Opinion ID: 486487
Heading Depth: 3
Heading Rank: 3

Heading: Analysis of the Relevant Case Law

Text: 109 None of the cases cited by the Secretary undermine our conclusions. On the other hand, the cases cited by the hospitals that have found jurisdiction in similar cases do not utilize the same analysis as we have in this case. This is because most of the cases did not deal with challenges to regulations under the 1980 grant of judicial review, and none of the cases reviewed the full legislative history of 42 U.S.C. Sec. 1395oo. 110
111 The leading set of cases in this area is Athens Community Hospital v. Schweiker (Athens I), 686 F.2d 989 (D.C.Cir.1982), modified on rehearing Athens Community Hospital v. Schweiker (Athens II), 743 F.2d 1 (D.C.Cir.1984). In those opinions, the District of Columbia Circuit ruled that the PRRB was correct in refusing to exercise jurisdiction in a case where the providers failed to include certain taxes and stock option costs in their cost reports but four years later attempted to reopen the reports and claim reimbursement for them. The D.C.Circuit reasoned that, because the language of 42 U.S.C. Sec. 1395oo(d) suggests that the PRRB only has the power to review claims that were raised in the cost reports, the PRRB could not consider the hospitals claims (and thus the federal courts could not entertain the suits in question). 112 Athens I and II, however, are not directly instructive on the issue confronting this court. The Athens case was based on the 1972 grant of judicial review, not the 1980 grant that is at issue here. 50 In fact, the Athens cases involved cost years prior to 1980, and thus the second grant of judicial review, added to 42 U.S.C. Sec. 1395oo(f) in 1980, was not at all before the D.C.Circuit in those opinions. The focus of the Athens court was on subsection (d), which is relevant to the 1972 grant of judicial review, but not to the 1980 grant. See, e.g., Athens II, 743 F.2d at 9. The Athens cases simply do not consider the factual situation presented here, where self-disallowing hospitals challenged a regulation. Similarly, this court's opinion in North Broward involved an appeal under the 1972 grant of review, and the cost year challenged was 1977, before the creation by Congress in 1980 of the second grant of judicial review. 51 113 A number of other cases that plausibly support the Secretary's position also focus only on the 1972 grant of judicial review. In facts very similar to those in the Athens case, the Sixth Circuit upheld the PRRB's refusal to take jurisdiction. See Saline Community Hospital Association v. Secretary of Health and Human Services, 744 F.2d 517 (6th Cir.1984) (hospital failed to include claim for return on net-invested-equity capital in 1979 cost report). Three other cases involved a challenge to a provision in the Provider Reimbursement Manual, which is not a regulation promulgated by the Secretary. In those cases, the PRRB took jurisdiction over similar claims of other hospitals, and thus apparently had the authority to decide the issue (unlike with a challenge to a regulation). See Community Hospital of Roanoke v. Health and Human Services, 770 F.2d 1257 (4th Cir.1985); 52 St. Mary of Nazareth Hospital Center v. Schweiker, 741 F.2d 1447 (D.C.Cir.1984); University of Michigan Hospitals v. Heckler, 609 F.Supp. 756 (E.D.Mich.1985). 114 Only two opinions, recently issued by the Sixth Circuit, are directly analogous to this case. See Baptist Hospital East v. Secretary of Health and Human Services, 802 F.2d 860 (6th Cir.1986). That case involved a challenge by a self-disallowing hospital to a regulation regarding free health care to non-Medicare patients. The Baptist Hospital East court essentially required the hospitals to meet the terms of 42 U.S.C. Sec. 1395oo(d), even though a regulation was being challenged under the 1980 grant of review under Sec. 1395oo(f). See Bethesda Hospital v. Secretary of Health and Human Services, 810 F.2d 558, 562 (6th Cir.1987) (bound by but suggesting disagreement with Baptist Hospital East ). Baptist Hospital East, which conflicts with our holding in this case, relies heavily on Athens II and Saline, neither of which involved the 1980 grant of judicial review. Because the Baptist Hospital East opinion did not address the differences between the two grants of review, and did not analyze the legislative history of the relevant provisions, we decline to follow its reasoning. 53 115
116 At least two circuit courts, and a number of district courts, have rejected the holdings of the cases discussed above. The courts have not, however, utilized the same analysis as we have here. Again, this is because most (but not all) were faced with appeals arising out of the 1972 grant of judicial review. Most of these courts based their holdings on a broad interpretation of Sec. 1395oo(d), finding that the PRRB was not limited in its review to items raised in the cost reports. Those cases that involve the 1972 grant of review have been rejected by this court in North Broward. 117 In St. Mary of Nazareth Hospital Center v. Department of Health and Human Services, 698 F.2d 1337 (7th Cir.), cert. denied, 464 U.S. 830, 104 S.Ct. 107, 78 L.Ed.2d 110 (1983), the Seventh Circuit confronted the same jurisdictional issues as did the D.C.Circuit in Athens II, but reached the opposite result. On the issue of self-disallowance, the Seventh Circuit explicitly held that the PRRB could consider matters not raised to the intermediary. The St. Mary of Nazareth Hospital Center opinion involved the 1972, not 1980, grant of judicial review. Similarly, the First Circuit recently rejected the reasoning of the Athens II case, in a case involving the 1972 grant of review. See St. Luke's Hospital v. Secretary of Health and Human Services, 810 F.2d 325 (1st Cir.1987); see also Adams House Health Care v. Heckler, 604 F.Supp. 110 (N.D.Calif.1984); Our Lady of Lourdes Memorial Hospital v. Schweiker, 1982 Medicare & Medicaid Guide (CCH) p 32,154, at 10,561 (N.D.N.Y. July 26, 1982); Memorial Hospital v. Schweiker, 1981 Medicare & Medicaid Guide (CCH) p 31,603, at 9917 (M.D.Fla. Oct. 20, 1981). 118 Other than the Sixth Circuit cases discussed above, we have located one case addressing the self-disallowance question in the context of the 1980 grant of judicial review; the case involved the same malpractice insurance regulation at issue here, and is nearly identical to this case. See Alexandria Hospital v. Heckler, 660 F.Supp. 23 No. (E.D.Va. 1985), on remand from Bedford County Memorial Hospital v. Health and Human Services, 769 F.2d 1017 (4th Cir.1985), aff'g Alexandria Hospital v. Heckler, 586 F.Supp. 581 (E.D.Va.1984). The court ruled in favor of the hospitals and found federal jurisdiction, although not on the same grounds as we find jurisdiction. Like the courts considering appeals arising under the first grant of judicial review, Alexandria Hospital focused on 42 U.S.C. Sec. 1395oo(d), without considering the legislative history of Sec. 1395oo.