Court Opinion

ID: 2998348
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:43:09.168371+00
Date Added: 2024-06-11T15:03:00.093414
License: Public Domain

In the
 United States Court of Appeals
              For the Seventh Circuit
                         ____________

No. 04-2839
MICHAEL REESE HOSPITAL AND MEDICAL CENTER,
also known as MICHAEL REESE HEALTH TRUST, and
STRATEGIC REIMBURSEMENT, INCORPORATED,
                                           Plaintiffs-Appellants,
                                v.

TOMMY G. THOMPSON, not individually but in his
capacity as Secretary of the United States Department
of Health and Human Services, and ADMINASTAR
FEDERAL, INCORPORATED,
                                           Defendants-Appellees.
                         ____________
           Appeal from the United States District Court
      for the Northern District of Illinois, Eastern Division.
             No. 03 C 6034—James B. Zagel, Judge.
                         ____________
  ARGUED JANUARY 5, 2005—DECIDED OCTOBER 14, 2005
                    ____________

 Before KANNE, ROVNER, and SYKES, Circuit Judges.
  ROVNER, Circuit Judge. This case concerns a dispute
between plaintiff, Michael Reese Hospital and Medical
2                                                 No. 04-2839

Center (“Michael Reese”)1 and the administrators of the
federal Medicare program. Some background concerning
that program is necessary in order to understand the
context of this appeal. The Medicare program is a federally-
subsidized health insurance program primarily for elderly
and disabled individuals. The Secretary of the Department
of Health and Human Services (“Secretary”) administers
the Medicare program through the Centers for Medicare
and Medicaid Services (“CMS”), formerly known as the
Health Care Financing Administration (“HCFA”). This
appeal concerns Part A of that Medicare program, which is
a hospital insurance program that covered payments for the
costs of inpatient hospital services, including costs incurred
in connection with training and instructing residents in
approved graduate medical education programs by hospi-
tals. Much of the administration of Part A is handled by
private contractors, called fiscal intermediaries, pursuant
to contracts with the Secretary. Those intermediaries
determine the amount of payments due to providers of
services.
  Until 1983, the costs of educational activities and of
inpatient hospital services were reimbursed by Medicare
based upon a provider’s reasonable costs. In an effort to
control spending, however, Congress in 1983 adopted a
prospective payment system, whereby hospitals were paid a
standardized rate based on the diagnostic classification for
the services rendered. At that time, costs incurred in
connection with graduate medical education (“GME”) were
still reimbursed separately on a reasonable cost basis. In
April 1986, however, Congress changed the method for
calculating reimbursable GME costs. Rather than reimburs-

1
  Strategic Reimbursement, Inc., the other appellant, is Michael
Reese’s agent for purposes of collecting monies owed Michael
Reese from the Medicare program for the July 1, 1985 through
February 28, 1991 time period.
No. 04-2839                                               3

ing hospitals for annual reasonable costs incurred in such
GME programs, Congress designated a base year, 1984, for
cost determinations. GME costs recognized as reasonable
for that year would serve as the base figure to calculate
GME reimbursements for all subsequent years. The GME
Amendment directed the Secretary to determine a per
resident amount by dividing each provider’s 1984 GME
costs recognized as reasonable, by the number of full-time
equivalent residents working for the provider in 1984. That
per-resident amount would then be used in subsequent
years to calculate the provider reimbursement amount.
Specifically, in subsequent years the provider reimburse-
ment amount would be determined by taking the 1984 Base
Year Per Resident Amount (hereinafter “Base Year
Amount”), adjusting it for inflation by applying the Con-
sumer Price Index for all Urban Consumers (“CPI-U”), and
multiplying it by the hospital’s weighted number of full-
time equivalent residents and the hospital’s Medicare
patient load for the particular year. 42 U.S.C.
§1395ww(h)(3).
  It was not until September 1989 that the Secretary
promulgated regulations to implement that GME Amend-
ment. In those regulations, the Secretary sought to ensure
that the 1984 Base Year Amount actually reflected legiti-
mate GME costs because that figure would be used for
all future years. Therefore, the Secretary authorized Med-
icare contractors to re-audit and re-verify each hospital’s
Base Year GME costs and exclude non-allowable or
misclassified costs. 42 C.F.R. §§ 413.86(e)(1)(ii). The rule
permitted recoupment of Medicare overpayments based
on the redetermined Base Year Amount only for years in
which GME payments had not become final—those which
were still within the three-year reopening period. Moreover,
providers could appeal the intermediary’s revised base year
determinations to the Provider Reimbursement Review
Board (“PRRB”) within 180 days of their receipt of notice of
4                                               No. 04-2839

the new determination. 42 C.F.R. § 413.86(e)(1)(v). The
PRRB’s decision was final unless within 60 days, the
Secretary, acting through the CMS Administrator, reversed,
affirmed, or modified the decision. 42 C.F.R. §§ 405.1871(b),
405.1875(a). Providers could obtain judicial review of any
final decision of the PRRB or the Secretary. 42 U.S.C.
§ 1395oo(f)(1).
  In July 1993, pursuant to that Final Rule, the intermedi-
ary Blue Cross and Blue Shield of Illinois a/k/a The Health
Care Service Corporation (“HCSC”) recalculated Michael
Reese’s Base Year Amount and issued Notices of Reopening
and Amended Notices of Program Reimbursement (“NPRs”)
for fiscal years 1986, 1987, 1988, 1989, 1990, and 1991.
Michael Reese challenged those NPRs within the 180-day
appeal window, filing timely appeals in December 1993,
with the PRRB disputing HCSC’s Base Year Determination
and the Amended NPRs for FY 1986-91. The challenge to
the 1991 determination was resolved separately, and is not
an issue in this appeal.
  That same month a settlement, or administrative resolu-
tion, was reached regarding the Base Year Amount, which
adjusted the Base Year Amount in Michael Reese’s favor. In
accordance with that administrative resolution, Michael
Reese withdrew its challenge to the Base Year Amount, and
the HCSC issued a Notice of Revised Average Per Resident
Amount       (“NAPRA”)          which     incorporated
the administratively-resolved amount. The NAPRA also
informed Michael Reese of its right to appeal the deter-
mination to the PRRB within 180 days if it was dissatisfied
with the amount. The NAPRA also included a sched-
ule showing the revised per resident amount updated by the
CPI-U through the cost report periods ending August 1991,
which thus included new amounts for FY 1986-90. Satisfied
with that resolution, Michael Reese did not appeal from the
NAPRA, and that decision became final.
No. 04-2839                                                  5

  Despite the schedule showing adjusted amounts for FY
1986-90, however, Michael Reese never received any
repayment from the Secretary of the amount that it pre-
sumably overpaid—an amount totaling approximately $1.5
million.2 In May, 1996, the PRRB sent “reminder letters” to
Michael Reese concerning the appeals for FY 1986-90. The
reminder letters stated that the hearings on the PRRB
appeals for the 1986-90 fiscal years were tentatively set for
August 1997, and that the parties’ position papers concern-
ing the appeal were due in January and April of 1997. The
letters further informed Michael Reese that if it failed to
submit position papers, its appeals would be dismissed. The
position papers were to address any issue not settled or
withdrawn, even if a settlement was pending, and the
failure to address an issue would result in the dismissal of
that issue. The reminder letter also set forth the procedure
to follow if all issues had been settled:
    If all issues have been resolved, the Provider should
    withdraw the appeal. If the issues have been resolved
    but the Provider has not yet received payment, it
    should notify the Board. The Board will close the
    case but will permit the appeal to be reinstated at the
    end of one year if the Provider has not been paid.
Michael Reese did not respond to that letter from the PRRB
in any way, neither filing position papers nor informing the
PRRB that the issues had been settled and withdrawing the
appeal. Accordingly, the PRRB dismissed those appeals.
  Nothing further happened concerning the matter until
June 1998, when Michael Reese wrote HCSC requesting

2
  There is some dispute over whether Michael Reese is actually
owed this on the merits, but the parties do not discuss this on
appeal and it is not relevant to our disposition of the subject
matter jurisdiction issue before us.
6                                                No. 04-2839

that it implement the administrative resolution and revised
NAPRA. Michael Reese followed up that letter with a letter
in November 1999 to AdminaStar, which had succeeded
HCSC in September 1997 as intermediary, again requesting
implementation of the administrative resolution and
revised NAPRA. In August 2001, AdminaStar denied
Michael Reese’s request to reopen the cost reports for FY
1986-90. Finally, in April 2003, counsel for Michael Reese
wrote to CMS and requested that CMS order AdminaStar
to reopen the cost reports for FY 1986-90 to implement the
Resolution and revised NAPRA. CMS affirmed
AdminaStar’s refusal to reopen, stating that the request
was filed after the 3-year period for reopening a cost report.
  Michael Reese subsequently filed this action in the
district court seeking enforcement of the administrative
resolution. Michael Reese based jurisdiction on the
Medicare Act and the Administrative Procedure Act
(“APA”), on diversity of parties, and on the mandamus
statute. On defendants’ motion, the district court dismissed
the claim for lack of subject matter jurisdiction.
  On appeal, Michael Reese asserts that the district court
erred in dismissing the case, and that it has established
both federal question jurisdiction and jurisdiction under the
federal mandamus statute. Both of those claims of jurisdic-
tion, however, ultimately rest upon Michael Reese’s conten-
tion that it exhausted its administrative remedies. Because
we agree with the district court that Michael Reese failed
to exhaust those remedies, we affirm the district court’s
dismissal for lack of subject matter jurisdiction.
No. 04-2839                                                   7

                              I.
  In asserting federal question jurisdiction, Michael Reese
relies on the APA, which provides a cause of action for “[a]
person suffering legal wrong because of agency action, or
adversely affected or aggrieved by agency action within
the meaning of a relevant statute.” 5 U.S.C. § 702. As
Michael Reese recognizes, however, the Supreme Court has
held that the APA alone does not contain an implied grant
of subject matter jurisdiction for federal courts to review
agency decisions. Califano v. Sanders, 430 U.S. 99, 105
(1977). Michael Reese identifies the Medicare Act, 1989
Final Rule, and the Secretary’s regulations as providing
that jurisdictional source. General federal question jurisdic-
tion is set forth in 28 U.S.C. § 1331, which states that
“district courts shall have original jurisdiction over all civil
actions arising under the Constitution, laws, or treaties of
the United States,” but claims under the Medicare Act must
take a different route. The Social Security Act at 42 U.S.C.
§ 405(h) provides that “no action against the United States,
the Commissioner of Social Security, or any officer or
employee thereof, shall be brought under § 1331 . . . to
recover on any claim arising under” the Social Security Act.
That provision was incorporated into the Medicare Act
through 42 U.S.C. § 1395ii, and has been held to preclude
federal question jurisdiction unless the Medicare program’s
administrative review process has been exhausted. In
Shalala v. Illinois Council on Long Term Care, Inc., 529
U.S. 1, 5 (2000), the Supreme Court held that § 405(h), as
incorporated by § 1395ii, bars federal question jurisdiction
under 28 U.S.C. § 1331, and requires parties to proceed
instead through the special review channel that the
Medicare statutes create. Thus, a provider must channel
virtually all legal attacks through the Medicare program’s
administrative review process before it may seek judicial
review. The Supreme Court recognized an exception to this
where application of § 405(h) would not simply channel
8                                                 No. 04-2839

review through the agency, but would mean no review at
all. Id. at 19. Accordingly, in determining whether federal
question jurisdiction is proper, we must first consider
whether Michael Reese exhausted that administrative
review process.
  That exhaustion requirement applies as well to the plea
for relief under the federal mandamus statute, 28 U.S.C.
§ 1361. The Supreme Court has repeatedly reserved the
question as to whether mandamus relief is available at
all for such Medicare claims, or whether it is foreclosed
by § 405(h). See Heckler v. Ringer, 466 U.S. 602 (1984). In
Burnett v. Bowen, 830 F.2d 731 (7th Cir. 1987), we joined a
number of other circuits in concluding that mandamus
relief is available for Medicare claims that are procedural
rather than substantive in nature. We need not consider
whether this is such a “procedural” claim, however, because
Michael Reese cannot meet the standards for mandamus
relief. The Supreme Court has recognized that mandamus
relief is available only if a plaintiff “has exhausted all other
avenues of relief and only if the defendant owes him a clear
nondiscretionary duty.” Heckler, 466 U.S. at 616.
  We turn then to the exhaustion issue. The exhaustion
requirement serves an important purpose, preventing the
premature interference with agency processes so that
the agency can function efficiently and can correct its
own errors, as well as affording the parties and the courts
the benefit of the agency’s experience and expertise and
compiling a record which is adequate for judicial review.
Weinberger v. Salfi, 422 U.S. 749, 765 (1975). The obvious
problem for Michael Reese is its failure to pursue its PRRB
appeals relating to the cost reports for FY 1986-90. Once
Michael Reese obtained the administrative resolution of
its Base Year appeal, it apparently believed that the FY
1986-90 appeals had been resolved as well. That belief
was not without some basis, given that the revised
NAPRA included an attached schedule reflecting adjust-
No. 04-2839                                                9

ments for each fiscal year from 1986 to 1991. Michael Reese
contends that there was nothing left to pursue. Michael
Reese’s challenges to the FY 1986-90 cost reports were
based upon its disagreement over the Base Year Amount,
which was applied to all of those years. The Final Rule
made clear, however, that a challenge to the Base Year
Amount could only be made in a challenge to the Base Year,
not in a challenge to subsequent years in which that Base
Year Amount was applied. With respect to the ensuing
years, the Rule stated that a provider could challenge the
number of residents or the application of the CPI-U.
Because Michael Reese had already resolved the Base Year
appeal by administrative resolution and had no complaints
about the number of residents or the application of the CPI-
U, it argues that there was nothing to be gained by pursu-
ing the FY 1986-90 appeals. Moreover, Michael Reese
contends that there was no point in appealing the Base
Year challenge or the FY 1986-90 challenges to the PRRB,
because it was fully satisfied with the settlement of that
issue through the administrative resolution. Finally,
Michael Reese contends that the PRRB could not have
provided any relief even if it had pursued the FY 1986-90
appeals, because the PRRB can only affirm, reverse or
modify a determination of the intermediary, but has no
enforcement authority.
  Although Michael Reese contends that the FY 1986-90
appeals were meaningless once the Base Year appeal was
resolved, it provides no support for that contention, and the
evidence of record points otherwise. The reminder letters
from the PRRB set forth the procedures to be followed in
perfecting the appeal, and the options for the provider to
pursue if it believed that the matter had been settled. Most
significant to this case, the reminder letters notified
Michael Reese that if all issues had been settled but it had
not yet been paid, it should notify the PRRB. The PRRB
would then close the case, but would permit the appeal to
10                                               No. 04-2839

be reinstated within one year if the provider had still not
been paid. That mechanism set up by the PRRB addressed
precisely the situation here, in which a settlement had
resolved the issues but the provider had not yet received
payment. Michael Reese provides no explanation as to why
this procedure would be inadequate to address its situation,
nor has it indicated what that mechanism was designed to
resolve if not this type of situation. Michael Reese instead
asserts that the provision did not apply to it because only
the Base Year appeal had been resolved by administrative
resolution, rather than the FY 1986-90 appeals, and
therefore it could not, in these appeals, notify the PRRB of
the settlement and take advantage of that one-year window.
   Michael Reese cannot have it both ways. It filed sepa-
rate appeals for the Base Year and for each of the fiscal
years from 1986-90 so that it could challenge the Base Year
Amount and could also seek repayment for the 1986-90
fiscal years if it was successful on that Base Year appeal.
Either the administrative resolution of the Base Year
appeal settled the FY 1986-90 appeals or it did not. If it did,
then Michael Reese should have followed the procedures
outlined in the reminder letter and notified the PRRB that
the issues had been settled but that it had not been paid.
That would have given the PRRB the opportunity to
address the matter if, as it turns out, Michael Reese had
still not been paid a year later. If the administrative
resolution of the Base Year appeal did not settle the FY
1986-90 appeals, then Michael Reese should have pursued
the appeals with the PRRB in order to resolve the issues.
Michael Reese cannot plausibly argue that the Base Year
appeal resolved the FY 1986-90 appeals and therefore there
was no point in pursuing it further, and simultaneously
assert that it could not have notified the PRRB of a settle-
ment because the settlement occurred only in the Base Year
appeal.
No. 04-2839                                              11

  Moreover, that argument conflicts with both the com-
plaint and the briefs, in which Michael Reese represents
that the FY 1986-90 appeals were resolved by administra-
tive resolution. For instance, the complaint alleges that
Michael Reese exhausted its administrative remedies
    by filing cost report appeals with the Secretary’s PRRB,
    having them administratively resolved by the Secre-
    tary’s agent, HCSC, and then asking that the subject
    cost reports be reopened to implement those Adminis-
    trative Resolutions affecting [Michael Reese’s] GME
    calculation
Thus, Michael Reese in its complaint characterized the
FY 1986-90 appeals as having been resolved by administra-
tive resolution. The PRRB, however, provided for the
scenario in which all issues were settled but the provider
had not been paid, and Michael Reese did not avail itself of
that procedure. In choosing to abandon its appeal
rather than notify the PRRB of the settlement and preserve
its remedies, Michael Reese failed to exhaust
its administrative remedies for the challenges to the FY
1986-90 cost reports.
  Michael Reese also asserts that it would have been futile
to pursue the FY 1986-90 appeals because it could not
challenge the Base Year Amount in those appeals. The
Final Rule made clear that the Base Year Amount could
only be challenged in the Base Year appeal. At the time
of the reminder letter, however, when Michael Reese
was faced with this decision, the Base Year Amount had
been settled by administrative resolution, and the appeal
period had expired so that it was a final determination.
There would have been no need for Michael Reese to
challenge the Base Year Amount in its FY 1986-90 appeals.
Instead, Michael Reese merely had to argue that
the calculations for those years were incorrect given the
Base Year Amount that had already been established, as
12                                               No. 04-2839

well as the number of residents and the CPI-U. Its appeals
to the PRRB had set forth as its issue: Whether the adjust-
ment for the resident full time equivalent number and per
resident amount is proper? There is no reason to believe
that the PRRB could not have determined that
the adjustment was in fact improper given the determina-
tion in the Base Year appeal that the Base Year Amount
was erroneous. In fact, if the PRRB could not make that
determination, then it is difficult to understand why
Michael Reese filed those appeals in the first place. In other
words, if the Base Year appeal resolved everything and
there was nothing that the PRRB could do in the FY 1986-
90 appeals, then there would have been no reason to file it
at all. In fact, Michael Reese filed appeals in those years to
contest the program reimbursement for those years within
the 3-year reopening period. Its Base Year appeal was
necessary to allow it to challenge the Base Year Amount,
and the FY 1986-90 challenges were necessary to obtain
redress for the application of that incorrect Base Year
Amount in the subsequent years. There is no basis for us to
hold that the PRRB procedures could not provide that relief.
Because exhaustion of administrative remedies is a prereq-
uisite of subject matter jurisdiction under both the federal
question and mandamus theories, and Michael Reese failed
to exhaust the review process for its FY 1986-90 challenges,
the district court properly rejected that basis for subject
matter jurisdiction.

                             II.
  Michael Reese also argues, however, that there is jurisdic-
tion because the decision of CMS not to reopen the FY 1986-
1990 determinations itself constituted a final decision. The
Supreme Court, however, considered a similar claim in
Your Home Visiting Nurse Services v. Shalala, 525 U.S. 449,
453-56 (1999), and made clear that the discretionary
No. 04-2839                                                13

decision by an intermediary on a request to reopen is not
subject to administrative or judicial review. Michael Reese
attempts to escape the clear impact of that ruling by
arguing that it sought reopening under 42 C.F.R.
405.1885(b) (which has since been amended), under which
reopening was mandatory, rather than the discretionary
reopening provision in 42 C.F.R. § 405.1885(a) that Your
Home addressed. Section 405.1885(b) provided that:
    A determination or a hearing decision rendered by the
    intermediary shall be reopened and revised by the
    intermediary if, within [3 years of the date of the notice
    of the intermediary determination or intermediary
    hearing decision, CMS] notifies the intermediary that
    such a determination or decision is inconsistent with
    the applicable law, regulations or general instructions
    issued by [CMS] in accordance with the Secretary’s
    agreement with the intermediary.
Michael Reese argues that such “notification” was pro-
vided by the GME Amendment and the 1989 Final Rule,
which required intermediaries to reaudit and recalculate
the Base Year cost reports, and then to reopen the cost
reports for subsequent years to use that new Base Year
Amount to adjust payments.
  Even if we assume, without deciding, that those provi-
sions constitute such notification under the regulation, that
notification was not issued within the 3-year period after
the intermediary’s decision. Indeed, it was issued prior to
the intermediary’s determination, and in fact was the
reason for the intermediary’s determination in the first
place. It was in response to that notification that the
intermediary reaudited and recalculated the Base Year
Amount, and reopened the cost reports for FY 1986-1990
and issued amended NPRs for those years. Michael Reese
then exercised its right to appeal that Base Year Amount,
and also chose to appeal the amended NPR’s for FY 1986-
14                                             No. 04-2839

1990. As we have explained, however, Michael Reese failed
to follow through with the FY 1986-1990 appeals, allowing
them to be dismissed. There is nothing in the statutes or
the regulations that requires an intermediary to reopen cost
reports a second time, when the CMS notification occurred
prior to the intermediary’s determination and could have
been appealed in the normal course.
  In that respect, Michael Reese’s claim is distinguishable
from the situations in Monmouth Medical Center v. Thomp-
son, 257 F.3d 807 (D.C. Cir. 2001) and In re: Medicare
Reimbursement Litigation, 414 F.3d 7 (D.C. Cir. 2005). In
those cases, the D.C. Circuit held that mandamus relief was
appropriate where, after the intermediaries had determined
payments due hospitals using the Secretary’s interpretation
of the law, the HCFA Administrator issued a ruling that
rescinded that prior interpretation of the law. Under the
HCFA Administrator ruling, the hospitals should have been
entitled to increased payments. The D.C. Circuit held that
the prior determinations should have been reopened under
the mandatory reopening provision in 42 C.F.R.
§ 405.1885(b) (1997), and given that non-discretionary duty
to reopen, mandamus relief was appropriate.
  Unlike those cases, however, the rulings at issue here
were issued prior to the intermediary determination, and
were the basis for the intermediary reopening those
years in the first place. Michael Reese complains merely
that the intermediary did not properly apply the law in its
determination. The Supreme Court considered an analogous
argument in Pittston Coal Group v. Sebben, 488 U.S. 105
(1988), and its analysis applies equally to this case.
  In Sebben, the Secretary of Labor, in response to the
Black Lung Benefits Reform Act (“BLBRA”), set forth
interim standards for establishing total disability. The
BLBRA further provided in 30 U.S.C. § 945 that claims
previously denied would, upon claimant’s request, be
No. 04-2839                                                 15

reopened and readjudicated under the interim standards.
Id. at 110. The claimants pursued that relief, and their
claims were readjudicated under those interim standards.
A portion of those interim standards, however, should not
have been applied to the claims, because it was more
restrictive than the prior criteria by the Secretary of
Health, Education and Welfare, and 30 U.S.C. § 902(f)(2)
forbade the use of more restrictive criteria. Id. at 113. The
result was that the claims should have been adjudicated
based on the less restrictive criteria.
  Although holding that the less restrictive criteria should
have been applied, the Supreme Court nonetheless reversed
the Eighth Circuit insofar as it granted mandamus relief to
those who had not exhausted remedies by appealing the
adverse determinations. The Court held that in order to be
entitled to mandamus relief, the claimants had to establish
not only a duty to apply the less restrictive criteria, but also
a duty to reopen final determinations. Id. at 122. The Court
rejected the Eighth Circuit’s reasoning that the Secretary
had never fulfilled her statutory duty to readjudicate the
claims because she failed to adjudicate the claims under
“the proper standards.” Id. at 121-22. This is similar to
Michael Reese’s contention that the Secretary never
fulfilled the obligation to adjust the FY 1986-90 cost reports
because it never applied the proper Base Year Amount. The
Supreme Court in Sebben dismissed this argument, stating:
    a basis for reopening can only be found if one interprets
    § 945 to override the principle of res judicata not just
    once, but perpetually, requiring readjudication and re-
    readjudication (despite the normal rules of finality)
    until the Secretary finally gets it right. . . . That is not
    the way the law works. The pre-BLBRA claimants
    received what § 945 required: a readjudication of their
    cases governed by the new statutorily prescribed
    standards. Assuming they are correct that these new
    standards would have entitled them to benefits, they
16                                              No. 04-2839

     would have been vindicated if they had sought judicial
     review; they chose instead to accept incorrect adjudica-
     tion. They are in no different position from any claim-
     ant who seeks to avoid the bar of res judicata on the
     ground that the decision was wrong.
Id. at 122-23. Accordingly, the Court reversed the decision
of the Eighth Circuit which had granted mandamus relief.
   Michael Reese fares no better. The FY 1986-90 cost
reports were reopened by the intermediary in light of the
change in law. The intermediary then issued amended
NPRs for those years, and there was no subsequent change
in law or other notification by the CMS that would require
another reopening. Instead, Michael Reese’s claim is simply
that the intermediary’s calculations were erroneous because
the Base Year Amount was improper. Assuming they are
correct that the cost reports should have been recalculated
in light of the settlement of the Base Year Amount, they
could have been vindicated if they had pursued their
administrative and judicial remedies with respect to those
fiscal years. There was no non-discretionary statutory
requirement that the intermediary again reopen the cost
reports to afford the relief Michael Reese could have
obtained by simply pursuing the appeals in the first place.
Accordingly, the district court properly dismissed the case
for lack of subject matter jurisdiction. The decision of the
district court is AFFIRMED.
No. 04-2839                                         17

A true Copy:
      Teste:

                    ________________________________
                    Clerk of the United States Court of
                      Appeals for the Seventh Circuit

               USCA-02-C-0072—10-14-05