Opinion ID: 3033871
Heading Depth: 4
Heading Rank: 1

Heading: “Prevailing Charges” and “Locality”

Text: In response to the Agency’s request for clarification, the State explained that it would identify a tribal facility’s “customary charges” from the “charge schedule used by the facility for the regular rates for inpatient services that are charged to both beneficiaries and other paying patients.” To determine “prevailing charges,” the State would divide Alaska into two localities: urban (Anchorage) and rural (everywhere else). Then, for each locality, it would identify all hospitals offering “a comparable array of services under comparable circumstances” to the tribal facilities. Using only those facilities, it would divide the total charges by the total inpatient days to arrive at the prevailing rate. Testimony at the evidentiary hearing indicated, however, that the State used charges from a single private hospital in ALASKA DEP’T OF HEALTH v. CENTERS FOR MEDICARE 13045 Anchorage to determine the prevailing charges for all tribal facilities in both localities. The hearing officer issued her recommended decision on this understanding, which the State, in its exceptions to the hearing officer’s recommendations, in fact reinforced. Admin. R. at 17 (“The State has provided evidence that due to the unique nature of health care services in Alaska, there is only one hospital that provides services that are comparable to those provided in the relevant tribal health centers.”). Although the State now suggests that this finding is factually incorrect, it is nowhere contradicted in the record, and we conclude that it is supported by substantial evidence. See Bear Lake, 324 F.3d at 1076-77 & n.8 (explaining standard). Thus, to the extent that the State calculated prevailing charges for the rural locality based only on charge information from a hospital in Anchorage, its methodology is inconsistent with § 447.325, which plainly requires that the State “must not pay more than the prevailing charges in the locality” (emphasis added).