Court Opinion

ID: 9825952
Source: CourtListenerOpinion
Date Created: 2023-09-01 15:01:02.34647+00
Date Added: 2024-06-11T15:02:12.453865
License: Public Domain

United States Court of Appeals
         FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 6, 2022           Decided September 1, 2023

                        No. 20-5350

       POMONA VALLEY HOSPITAL MEDICAL CENTER,
             APPELLEE/CROSS-APPELLANT

                              v.

                    XAVIER BECERRA,
                APPELLANT/CROSS-APPELLEE

        Appeal from the United States District Court
                for the District of Columbia
                 (No. 1:18-cv-02763-ABJ)

    Sven C. Collins argued the cause for appellee/cross-
appellant. On the briefs were Robert L. Roth and Kelly A.
Carroll.

     Stephanie R. Marcus, Attorney, U.S. Department of
Justice, argued the cause for appellant/cross-appellee. On the
briefs were Mark B. Stern and Brian M. Boynton.

    Before: MILLETT, KATSAS, and WALKER, Circuit Judges.

    Opinion for the Court filed by Circuit Judge KATSAS.
                                2

     KATSAS, Circuit Judge: Hospitals receive greater payment
if their Medicare patients are disproportionately low-income
individuals entitled to federal supplemental security income
benefits. Pomona Valley Hospital Medical Center contends
that the Department of Health and Human Services
undercounted the number of its Medicare patients who were
entitled to SSI benefits and thus undercompensated the hospital
for treating them. Prohibited from directly accessing the
relevant SSI data, Pomona sought to prove the undercount
through data from state benefit programs that piggyback on
SSI. In an administrative proceeding, Pomona introduced
expert testimony explaining how the state data derives from
and overlaps with the federal SSI data. HHS offered no
evidence in response. The Provider Reimbursement Review
Board held that Pomona failed to prove the undercount, but the
district court set aside its decision and remanded the case to the
Board for further proceedings. We affirm the district court.

                                I

                                A

     The Department of Health and Human Services
administers Medicare, which provides health insurance to the
elderly and disabled. 42 U.S.C. § 1395c. For treating
Medicare beneficiaries, hospitals receive payments fixed by a
statutory formula. Cape Cod Hosp. v. Sebelius, 630 F.3d 203,
205 (D.C. Cir. 2011). One input is the “disproportionate share
hospital” adjustment, which increases payments to hospitals
that serve “a significantly disproportionate number of low-
income patients.” 42 U.S.C. § 1395ww(d)(5)(F)(i)(I). This
adjustment depends in part on something called the “Medicare
fraction,” which represents the percentage of a hospital’s
Medicare patients who are entitled to SSI benefits. More
                                3
precisely, the numerator of this fraction is the number of patient
days attributable to Medicare patients who are “entitled to
supplement[al] security income benefits,” and the denominator
is the total number of patient days attributable to Medicare
patients. Id. § 1395ww(d)(5)(F)(vi)(I); see Becerra v. Empire
Health Found., 142 S. Ct. 2354, 2359–60 (2022). The upshot
is that hospitals may receive larger payments if more of their
patients are entitled to SSI benefits.

     The Social Security Administration administers the SSI
program. It gives cash payments to needy individuals who are
elderly, blind, or disabled. 42 U.S.C. § 1382(a). Eligibility is
determined monthly and depends on an individual’s income.
Id. § 1382(c)(1). Because income and thus eligibility may vary
over time, SSA tracks monthly (1) whether individuals enrolled
in the SSI program qualified for and received the payment and
(2) the reason why or why not. SSA has developed several
dozen codes for this purpose, which consist of a letter and a
two-digit number. For instance, the code “N01” indicates that
an enrollee failed to receive a payment for a particular month
(“N”) because he or she had excess income during that time
(“01”).

     States may contract with SSA to provide further assistance
to needy residents. 42 U.S.C. § 1382e. SSA makes the state
supplementary payments (SSP) for the state, which then must
reimburse SSA. Id. § 1382e(d). SSP benefits must go to all
state residents receiving SSI benefits, but the state may choose
to extend them to certain other residents. Id. §1382e(b).

                                B

    To determine the Medicare fractions of individual
hospitals, HHS must rely on SSI data received from SSA. HHS
makes these determinations through the Centers for Medicare
                               4
and Medicaid Services, which administers Medicare for HHS.
In 2008, a district court held that CMS arbitrarily failed to use
the best available SSI data in determining Medicare fractions.
Baystate Med. Ctr. v. Leavitt, 545 F. Supp. 2d 20, 44 (D.D.C.
2008). In response, CMS promulgated a rule setting forth a
new methodology for doing so. 75 Fed. Reg. 50,042, 50,275–
86 (Aug. 16, 2010) (2010 Rule). CMS applies this rule to
determinations for years before 2010 as well as after.

     Under the 2010 Rule, CMS uses two data sources to
determine Medicare fractions. First, it maintains a Medicare
Provider Analysis and Review (MedPAR) file, which contains
information about hospital use by all Medicare beneficiaries.
From this data, CMS determines a hospital’s total patient days
attributable to Medicare beneficiaries—i.e., the denominator of
its Medicare fraction. 75 Fed. Reg. at 50,277–78. Second,
CMS obtains an expanded SSI-eligibility data file from SSA.
Id. This file enables CMS to identify, on a month-by-month
basis, SSI enrollees to whom SSA has assigned one of three
codes: C01, M01, and M02. In the 2010 Rule, CMS analyzed
the various SSA codes and concluded that these three—and no
others—“accurately capture[] all SSI-entitled individuals
during the month(s) that they are entitled to receive SSI
benefits.” Id. at 50,281. CMS cross-checks whether Medicare
beneficiaries listed in its MedPAR file have been assigned one
of these three codes at the time of their hospitalization. The
numerator of a hospital’s SSI fraction is the number of patient
days attributable to Medicare patients who have been so
assigned one of these codes.

     The Medicare Prescription Drug, Improvement, and
Modernization Act requires CMS to give each hospital the
“data necessary” for the hospital to “compute the number of
patient days” used in its Medicare fraction. Pub. L. No. 108–
173, § 951, 117 Stat. 2066, 2427 (2003). To that end, CMS
                                5
gives each hospital the MedPAR data for that hospital, together
with “the results of the data match of SSI eligibility
information.” 70 Fed. Reg. 47,278, 47,439 (Aug. 12, 2005). In
other words, CMS tells the hospital which of its patient days
recorded in the MedPAR file have been matched to patients
entitled to SSI benefits when they were hospitalized. But CMS
does not give hospitals the SSI eligibility file that it receives
from SSA. According to CMS, federal privacy laws prohibit it
from disclosing this information, as does CMS’s data-sharing
agreement with SSA. Id. at 47,440. In the 2010 Rule, CMS
once again declined to give hospitals “access to patient-level
detail data, including SSI eligibility information.” 75 Fed. Reg.
at 50,279.

                                C

     To receive compensation for treating Medicare patients, a
hospital must submit annual cost reports to a Medicare
Administrative Contractor, which determines the hospital’s
total annual reimbursement on behalf of CMS. 42 U.S.C.
§ 1395kk-1; 42 C.F.R. § 405.1801(b)(1). In making this
determination, the Contractor uses the Medicare fraction
determined by CMS. Id. §§ 405.1803, 412.106(b)(2).

     Hospitals may appeal a Contractor’s reimbursement
determination to the Provider Reimbursement Review Board,
an administrative tribunal within HHS.                 42 U.S.C.
§ 1395oo(a)(1)(A). Before the PRRB, the Contractor stands in
for CMS. The Board must determine “whether the [hospital]
carried its burden of production of evidence and burden of
proof by establishing, by a preponderance of the evidence, that
the [hospital] is entitled to relief on the merits of the matter at
issue.” 42 C.F.R. § 405.1871(a)(3).
                               6
     A final PRRB decision is reviewable in district court under
the standards for judicial review set forth in the Administrative
Procedure Act. 42 U.S.C. § 1395oo(f)(1).

                               II

                               A

     Pomona Valley Hospital Medical Center is an acute-care
hospital located some 30 miles east of downtown Los Angeles.
This case involves Pomona’s Medicare fractions for fiscal
years 2006 to 2008. Suspecting that CMS’s determinations
were too low, Pomona sought to redo them. To that end, it
obtained the matched MedPAR data from CMS. But CMS
refused to give Pomona any underlying data from the SSI
eligibility file, consistent with its longstanding regulations.
SSA also refused to give Pomona the relevant data.

     Undeterred, Pomona sought to determine its Medicare
fractions with data obtained from state agencies administering
two benefit programs that piggyback on SSI. One of these is
the program affording state supplemental payments to needy
Californians. The other is Medi-Cal, through which California
participates in Medicaid and thus provides health insurance to
needy Californians. The state SSP benefit has a higher income
ceiling than does the federal SSI benefit, so some Californians
receive SSP but not SSI benefits. No Californian receives SSI
but not SSP benefits. Californians who receive either SSI or
SSP benefits are also eligible for Medi-Cal during months in
which they receive these benefits. The California Department
of Healthcare Services, which administers Medi-Cal,
ascertains this population of beneficiaries through monthly
data provided by SSA. Upon receiving the SSA data, Medi-
Cal assigns codes 10, 20, or 60 to individuals who are aged,
blind, or disabled respectively and who are eligible for either
                               7
SSI or SSP benefits. The data provided by SSA does not
distinguish between SSI and SSP eligibility, so neither do the
Medi-Cal codes. Medi-Cal makes its data and codes available
to providers, which use them to bill Medi-Cal for services
provided to beneficiaries. And Medi-Cal uses the data to
determine how much reimbursement it can claim from
Medicaid. Expert testimony established all of this, and none of
it is disputed.

     Pomona determined its Medicare fractions using Medi-Cal
codes 10, 20, and 60 to measure the relevant numerators—i.e.,
the number of its patient days attributable to patients receiving
SSI benefits at the time of their hospitalization. To eliminate
patients who received SSP but not SSI benefits, Pomona turned
to data obtained from the California Department of Social
Services, which coordinates with SSA to administer the state
SSP program. This Department gave Pomona data showing the
total number of Californians receiving SSI and SSP benefits, as
well as the total number of Californians receiving only SSP
benefits. Using this data, Pomona reduced the numerators in
its calculations by about 16.5 percent, which, over the years in
question, was the statewide percentage of individuals receiving
SSP but not SSI benefits.

     Pomona compared its results (based on adjusted Medi-Cal
data) with CMS’s results (based on SSI data). Over the three
fiscal years at issue, the Medicare fractions determined by
CMS were about 20 percent lower than those determined by
Pomona. That difference equates to disputed Medicare
reimbursements of over $3 million.

     Pomona proposed a way to settle the dispute. It offered to
have CMS or SSA review a sample of 50 records from its
Medi-Cal dataset, including 20 randomly selected records and
the ten longest unmatched admissions—i.e., the ten admissions
                               8
of Medicare patients with the lengthiest hospital stays for
which Pomona and CMS disagreed about whether the patient
was SSI-eligible at the time of hospitalization. Pomona offered
to be bound by the results of this sample review. CMS
declined, citing “workload concerns.” J.A. 44.

    As required by law, the assigned Contractor used the
Medicare fractions calculated by CMS in determining the
reimbursement owed to the hospital.

                               B

     Pomona appealed to the PRRB. It did not challenge the
methodology set forth in the 2010 Rule, including the protocols
for selecting and matching the relevant SSA and CMS data.
Instead, it claimed that CMS must have miscalculated because
of inaccurate transmission of data from SSA to CMS, coding
errors, or other systemic problems with the matching process.

     Before the Board, Pomona presented testimony supporting
its use of Medi-Cal data to count patient days attributable to
patients receiving SSI or SSP benefits. Pomona’s star witness
was Stan Rosenstein, who oversaw Medi-Cal eligibility issues
for the California Department of Healthcare Services for over
a decade.      Rosenstein outlined the operation of, and
relationship among, the SSI, SSP, and Medi-Cal programs. He
explained how Medi-Cal, insofar as it affords benefits to
recipients of SSI or SSP benefits, identifies those beneficiaries
through eligibility data provided to it monthly by SSA. He
explained how Medi-Cal, based on that data, assigns codes 10,
20, and 60 to patients who are eligible for either benefit. He
explained how healthcare providers, Medi-Cal, and Medicaid
rely on these codes in deciding which government agencies
will pay for which treatments for which patients—and how
much each agency will pay. He explained how Pomona used
                               9
the Medi-Cal data to determine which of its patient days were
attributable to patients entitled to SSI or SSP benefits at the
time of their hospitalization. And he opined that the Medi-Cal
data and coding systems, which have been in use for four
decades, are reliable for these purposes.

     Pomona also presented testimony supporting its use of
statewide averages to eliminate patient days attributable to its
SSP-only patients. According to Rosenstein, the SSI and SSP
populations do not vary much over time. And if anything,
Pomona’s use of statewide averages likely overcorrected for its
SSP-only patients: The hospital serves a relatively poor part of
the state, so it likely had a disproportionately high percentage
of patients in the lowest band of income, thus qualifying them
for SSI as well as SSP benefits.

     Finally, Pomona presented testimony supporting its
conclusion that the observed counting discrepancies indicated
some systemic problem in how CMS was acquiring SSA data
and matching it to CMS’s own MedPAR data. Despite decades
of experience with Medi-Cal eligibility issues, Rosenstein had
never before seen such discrepancies and could think of no
other way to reconcile them. So, he concluded that there had
to be “something wrong” with the CMS data. J.A. 193.
Pomona’s other principal witness corroborated this view. Tzvi
Hefter, who once headed the CMS division that determined
DSH adjustments, testified that the “really huge” difference
between the Medi-Cal and CMS data indicated “some kind of
systemic problem” with the latter. J.A. 167. In sum, the
experts could think of no other reason why the Medi-Cal data
revealed thousands of Medicare patient days attributable to
SSI-eligible patients that were somehow dropped in the data-
matching process between SSA and CMS.
                               10
    The Contractor presented no countervailing evidence or
explanation. Instead, it criticized Pomona for relying on “data
from a secondary source, instead of the primary databases
maintained by the SSA and CMS.” J.A. 276.

     The Board concluded that Pomona had failed to prove an
undercount. It “recognize[d] Pomona’s difficulty” because
neither SSA nor CMS would provide it with any SSI eligibility
data and because neither agency would consider a sample of
Pomona’s proxy data based on Medi-Cal eligibility. J.A. 44.
Nonetheless, the Board saw possible differences among the
Medi-Cal, SSA, and CMS data, which it thought Pomona had
not adequately addressed. The Board thus concluded that the
hospital “did not submit sufficient quantifiable data in the
record to prove that the SSI percentages calculated by CMS …
were flawed.” Id. at 46.

                               C

     On review, the district court held that the Board’s decision
was unsupported by substantial evidence, so it granted
summary judgment to Pomona. The court noted that the
Contractor “did not even bother to produce evidence at the
hearing” to justify CMS’s Medicare fractions. Pomona Valley
Hosp. Med. Ctr. v. Azar, No. 18-2763, 2020 WL 5816486, at
*11 (D.D.C. Sept. 30, 2020). The court also faulted the Board
for placing too much weight on “minor” objections to
Pomona’s affirmative case. Id. The court held that CMS had
to do more because it had sole access to SSI eligibility records
that could conclusively settle the dispute. Applying our
decision in Atlanta College of Medical and Dental Careers,
Inc. v. Riley, 987 F.2d 821 (D.C. Cir. 1993), the court imposed
on CMS what it characterized as a shift in the burden of
producing evidence on remand. Specifically, the court ordered
that CMS would have to provide either “countervailing
                                11
evidence or a reason, not based on the insufficiency of the
movant’s showing,” for rejecting Pomona’s affirmative case.
2020 WL 5816486, at *11 (cleaned up).

     Pomona asked the district court for various forms of
additional relief, including the imposition of an adverse
inference establishing that Pomona’s determination of its
Medicare fractions was correct. The court declined to impose
an adverse inference. Instead, it stopped at setting aside the
PRRB’s decision and remanding the case to the Board for
further proceedings consistent with its opinion. 2020 WL
5816486, at *12.

                                III

     We review the district court’s grant of summary judgment
de novo. Forsyth Mem’l Hosp. v. Sebelius, 639 F.3d 534, 537
(D.C. Cir. 2011). Like that court, we must review the PRRB’s
decision under familiar APA standards.              42 U.S.C.
§ 1395oo(f)(1). We thus must consider whether the Board’s
decision was supported by “substantial evidence when the
[administrative] record is viewed as a whole.” Id. § 1395oo(d);
see also 5 U.S.C. § 706(2)(E).

     Substantial evidence is “such relevant evidence as a
reasonable mind might accept as adequate to support a
conclusion.” NLRB v. Ingredion Inc., 930 F.3d 509, 514 (D.C.
Cir. 2019) (cleaned up). In other words, “substantial evidence”
is evidence that is “enough to justify, if the trial were to a jury,
a refusal to direct a verdict when the conclusion sought to be
drawn … is one of fact for the jury.” Ass’n of Data Processing
Serv. Orgs., Inc. v. Bd. of Governors of the Fed. Reserve Sys.,
745 F.2d 677, 684 (D.C. Cir. 1984) (Scalia, J.) (cleaned up);
see also Sec’y of Labor v. Knight Hawk Coal, LLC, 991 F.3d
1297, 1308 (D.C. Cir. 2021) (“substantial evidence” turns on
                              12
whether a “reasonable factfinder” could have reached the
agency’s conclusion) (cleaned up). Because the parties both
take the position that CMS was required to use the “best
available data” when calculating Pomona’s Medicare fraction,
we assume without deciding that CMS was so obligated. See
Dist. Hosp. Partners, L.P. v. Burwell, 786 F.3d 46, 56 (D.C.
Cir. 2015).

     Before the PRRB, Pomona bore the “burden of
production” and the “burden of proof by establishing, by a
preponderance of the evidence,” that it was “entitled to relief
on the merits.” 42 C.F.R. § 405.1871(a)(3). Thus, to set aside
the adverse Board decision on substantial-evidence review,
Pomona must show that the evidence was so one-sided as to
compel the Board to resolve the disputed factual issues in its
favor—the administrative equivalent of a directed verdict for
the plaintiff. That is a decidedly difficult standard, but we
conclude that Pomona met it here.

                              IV

                              A

     The only evidence before the Board was Pomona’s
affirmative case that the CMS matching process missed
thousands of Medicare patient days attributable to patients who
qualified for SSI benefits. As summarized above, we think that
case was substantial. The Board levelled three criticisms
against it, which we address in turn.

     First, the Board noted that the Medi-Cal data included
patient days for patients receiving SSP but not SSI benefits.
But as the Board itself acknowledged, Pomona “eliminated
these SSP only days” based on statewide averages of the
relative size of the SSI and SSP populations. J.A. 44.
                               13
Rosenstein testified that this reduction likely overcorrected for
SSP-only beneficiaries, given the income demographics of the
nearby area relative to the state as a whole. Rosenstein and
Hefter—with collective expertise about Medi-Cal and CMS—
both testified that the remaining gap could be explained only
by some systematic error in the SSA/CMS matching process.
And the Board gave no reason to question the adjustment for
SSP-only patients based on statewide averages.

     The Board also pointed to two specific populations who
temporarily receive or retain Medi-Cal eligibility during a
period when they are ineligible for SSI benefits. The first
group involves long-term nursing-home residents. Individuals
who live in nursing homes for more than three months may lose
SSI benefits because payments made to the nursing-home
count as income to the patient. Yet such patients temporarily
retain their Medi-Cal eligibility while that program determines
whether there is any independent ground for covering them.
The second group involves first-time applicants for SSI and
Medi-Cal benefits. A discrepancy could arise because Medi-
Cal eligibility begins at the beginning of the month when the
person applies, while SSI eligibility begins at the beginning of
the following month. The Board marked down Pomona’s case
because the hospital did not estimate the size of these two
populations “from its own records.” J.A. 44–45.

     The evidence currently in the administrative record
suggests that these two groups, whatever their exact size, do
not bridge the sizable gap between Pomona’s and CMS’s
respective numbers—a difference of several thousand inpatient
days attributable to SSI-eligible patients. Consider the timing
difference for first-time applicants. To appear as false positives
in Pomona’s calculation, such individuals would have to apply
for both SSI and Medi-Cal benefits for the first time in the same
month, receive fast Medi-Cal approvals, and be hospitalized in
                               14
that same month as Medicare patients. As Rosenstein
explained, SSI enrollment is “fairly stable” in California,
patients do not generally apply for SSI and Medi-Cal “for the
first time at the same time,” and the impact of these patients on
Pomona’s calculation thus “would be minimal.” J.A. 54. The
same is true for the timing issue involving nursing-home
residents, which covers only long-term residents hospitalized
as Medicare patients in the interval between when their SSI and
Medi-Cal codes change. Using statewide statistics and some
back-of-the-envelope math, Pomona estimated that fewer than
10 such patients would likely show up in its SSI-fraction
calculations in any given year. And neither the Board nor the
Contractor countered these estimates. Given the lack of
contrary evidence in the record, such discrepancies appear
immaterial and suggest no substantial flaw in Pomona’s
methodology.

     Finally, the Board faulted Pomona for failing to provide
what it described as a “crosswalk” between the relevant Medi-
Cal and SSI codes, to show that Medi-Cal codes 10, 20, and 60
“identified only those individuals with an SSI code of C01,
M01, or M02.” J.A. 46. But Pomona never suggested that the
relevant state and federal codes bear this relationship. Instead,
it explained that the relevant Medi-Cal codes establish
eligibility for SSI or SSP benefits, with many SSP-only
beneficiaries presumably coded by SSA as “N01” to reflect
ineligibility for SSI benefits due to excess income. Moreover,
Pomona provided expert testimony that the Medi-Cal codes
have reliably served to establish SSI or SSP eligibility for
decades and that they support commercial and governmental
decisions made every day to provide and pay for medical care
for needy Californians. Pomona then made a more-than-fair
adjustment to eliminate Medicare patients who were SSP-only
beneficiaries, which still left thousands of patient days
attributable to SSI-eligible patients unaccounted for by CMS.
                                15
Pomona provided uncontroverted evidence that two potential
difficulties with its approach amounted to little more than
rounding errors. And it proffered creditable testimony from
two experts indicating that the only explanation for the
discrepancy was some error in CMS’s collection or matching
of data. By contrast, the Contractor remained silent, failing to
give even a hint as to why Pomona’s adjusted data might be
overinclusive. Given the strength of the hospital’s showing,
and the absence of any countervailing evidence, the Board’s
conclusion that Pomona had failed to prove an undercount was
unreasonable.

                                B

     Atlanta College reinforces our conclusion. It involved
schools expelled from a student-loan program on the ground
that their default rates were too high. In administrative
proceedings, the schools’ expert identified “hundreds of
suspected errors” in the agency’s calculation of the rates. 987
F.2d at 825. The agency rejected the schools’ submission
because it “did not control for other factors” that might affect
the relevant calculations. Id. Yet that analysis “placed the
schools in a ‘catch-22’ situation: the schools did not have the
necessary material in their own records” to address the
concerns identified by the agency. Id. at 826.

     The district court in Atlanta College set aside the
administrative expulsion order, and this Court affirmed. We
expressed concern that the schools’ statutory right to appeal
ineligibility determinations “would be meaningless” if the
Secretary of Education “could reject for ‘hypothetical’ reasons
a school’s showing of a mistaken calculation backed up by all
the information to which the schools had access.” 987 F.2d at
830. In ruling for the schools, we stressed three critical features
of the case. First, the schools had “gone about as far as they
                              16
can go” in presenting “specific allegations supported by all the
information available to them.” Id. at 831 (cleaned up).
Second, the schools’ submission was “sufficient, if undisputed,
to require the Secretary to reverse his eligibility
determination.” Id. Third, the Secretary had failed “to produce
countervailing evidence or a reason, not based on the
insufficiency of the school’s showing, that explains why the
school’s allegations have not been accepted.” Id. (cleaned up).

     Similar considerations are present here. Only CMS or
SSA possess the SSI-eligibility data that would definitively
establish the correct numerators for Pomona’s Medicare
fractions. So, Pomona went about as far as it could, in
attempting to reverse-engineer the SSI-eligibility data from
publicly available data regarding SSI and SSP eligibility, plus
publicly available data regarding the relative size of those two
populations. Moreover, as shown above, Pomona’s affirmative
case was sufficient, if undisputed, to require the PRRB to rule
for it. And neither the Contractor nor the PRRB produced
countervailing evidence or a reason for rejecting Pomona’s
case other than its supposed factual insufficiency. To the
contrary, the Contractor merely criticized Pomona for relying
on “data from a secondary source,” when the primary data was
available only to SSA or CMS. J.A. 276. And the PRRB, as
explained above, merely speculated about unsubstantiated
problems regarding use of the Medi-Cal eligibility data, despite
Pomona’s showing that this data was generally reliable and that
all known concerns with it could be reasonably accounted for
(elimination of the SSP-only population) or were immaterial on
this record (timing issues regarding nursing-home residents
and first-time applicants).
                                17
                                V

     In its cross-appeal, Pomona contends that the district court
erred in refusing to impose on CMS an adverse inference based
on CMS’s refusal to disclose relevant data in its SSI-eligibility
file. Adverse inferences rest on the theory that if a party
unjustifiably refuses to produce relevant evidence, the party
likely views the evidence as unfavorable. See Int’l Union v.
NLRB, 459 F.2d 1329, 1336 (D.C. Cir. 1972). We cannot draw
such an inference here, where the disputed evidence involves
sensitive details about the financial or other circumstances of
individual patients and where CMS is prohibited by contract, if
not by law, from disclosing the data. See 75 Fed. Reg. at
50,279; 70 Fed. Reg. at 47,440.

     Pomona also invokes language from Atlanta College
indicating a “shift” in the “burden of production.” 987 F.2d at
831 n.14. Pomona notes that if a burden of production in civil
litigation shifts to the defendant, and if the defendant then fails
to produce any evidence, the court must enter judgment for the
plaintiff. See, e.g., Tex. Dep’t of Cmty. Affairs v. Burdine, 450
U.S. 248, 254 (1981). Pomona then reasons that because the
Contractor failed to produce evidence to counter Pomona’s
case before the PRRB, despite the opportunity and incentive to
do so, the Contractor should not get a second bite at the apple
on remand.

     The short answer is that Atlanta College forecloses that
argument. Like this case, it involved judicial review of agency
action, rather than civil litigation conducted in a court. The
schools had proven a case that was “sufficient, if undisputed,”
to compel an administrative judgment in their favor. 987 F.2d
at 831. And the Secretary of Education had failed to produce
countervailing evidence to dispute it. See id. Yet we did not
order the administrative adjudicator to accept the schools’
                              18
position on remand. To the contrary, we affirmed a district
court order that merely required the adjudicator to consider the
schools’ position more carefully. See Atlanta Coll. of Med. &
Dental Careers, Inc. v. Alexander, 792 F. Supp. 114, 123
(D.D.C. 1992). And in doing so, we made clear that the schools
would be entitled to an administrative judgment if, but only if,
the Secretary on remand failed “to produce countervailing
evidence or a reason, not based on the insufficiency of the
school’s showing, that explains why the school’s allegations
have not been accepted.” 987 F.2d at 831.

      The same course is appropriate here. Although Pomona’s
case compels a ruling in its favor “if undisputed,” we do not
foreclose the possibility that CMS may be able to dispute it
successfully. And if CMS does introduce evidence to dispute
it, the burden of proof will remain with Pomona. 42 C.F.R.
§ 405.1871(a)(3). All we hold today is that Pomona’s showing
was robust enough to require some response from the agency.

                              VI

    The district court correctly set aside the PRRB’s order and
remanded to the Board for further proceedings without any
adverse inference.

                                                      Affirmed.