Opinion ID: 212208
Heading Depth: 2
Heading Rank: 2

Heading: Lion's Lawsuit

Text: Lion is a Medicare-certified hospice-care provider based in Hurst, Texas. It is one of dozens of hospice-care providers that over the past several years have filed lawsuits in district courts nationwide challenging the validity of the Secretary's single-year allocation method of calculation prescribed by 42 C.F.R. § 418.309(b)(1). On October 22, 2008, a fiscal intermediary notified Lion that calculations made pursuant to the Regulation indicated that Lion had exceeded its aggregate cap amount by $1,137,113 for FY06. In a similar letter dated July 8, 2009, the intermediary informed Lion that it had also exceeded its aggregate cap amount by $1,214,637 for FY07. Each letter demanded that Lion make refund payments to Medicare in the stated amounts, which Lion has been repaying on a monthly extended repayment schedule. Lion timely filed administrative appeals with the PRRB and sought expedited judicial review on the question of whether the Regulation is invalid because it conflicts with Congress's unambiguous intent as provided in its authorizing statute, 42 U.S.C. § 1395f(i)(2)(C). The PRRB granted the requests for expedited judicial review for both FY06 and FY07. On August 18, 2009, Lion timely filed its Complaint in the U.S. District Court for the Northern District of Texas, challenging the validity of the Regulation and requesting various forms of relief. On October 26, 2009, Lion filed a motion for summary judgment, claiming that Congress expressly required that its annual aggregate cap amounts be determined using a proportional method of calculation and that the single-year allocation method was therefore in direct conflict with Congress's mandate. Lion attached to its motion for summary judgment a hypothetical spreadsheet showing that a proportional allocation would have resulted in Lion owing $217,862.43 less in refunds for FY06 and $441,877.33 less in refunds for FY07. On February 22, 2010, the district court granted Lion's motion for summary judgment. In its order, the district court: (1) declared the Regulation to be unlawful and set aside; (2) enjoined the Secretary from enforcing against Lion any overpayment determinations calculated using the Regulation; (3) enjoined the Secretary from using the Regulation to calculate Lion's annual aggregate cap amount for any past, present, or future accounting year; and (4) ordered the Secretary to refund to Lion all monies paid by Lion to the Medicare program pursuant to previously calculated repayment obligations for FY06 and FY07. The Secretary timely appealed.