Opinion ID: 486487
Heading Depth: 2
Heading Rank: 5

Heading: Litigation in this Court

Text: 31 Following the district court's decision in Baptist Hospital case (finalized 11 months before Tallahassee Memorial ), the Secretary appealed to this court. 12 Prior to the setting of the briefing schedule, this court issued its opinion in the Lloyd Noland case. The Secretary timely filed for reconsideration and rehearing in the Lloyd Noland case. The Secretary then filed in the Baptist Hospital case a motion to hold the appeal in abeyance pending resolution of the Lloyd Noland petition for reconsideration. In the Baptist Hospital motion, the Secretary wrote that the appeal presents the identical issue already decided by the Court in the Lloyd Noland case. Appellant's Motion to Hold This Appeal in Abeyance Pending Decision in Another Case at 1. Arguing that judicial economy would be best served, the Secretary summarized the issues in Baptist Hospital: 32 While [this case] involves a jurisdiction issue not present in Lloyd Noland, that issue--which concerns the right to obtain review of the validity of the regulation without raising the issue in cost reports filed with the intermediary--goes only to two hospitals. Thus, whatever the outcome of Lloyd Noland, it will be dispositive as to all but two hospitals in the instant appeal, and even the jurisdictional issue will be mooted as to the two hospitals if the Court disposes of the case on rehearing in the Secretary's favor. 33 Id. at 2. The motion was granted on August 14, 1985. 34 In the petition for rehearing in the Lloyd Noland case, the Secretary informed this court that, five days after the issuance of the Lloyd Noland opinion, the Secretary published a notice of proposed rulemaking, proposing a new malpractice insurance regulation that would be retroactive to the date of promulgation of the invalidated 1979 rule. See Appellant's Petition for Panel Rehearing, Lloyd Noland. The Secretary argued that the new rule, when finalized, would moot the claims of the plaintiffs in Lloyd Noland. The Secretary asked the Lloyd Noland panel to vacate its order requiring payment under the pre-1979 rule, and to remand the case to the Secretary for further proceedings. Id. at 4. The court rejected the request for a remand and denied the Secretary's petition for rehearing on January 15, 1986. The Secretary did not petition the Supreme Court for a writ of certiorari. 35 By the time the Lloyd Noland rehearing petition was denied (thereby ending the period that Baptist Hospital was held in abeyance), the Secretary's appeal of the district court's decision in the Tallahassee Memorial case had reached this court. The plaintiffs/appellees in both cases filed motions for summary action in favor of most of the hospitals, based on the Lloyd Noland opinion; the motions argued that, except for the self-disallowing hospitals, Lloyd Noland completely controlled the disposition of the cases. Without directly stating any opposition to summary action for the non -self-disallowing hospitals, the Secretary responded to the motions by stating that summary action was inappropriate for the self-disallowing hospitals, a point the appellees had conceded in their motions. A panel of this court denied the motions for summary action. 36 At that same time, the Secretary moved to consolidate the appeals in the two cases, Baptist Hospital and Tallahassee Memorial Regional Medical Center. The Secretary argued that the two cases involve virtually identical challenges to the same Medicare reimbursement regulation and in both cases the district courts ruled against the Secretary on a jurisdictional issue pertinent only to some of the plaintiffs in each case. Consolidation of the cases will therefore serve the goal of judicial economy. Motion of Appellant for Consolidation of Cases and for New Briefing Schedule at 1-2. That motion was granted on March 4, 1986. 37 On March 20, 1986, the Secretary filed his initial brief as appellant. The only Issue Presented was [w]hether the two District Courts erred when they held that the Provider Reimbursement Review Board must accept jurisdiction over costs that a Medicare provider failed to claim or otherwise disclose on its cost report. Appellant's Brief at 2. In the Statement of the Case, the brief included a footnote: 38 This Court held the malpractice rule invalid in Lloyd Noland Hospital and Clinic v. Heckler, 762 F.2d 1561 (11th Cir.1985), reh. denied, No. 84-7444 (January 15, 1986). On June 17, 1985 (50 Fed.Reg. 25178), the Secretary published a Notice of Proposed Rulemaking to replace the malpractice rule with a new regulation effective for cost reporting periods beginning on or after July 1, 1979. This Court denied the Secretary's petition for rehearing in which the government contended that the appropriate remedy in Lloyd Noland was a remand to the agency for application of the new rule promulgated pursuant to the NPRM. While defendant continues to believe that the Court should refrain from ordering payment under the pre-1979 regulations, he acknowledges that Lloyd Noland is controlling as to the validity of the current malpractice rule, in that the new malpractice rule has not yet been published as a final regulation. (See Response of Appellant to Appellees' Motion For Summary Action). Defendant incorporates by reference all his arguments in Lloyd Noland in these appeals, and he will notify the Court as soon as a new rule is issued. 39 Id. at 4 n. 1. The hospitals filed their Brief for Appellees on May 1, 1986; that brief responded only to the single Issue Presented in the Secretary's initial brief. 40 Then, in his reply brief filed May 19th, the Secretary informed this court that he had, on April 1, 1986, promulgated a new malpractice insurance reimbursement rule retroactive to 1979. 51 Fed.Reg. 11142 (Apr. 1, 1986). 13 The new rule applies only to those hospitals that still have open cost reports, i.e., generally those hospitals that have appealed the 1979 rule to the PRRB and to the courts and that have not received a final judgment from the PRRB or courts. Id. at 11149. In other words, the new rule applies to hospitals that are still in litigation over the 1979 rule. All hospitals (such as those in Lloyd Noland ) that have received final court judgments are not covered by the new rule. 41 The Secretary, in the reply brief, argues that the new rule makes this entire case moot, and therefore deprives this court of jurisdiction. Bound in with the reply brief was the Secretary's Suggestion of Mootness and Motion to Vacate the Two District Court Judgments from which these Consolidated Appeals were Taken and to Remand these Cases to the District Courts with Instructions to Dismiss. 14 42 The Secretary's reply brief prompted a flurry of filings and motions in this court, 15 starting with the appellee hospitals' motion to strike the Secretary's reply brief. 16 Most of the motions were carried with the case for resolution by the oral argument panel. 17 Argument in the case was finally heard on October 8, 1986.