of the rhqdapu the panel affirmed the district court’s order affirming the implementing the statutory provision4 medicare program and participated in the rhqdapu united states court of appeals cms, or the board, or the secretary benefit of the contract doctrine of substantial performance. sufficient time to comply by answering: lloyd a. bookman and tracy a. jessner, hooper, lundy & november 20, 2007. it claims a right to equitable relief or the agency’s interpretation of its own regulations. processing and communication. if the error is § 1395ww(b)(3)(b)(viii)(ii) (“each subsection (d) hospital 4 been submitted by that vendor at the proper time; the glitch through the prospective payment system2 decision of the secretary of the department of health and that reasoning follows the department’s long-standing november 20, 2007, deadline. jak-man the united states department of when we consider that the whole notion of importing contract validation processing, and would adversely and has published basis to cms, in the form and manner specified by cms, the without pointing to statutory or regulatory authority, percentage points.” 42 c.f.r. § 412.64(d)(2)(i)(b). thus, the runs counter to the evidence before the 42 c.f.r. § 412.64. to state “[m]oreover, the secretaryhas defined preciselywhat nothing like errors by a hospital or its agents. secondly, as (internal quotation marks omitted); see also cmty. hosp., did submit timely data for about 400 other hospitals. the contended that, among other things, it had been diligent, its would result in a two percent reduction of its market basket instructions in the federal register and on the qualitynet hospitals to meet all reporting requirements. partnership, dba pacific alliance hospital responsible for its own errors in data 73 fed. reg. 48434, 48618 (aug. 19, 2008). the agency’s that were clearly under the control of cms or medicare annual payment update for the fiscal year 2009. actually, it “is considered a major error.” the board went on thereunder, as well as cms rulings issued e.g., 70 fed. reg. 47278, 47421 (aug. 12, 2005) (“[t]he data 3 regulatory requirements for submission of quality data, and stephanie r. marcus, attorneys, appellate staff, civil pamc had failed to make a timely submission of specified 48597–99 (aug. 19, 2008). indication that the vast majority of hospitals do comply is (rhqdapu) program, and the centers for medicare & been prepared by court staff for the convenience of the reader. a timely manner before the quarterly the result by granting legal or equitable relief. we, however, the failure to make a timely submission was due to vendor acted arbitrarily and capriciously when it refused to excuse the board shall afford great weight to pamc’s failure to submit data at the proper time. again, we starting november 1, 2007, nineteen days before the our task is not to decide which among several in the vendor’s system could not be ascribed to cms, which reflected in the veryprecision of the deadline itself (here right comply, that does not mean that it is entitled to relief from the 42 c.f.r. § 405.1867. in that regard, the board was bound 633 f.2d 123, 125 n.1, 133–35 (9th cir. 1980). as the pass all of the edits and consistency checks required in the principles to time set by secretary for appealing to the the required rhqdapu data by the admittedly applicable counsel board was wise to be cautious about the doctrine and did not impact our ability to deliver timely validation expert testimony certified provider of inpatient hospital services under the secretary and was, thus, subject to a two percent reduction in result in delays in the quarterly cdac thomas jefferson univ. v. shalala, 512 u.s. 504, 512, 114 s. plaintiff-appellant, 91 l. ed. 1995 (1947); anaheim mem’l hosp. v. shalala, 130 f.3d 845, timely submission of specified data under the reporting 1, the department reimburses health care providers for thomson’s error. cms denied the request on the basis that for the ninth circuit policy, and rules of agency organization, basket update. specifically, the full market basket update is apply excusable neglect equitable analysis to board’s procedure, or practice established by cms. and the issues are now properly before us. medicare & medicaid services (cms) reduced pamc’s equitable relief, or the benefit of the contract doctrine of pamc, ltd. v. sebelius 15 bookman, p.c., los angeles, california, for plaintiff- equitable authority and so must the board. pamc’s logic is received a statutory entitlement, not a contractual right.” we affirm. became the final agency action subject to judicial review. data under the reporting hospital quality data for annual for publication 42 u.s.c. § 1395ww(d). drug, improvement, and modernization act of 2003, pub. l. argued and submitted before: ferdinand f. fernandez, susan p. graber, statutory directive,6 this summary constitutes no part of the opinion of the court. it has in so doing, pamc appears to have forgotten the aphorism: that it lacked authority to award pamc equitable relief reg. 48916, 49078 (aug. 11, 2004); 73 fed. reg. 48434, we should not8 pamc is a general acute care hospital that was a duly 669, 105 s. ct. 1544, 1552, 84 l. ed. 2d 590 (1985) (stating hospital quality data for annual payment update as already noted, that process was followed in this case, pamc sought review of the decision in the district court shall submit data on measures selected under this clause to human services (secretary), which denied pamc its full the secretary also created an administrative appeals should not “be construed most strongly against the drafter” performance was applicable, pamc had not substantially relief. and mary h. murguia, circuit judges. importance of time limits has, again, been emphasized: pamc filed a request for reconsideration with cms, and need for timely submission of data reports. as it has stated: pamc now seeks to make it round. it is not entitled to do so. pamc, ltd. v. sebelius8 human services actors, taken together, as the “department.” be ascribed to a difference in view or the essentially prevented the proper submission of data and then we do not agree. mem’l hosp. v. heckler, 706 f.2d 1130, 1136 (11th cir. the regulation provides that in the case of a judicial review of “any final decision of the board” by filing contract doctrine of substantial performance, and held that intended it to consider, entirely failed to have not yet been submitted (here pmac was called four case,” pamc’s claim failed. the board pointed out that the department has never deviated from its demand that medical center, pamc equitable relief and when it determined that pamc requirement should be excused because it was due to actuallysent pamc a number of alerts about the missing data implement the rhqdapu program and that the secretary congress mandated the collection of data, directed the b. substantial performance the substantial compliance standard can be considered in this errors that were clearly under the control of cms or its march 6, 2014—pasadena, california regulatory regime rather than on contract principles. see, the current data submission timeframe is hospitals are given 4½ months following the submission after the quarterly deadline would otherwise not in accordancewith law.” 5 u.s.c. § 706(2)(a). the board declared that even “[a]ssuming arguendo that data collection is mandated by the medicare prescription 42 c.f.r. § 405.1869(a); see also 42 u.s.c. § 1395oo(d). cms’s decision, and the secretary declined to review the own vendor. in addition, the board determined that even regulatory scheme is problematic. we have, on occasion, for each quarter must be submitted on time . . . . the full no. 12-56652 government and those had a “contractual aspect,” the defendant-appellee. pamc, ltd. v. sebelius16 submit its quality data within the timeframe specified by the interpretation must be given controlling fault or that of its vendor. the court also rejected pamc’s product of agency expertise. pamc, ltd. v. sebelius10 hospital “that does not submit quality data on a quarterly created the rhqdapu program for that purpose, and the pamc, ltd. v. sebelius 13 with the board. 42 u.s.c. § 1395oo(a); 42 c.f.r. antithetical decisions by the department under similar qio or other interested party to identify data 323 f.3d at 789–90. the board pointed out, even if cms has some discretion, that the data submission deadline. § 1395ww(b)(3)(b)(viii)(i)–(ii); 42 c.f.r. § 412.64(d)(2). 47130, 47359–61 (aug. 22, 2007). cms has not held a hospital responsible for 7 medicare reimbursement for inpatient hospital services “men must turn square corners when they deal with the § 1331 and 42 u.s.c. § 1395oo(f)(1). we have jurisdiction error, which is not a ground for reconsideration. deadline in question. nor does it mean, or even suggest, that pamc, ltd. v. sebelius 7 because pamc indisputablyhad failed to meet the applicable pamc, ltd. v. sebelius14 data that related to the quality of care furnished by the the relevant period in this case, if a provider did not submit pamc, ltd. v. sebelius12 hospital responsible for data processing and communication increase by two percent as a result. program should not be viewed like a “bilateral contract” and full annualpercentageincreaseis predicatedon the successful has established guidelines for reconsideration. see 71 fed. submission of data to cms via the qio clinical warehouse “[t]he data for each quarter must be submitted on time and while we do not question pamc’s good faith efforts to reg’l med. ctr., __ u.s. __, __, 133 s. ct. 817, 828–29, 184 pamc, ltd. v. sebelius 9 its annual payment update. the board observed that promulgate rules governing the submission of quality data regulatory purpose. rather, the agency’s relied on factors which congress has not 2007. both pamc and thomson acknowledged that annual payment updates will be based on the successful sixty days. 42 u.s.c. § 1395oo(f)(1). a hospital may seek opinion jurisdiction and standard of review ultimately, the issues before us are not unduly complex, board. after a hearing, the board affirmed cms’s denial of the program’s purposes are to give hospitals the incentive to consider an important aspect of the problem, nevertheless. pamc is of the opinion that enforcement of the 1 down to the very minute, 11:59 p.m. cst on november 20, interpretive rules, general statements of dismissal of case for “failure to timely submit a position 2007), and is further reflected in the care that cms takes as pamc’s late filing of the required rhqdapu data by the administrative procedure act, 5 u.s.c. §§ 701–706 . . . .” opinion by judge fernandez compelled by the regulation’s plain language disagree. or by other indications of the secretary’s hospital is held responsible. division, department of justice, washington, d.c., for submission.5 47130, 47365 (aug. 22, 2007). under this process, if cms act in an arbitrary and capricious manner when it ruled as it affirmed. we must give substantial deference to an cmty. hosp. of monterey peninsula v. thompson, 323 f.3d 71 fed. reg. 47870, 48041 (aug. 18, 2006). pamc argued, we will sometimes refer to all of these department of health and payment update for the fiscal year 2009. pamc, ltd. v. sebelius 5 of course, we review the district court’s decision de novo. moreover, five percent error rate for that year, which is not minor; the report on time was not due to cms’s error; rather, as see, e.g., 73 fed. reg. 48434, 48616–19 (aug. 19, 2008); 72 fed. reg. and contended that the board erred when it failed to grant pamc, ltd. v. sebelius6 majority of hospitals submit accurate data in (thomson), which was responsible for submitting pamc’s all the more warranted when, as here, the regulation concerns deadline. the panel rejected pamc’s claims to a right to regulatory relationship between hhs and a medicare but a brief tour of the legal and regulatory structure is “expanded to the board” itself. opinion services provided to medicare patients. cms is charged with 8 (internal quotation marks omitted)); cf. sebelius v. auburn in this case, there can be little doubt that the failure to file acted arbitrarily or capriciously when it denied equitable annual percentage increase by two percent as a result. the 2007. pamc’s third-party vendor, thomson reuters our de novo review of its decision, are governed by the on the qualitynet exchange website. the board explained may seek reconsideration from cms. id. but the secretary no. 108-173, § 501(b), 117 stat. 2066, 2289–90. those data background review the board’s decision. the board’s decision therefore report on quality measures they have used, to improve eleventh circuit court of appeals held when hospitals pamc, ltd. v. sebelius4 program. see 69 fed. reg. 28196, 28278 (may 18, 2004). principlesto amelioratetheconsequencesofpamc’s default. vendor, the hospital is held responsible.” id. for “affirm,modify, or reverse [cms’s] findings on each specific capriciously when it refused to excuse pamc’s late filing of government in this area, but our decisions have turned on the 2005). and before the deadline in issue here, cms submission deadline. . . . we believe that data complained of legislative impairment of their contract rights 849 (9th cir. 1997). requirements. the district court held that neither the the district court determined that the substantial pamc, ltd. v. sebelius 3 administering the medicare program. providers receive its contractors. however, cms does hold the clinical warehouse.” 70 fed. reg. 47278, 47421 (aug. 12, 2 contractors.” id. “if the error is by the hospital’s contracted exchange website setting forth the “form and manner”of data board’s adherence to the policy of strict compliance with a penalty on hospitals that did not comply. the secretary 71 fed. reg. 47870, 48032 (aug. 18, 2006). since then, the medicaid services reduced pamc’s annual percentage if it is “arbitrary, capricious, an abuse of discretion, or conclusion cms notified pamc that the failure to timely submit data the panel held the department did not act arbitrarily and pamc, ltd., a california limited promulgation. authority to grant equitable relief in these circumstances. no for the central district of california we can affirm it on any basis supported by the record. downs v. hoyt, submission of data to cms by the established deadline. see, applicable percentage change . . . is reduced . . . by 2 strict policy in this area. cms has been explicit about the filing was not very late, and any failure to meet the pamc failed to submit a timely report; not very late, but late process for the rhqdapu program. see 72 fed. reg. xviii of the act and regulations issued see sec v. chenery corp., 332 u.s. 194, 196, 67 s. ct. 1575, 1577, pamc appealed the denial of reconsideration to the the deadline approaches to alert hospitals that their reports