Opinion ID: 486487
Heading Depth: 2
Heading Rank: 4

Heading: Litigation in the District Courts

Text: 28 Because of the venue and timing requirements in the Medicare statute, 42 U.S.C. Sec. 1395oo(f)(1), the thirty-five hospitals could not bring one consolidated case into a single district court. Three suits were filed, Tallahassee Memorial Regional Medical Center v. Heckler in the Northern District of Florida, and Baptist Hospital of Miami v. Heckler and Parkway Medical Center v. Heckler in the Southern District of Florida. The latter two cases were consolidated at the district court level. In both litigations, initiated well before this circuit's decision in Lloyd Noland, the Secretary defended the 1979 rule as valid, and also argued that the district courts did not have jurisdiction over the claims of the five self-disallowing hospitals. 11 29 In the Baptist Hospital case, on September 24, 1984, the district court denied the Secretary's motion to dismiss the self-disallowing hospitals and granted the plaintiffs' motions for summary judgment. In holding that the district court did have jurisdiction over the claims of the self-disallowing hospitals, the district court ruled that the claimed malpractice insurance costs were contained in the cost reports, and thus the PRRB (and therefore the district court) had jurisdiction. In granting the plaintiffs' motions for summary judgment, the court ruled that the Secretary's basis and purpose statement was inadequate under the Administrative Procedures Act, that the 1979 rule was arbitrary and capricious, and that the rule violates the Medicare statute itself. The district court remanded the matter to the Secretary for further consideration in accordance with [the court's] opinion. 30 This court issued its Lloyd Noland decision on June 12, 1985. On June 20, 1985, in the Tallahassee Memorial case, the district court rejected the Secretary's motion to dismiss the claims of the self-disallowing hospitals, relying on the district court opinion in Baptist Hospital. The court also struck down the 1979 rule, relying on the binding authority of the Lloyd Noland case. In a final judgment entered on August 29, 1985, the court remanded the case to the PRRB for payment of the plaintiff hospitals' malpractice insurance costs pursuant to the [pre-1979 rule] without reference to the [1979 rule].