Opinion ID: 471343
Heading Depth: 1
Heading Rank: 3

Heading: subsequent cost reporting years

Text: 19 The Secretary also argues that the district court exceeded its authority when it ordered HHS to recompute the Hospital's reimbursement for the subsequent cost reporting years 1982-83. Agencies should be free, even when they err, to work out their own problems without the interference of the courts. In most cases, agency tribunals should be permitted to develop the factual record upon which decisions should be based. See Weinberger v. Salfi, 422 U.S. 749, 765, 95 S.Ct. 2457, 2466, 45 L.Ed.2d 522 (1975). However, when an administrative appeal would be futile and little more than a formality, exhaustion will not be required. See United States v. Blair, 321 U.S. 730, 736, 64 S.Ct. 820, 823, 88 L.Ed. 1039 (1944). The futility exception to the exhaustion requirement applies when there is nothing to be gained other than an agency decision adverse to the plaintiff. See West v. Bergland, 611 F.2d 710, 714-20 (8th Cir.1979), cert. denied, 449 U.S. 821, 101 S.Ct. 79, 66 L.Ed.2d 23 (1980); B. Schwartz, Administrative Law Sec. 8.31, at 505-07 (2d ed. 1984). 20 Further development at the administrative level will not be necessary. The Hospital has submitted a claim for payment of the disputed costs for 1982-83, which the Intermediary then denied. The PRRB on January 13, 1986 reversed the decision of the Intermediary, and on March 12, 1986 the Deputy Administrator reversed the PRRB. The pattern is clear. Little would be gained by insisting on the administrative process playing itself out. The Secretary has been unable to controvert that the labor/delivery room policy is irrational with regard to cost reporting year 1981. There is no reason to believe that we would reach a different result for 1982-83. Therefore, we conclude that the district court did not err in requiring that the Secretary reimburse the Hospital for cost reporting years 1982-83. 21 For the reasons stated above, we affirm the decision of the district court.