Opinion ID: 163810
Heading Depth: 5
Heading Rank: 2

Heading: Discretionary Reopening

Text: Plaintiffs also argue that, under the discretionary reopening regulation, the Secretary had a clear, non-discretionary duty to refrain from interfering with the fiscal intermediary’s discretion in deciding whether to reopen the challenged NPRs. The discretionary reopening provision states: (a) A determination of an intermediary . . . may be reopened with respect to findings on matters at issue in such determination . . . by such intermediary officer . . . either on motion of such intermediary officer . . . or on the motion of the provider affected by such determination . . . to revise any matter in issue at any such proceedings. Any such request to reopen must be made within 3 - 26 - years of the date of the notice of the intermediary . . . . No such determination or decision may be reopened after such 3-year period except as provided in paragraphs (d) [fraudulent determinations or decisions] and (e) [determinations or decisions issued prior to 1972] of this section. ... (c) Jurisdiction for reopening a determination or decision rests exclusively with that administrative body that rendered the last determination or decision. 42 C.F.R. § 405.1885 (emphasis added). In Ruling 97-2, the Secretary adopted a new prospective interpretation of its DSH rule and forbade the reopening of NPRs by intermediaries on the basis of this new interpretation. Plaintiffs argue that in this respect Ruling 97-2 violated the Secretary’s clear, non-discretionary duty to allow the fiscal intermediaries to exercise their discretion to reopen NPRs without instruction from the Secretary. Plaintiffs believe this duty is found in § 405.1885(c), which states that jurisdiction for reopening rests exclusively with the fiscal intermediary. Because we give significant discretion to agency interpretations of their own regulations, we conclude that § 405.1885(c) does not create a clear, non-discretionary duty for the Secretary to leave the substantive law governing the decision to reopen exclusively up to the fiscal intermediaries. The Secretary argues that he has never interpreted 42 C.F.R. § 405.1885(c) “as freeing the fiscal intermediary from its obligation to follow the law, - 27 - including, in this case, the Secretary’s acquiescence ruling. On the contrary, the Secretary has interpreted 42 C.F.R. § 405.1885(c) as a prohibition upon administrative review of the fiscal intermediary’s determination with respect to reopening.” We may invalidate this interpretation only if it is “plainly erroneous or inconsistent with the regulation.” Thomas Jefferson Univ. v. Shalala, 512 U.S. 504, 512 (1994) (internal quotation marks and citation omitted). We believe the Secretary’s interpretation is permissible. The provision in question does not say that the fiscal intermediary has exclusive discretion to decide whether to reopen. It says the fiscal intermediary has exclusive jurisdiction over the reopening decision. These two concepts are distinct. “Discretion” means “a power or right conferred upon [public functionaries] by law of acting officially in certain circumstances, according to the dictates of their own judgment and conscience, uncontrolled by the judgment or conscience of others.” Black’s Law Dictionary at 419 (5th ed. 1979). Nowhere does the regulation indicate that the intermediary has unfettered discretion to decide reopenings. “Jurisdiction,” on the other hand, means the “[p]ower and authority of a court to hear and determine a judicial proceeding.” Id. at 766. Thus, while the fiscal intermediary may have been the only entity with the power and authority to render a decision on the request for reopening, it does not necessarily follow - 28 - that it had unfettered discretion to disregard substantive principles established by the Secretary in reaching a particular decision on the matter. This distinction distinguishes this case from United States ex rel. Accardi v. Shaughnessy, 347 U.S. 260 (1954), on which the district court relied. In Accardi, the Board of Immigration Appeals was instructed by regulation that “‘in considering and determining . . . appeals, [it] shall exercise such discretion and power conferred upon the Attorney General by law . . . .” Id. at 266 (emphasis added). The Supreme Court thus held that the Attorney General could not interfere with the exercise of the Board’s discretion because [i]n unequivocal terms the regulations delegate to the Board discretionary authority as broad as the statute confers on the Attorney General; the scope of the Attorney General’s discretion became the yardstick of the Board’s. And if the word “discretion” means anything in a statutory or administrative grant of power, it means that the recipient must exercise his authority according to his own understanding and conscience. . . . In short, as long as the regulations remain operative, the Attorney General denies himself the right to sidestep the Board or dictate its decision in any manner. Id. at 266-67. We agree with the Secretary’s position that “[u]nlike the complete delegation of discretionary authority in Accardi, the . . . delegation of authority to the fiscal intermediary in the reopening regulation is limited to specifying a forum for reopening claims and to providing that the fiscal intermediary’s resolution of those claims should be unreviewable by the PRRB.” Under this interpretation of the regulation, the Secretary would not be prevented from issuing a general ruling proscribing reopening on a particular - 29 - issue, and the fiscal intermediary would be obliged to comply with the Secretary’s substantive rule. The Secretary owed Plaintiffs no clear, non-discretionary duty not to pass rulings that would bind intermediaries to particular substantive principles on particular reopening requests. Thus, mandamus jurisdiction cannot be found on this basis. Further, we note that, even if Ruling 97-2 had merely announced the Secretary’s new interpretation of the DSH rule and stated that the Ruling would only be applied prospectively, without specifically forbidding the intermediaries to reopen, the intermediaries could not have reopened and revised without violating their duty to comply with the agency’s law.