Case 1:22-cv-01530 Document 1 Filed 05/31/22 Page 1 of 12
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF COLUMBIA
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`ASCENSION BORGESS HOSPITAL
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`1521 Gull Road
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`Kalamazoo, MI 49048
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` Plaintiff,
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`XAVIER BECERRA, In his Capacity as
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`Secretary of the U.S. Department
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`of Health and Human Services
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`200 Independence Avenue, S.W.
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`Washington, D.C. 20201
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` Defendant.
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`_________________________________________ )
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`COMPLAINT FOR JUDICIAL REVIEW OF FINAL ADVERSE AGENCY DECISION
`ON MEDICARE REIMBURSEMENT
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`JURISDICTION AND VENUE
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`1. This is a civil action brought to obtain judicial review of a final decision rendered on March
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`31, 2022, by the Provider Reimbursement Review Board (“PRRB”), acting as a component of the
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`United States Department of Health and Human Services (“HHS"). The decision for which judicial
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`review is hereby sought is PRRB Case No. 13-1947.
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`2. This action arises under Title XVIII of the Social Security Act, as amended (42 U.S.C. §1395
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`et. seq.), hereinafter referred to as the "Medicare Act" or the "Act", and the Administrative
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`Procedure Act, 5 U.S.C. § 706.
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`3. This Court has jurisdiction under 42 U.S.C. §1395oo(f), 28 U.S.C. § 1331, and 28 U.S.C. §
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`1361. Venue lies in this judicial district pursuant to 42 U.S.C. §1395oo(f), and 28 U.S.C. § 1391(e)
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`4. Provider timely filed its appeal with the Provider Reimbursement Review Board pursuant to
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`42 U.S.C. §1395oo(a)(3).
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`5. This civil action is filed within sixty (60) days of the date Provider received that decision of
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`the Board wherein the “...Board hereby dismisses the case in its entirety and removes it from the
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`Board’s docket”, based on, “…the untimely and deficient response and the failure to comply with
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`the CIRP group regulations.”
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`PARTIES
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`6. Plaintiff, ASCENSION BORGESS HOSPITAL (Medicare Provider Number 23-0177) files
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`this appeal from the final decision of the PRRB dated March 31, 2022, dismissing Plaintiff’s appeal
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`of Case No. 13-1947 (true and correct copy attached as Exhibit “B”). The subject of that appeal to
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`the PRRB concerns Fiscal Year Ending June 30, 2008.
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`7. Plaintiff named herein (hereinafter, “Plaintiff,” “Plaintiff Provider” or “Provider”) is an acute
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`care, in-patient healthcare facility that serves a disproportionate share of low-income patients. At
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`all relevant times, Plaintiff Provider had a Medicare provider agreement with the Secretary of
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`Health and Human Services and was eligible to participate in the Medicare program.
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`8. As set forth more fully below, Plaintiff objects to its dismissal of its appeal by the PRRB as
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`arbitrary, capricious and a violation of the rightful and allowing claims of Plaintiff.
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`9. Also as set forth more fully below, Plaintiff objects in particular to the Board’s dismissal of two
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`of the seven appealed issues; to wit: (a) DSH/SSI Percentage (Provider Specific) and (b) DSH/SSI
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`Percentage (Systemic Errors) that had been dismissed in advance of the dismissal of Plaintiff’s
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`entire appeal, those two issues dismissed based solely upon jurisdictional grounds.
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`10. Defendant, Xavier Becerra, Secretary of the U.S. Department of Health and Human Services
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`(“Secretary”), or his predecessors in office, is the federal officer responsible for the administration
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`of the Medicare program. Defendant Becerra is sued in his official capacity.
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`MEDICARE STATUTORY AND REGULATORY BACKGROUND
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`11. The Medicare program was established to provide health insurance to the age and disabled. 42
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`U.S.C. §§1395-1395cc. The Centers for Medicare and Medicaid Services (CMS), formerly the
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`Health Care Financing Administration (HCFA), is the operating component of the Department of
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`Health and Human Services (HHS) charged with administering the Medicare program.
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`12. Medicare reimburses the operating costs of inpatient Provider services primarily through the
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`Prospective Payment System (PPS). 42 U.S.C. §1395ww(d). The PPS statute contains a number of
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`provisions that adjust reimbursements based on Provider- specific factors. See 42 U.S.C.
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`§1395ww(d)(5). This case involves the Provider-specific disproportionate share (DSH) adjustment,
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`which requires the Secretary to provide increased PPS reimbursement to Providers that serve a
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`"significantly
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`disproportionate
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`number
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`of
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`low-income
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`patients."
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`42 U.S.C.
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`§
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`1395ww(d)(5)(F)(i)(I).
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`13. Whether a Provider qualifies for the DSH adjustment, and how large an adjustment it receives,
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`depends on
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`the Provider's "disproportionate patient percentage (DPP)." 42 U.S.C. §
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`1395ww(d)(5)(F)(v). The DPP is the sum of two fractions, the "Medicare and Medicaid fractions,"
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`for a Provider's fiscal period. 42 U.S.C. §1395ww(d)(5)(F)(vi). Providers whose DSH percentages
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`meet certain thresholds receive an adjustment which results in increased PPS payments for inpatient
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`Provider services. 42 U.S.C. §1395ww(d)(5)(F)(ii).
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`14. The first fraction’s numerator is the number of Provider patient days for such period who (for
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`such days) were entitled to both Medicare Part A and Supplemental Security Income (SSI) benefits,
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`and the denominator is the number of patient days for patients entitled to Medicare Part A. Id. This
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`case involves this first fraction, which is hereinafter referred to as the SSI fraction, or the Medicare
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`fraction.
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`15. The second fraction’s numerator is the number of Provider patient days for patients who (for
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`such days) were eligible for medical assistance under a State Plan approved under Title XIX for
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`such period but not entitled to benefits under Medicare Part A, and the denominator is the total
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`number of the Provider’s patient days for such period. Id. The second fraction is frequently referred
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`to as the Medicaid fraction.
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`16. The SSI program is administered by the Social Security Administration (SSA); therefore,
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`identifying patients who were entitled to SSI during their Providerization requires access to SSA’s
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`SSI data. To implement the DSH legislation, the number of patient days for those patients entitled
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`to both Medicare Part A and SSI is determined by matching data from the MEDPAR file, which is
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`Medicare’s database of Provider inpatients, with a file created for CMS by SSA to identify SSI-
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`eligible individuals.
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`17. CMS’ payment and audit functions under the Medicare program are contracted out to insurance
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`companies known as fiscal intermediaries (hereinafter, the “MAC”). Fiscal intermediaries
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`determine payment amounts due the providers under Medicare law and regulations. 42 U.S.C.
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`§1395h, 42 C.F.R. §§413.20(b) and 413.24(b). Although the Intermediary calculates the DPP, it is
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`CMS that computes the SSI fraction.
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`18. At the close of its fiscal year, a provider must submit a cost report to the fiscal Intermediary
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`showing the costs it incurred during the fiscal year and the portion of those costs to be allocated to
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`Medicare. 42 C.F.R. §413.20. The fiscal Intermediary reviews the cost report, determines the total
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`amount of Medicare reimbursement due the provider and issues the provider a Notice of Program
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`Reimbursement (NPR). 42 C.F.R. §405.1803.
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`19. A provider dissatisfied with the MAC’s final determination of total reimbursement may file an
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`appeal with the Provider Reimbursement Review Board (PRRB) or (Board) within 180 days of the
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`issuance of the NPR. 42 U.S.C. §1395oo(a); 42 C.F.R. §405.1835.
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`SPECIFIC FACTS PERTAINING TO THIS CASE
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`20. Plaintiff filed a jurisdictionally proper appeal to the PRRB from the MAC’s final determination.
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`The seven (7) issues in this appeal are:
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`a. DSH/SSI Percentage (Provider Specific);
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`b. DSH/SSI Percentage (Systemic Errors);
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`c. DSH Payment - Medicaid Eligible Days
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`d. DSH Payment – Medicare Managed Care Part C Days
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`e. DSH Medicaid Eligible – Labor Room Days
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`f. DSH Dual Eligible Days; Exhausted Part A days
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`g. Outlier Payments – Fixed Loss Threshold
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`21. On April 9, 2014, the Medicare Contractor submitted a jurisdictional challenge over issue (a),
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`the realignment issue, and issue (b) the Systemic Errors issue.
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`22. In regard to issue (a), Plaintiff contended that the MAC did not determine Medicare DSH
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`reimbursement in accordance with the statutory instructions at 42 U.S. C. § 1395ww(d)(5)(F)(i).
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`Specifically, Plaintiff disagreed with the MAC’s calculation of the computation of the DSH
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`percentage set forth at 42 C.F.R. § 412.106(b)(2)(i) of the Secretary’s regulations, in that the SSI
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`percentage published by CMS was incorrectly computed because CMS failed to include all patients
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`that were entitled to SSI benefits in its calculation.
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`23. In regard to issue (b), Plaintiff contended that the MAC’s determination of the Medicare
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`Reimbursement for their DSH payments are not in accordance with the Medicare statute at 42
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`U.S.C. § 1395ww(d)(5)(F)(vi)(I).
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`24. On September 17, 2020, Plaintiff submitted its Final Position Paper including all seven (7)
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`appealable issues.
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`25. On November 17, 2021, the Board issued its Jurisdictional Decision (attached hereto as Exhibit
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`“B”). Ruling in part that a duplication existed with respect to issues (a) and (b), above, they
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`dismissed issue (a) - Provider Specific, and maintained issue (b) – Systemic Errors. By doing so,
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`the Board noted in its Decision that there existed a total of six (6) rather than seven (7) issues, that
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`is, issues (b) through (g), above.
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`26. In its November 17, 2021, Ruling, the Board also made the following determinations as to issues
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`(c) through (g). The Board noted that because Plaintiff was commonly owned by Ascension Health,
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`the remaining issues should be pursued in a Common Issue Related Part Group (“CIRP”) as
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`required by 42 C.F.R. § 405.1837(b)(1). As such, the Board ruled that with regard to issue (d),
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`above, there was a CIRP group for Ascension Health for this same issue (Case No. 13-1517-GC)
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`in which the Board granted EJR and closed the group on May 3, 2019. The Board noted that when
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`it determines that a group appeal bought under 42 C.F.R. § 405.1837(b)(1) is fully formed, no other
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`provider under current ownership or control may appeal to the Board the issue that is the subject of
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`the group appeal with respect to a cost reporting period that falls within the calendar year(s) covered
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`by the group appeal. Whereupon, the Board dismissed the Part C days issue (issue (d), above) from
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`Plaintiff’s appeal, contending that (a) the CIRP group was fully formed and had been fully
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`adjudicated and closed, and (b) Plaintiff should have been brought as part of the CIRP group for
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`that issue.
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`27. Finally, in its Ruling letter of November 17, 2021, the Board mandated that, within sixty (60)
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`days of the date of the letter (November 17, 2021), either (1) transfer the remaining common DSH
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`issues (issues c, e, f and g, above) to CIRP groups; or (2) attest that there are no other related
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`providers for [this] fiscal year (2008), that either have, are, or could be pursuing the [four] issues
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`remaining. They further advised that the sixty-day deadline was firm, and the Board had determined
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`to specifically exempt from the Alert 19 suspension of Board-set filing deadlines.
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`28. It is most noteworthy that the Board exempted the Alert 19 suspension of Board-set filing
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`deadlines, inasmuch as that Alert was issued specifically because of the burdens placed, not only
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`upon federal government agencies, but also upon hospitals whose main focus should be the
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`appropriate care of patients during this once-in-a-century pandemic. IF Alert 19 had applied and
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`had not been Board exempt, i.e., an exception made to this sixty-day FIRM deadline, it would have
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`been applied as follows:
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`ALERT 19: Temporary COVID-19 Adjustments to PRRB Processes (March
`25, 2020)
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`In keeping with guidance issued by the Office of Management and Budget (“OMB”), and public
`health precautions recommended
`in response
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`the COVID-19 virus,
`the Provider
`Reimbursement Review Board (“PRRB” or “Board”) and Centers for Medicare & Medicaid
`Services (“CMS”) support staff have temporarily adjusted their operations and are maximizing
`telework for the near future. The Board is an independent panel created to adjudicate Medicare
`Part A payment disputes of institutional Providers arising from final determinations. 42 U.S.C. §
`1395oo. The Board recognizes that the immediate focus and priorities of Providers should
`be on caring for their patients. Likewise, the Board wants to ensure the health and safety of all
`relevant parties before the Board, while continuing to operate in the most efficient manner
`possible. Accordingly, the Board is issuing this Alert to provide information on processes affected
`by the temporary change in its operations. In light of the developing circumstances surrounding
`COVID-19, the Board plans to continuously reassess its response and will issue additional
`updates through Board Alerts, as necessary (emphasis added).
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`29. Thereafter, on March 31, 2022, the Board issued its “Notice of Dismissal” (see, attached hereto
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`as Exhibit “B” of Plaintiff’s entire appeal. In its letter, the Board noted that prior to that date, it had
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`dismissed issue (a), above (duplicative of issue (b)) and dismissed issue (d) in its prior November 17,
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`2021, Ruling. The letter also correctly notes that Plaintiff had, prior to the March 31, 2022, letter,
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`dismissed issues (e) and (g), above. Hence, the remaining issues on appeal according to Plaintiff are
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`issues, (b), (c), (d), and (f). Plaintiff maintains that issue (d), “DSH Payment – Medicare Managed
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`Care Part C Days” was erroneously dismissed by the Board per its November 17, 2021, letter. Plaintiff
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`disagrees with that decision, see, below. Moreover, and despite its rash decision to dismiss issue (b)
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`based solely upon the fact that in its responsive letter of February 25, 2022, Plaintiff failed to list this
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`issue in its narrative, Plaintiff maintains that issue (b) is also ripe for this Court’s review.
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`30. The Board dismissed issues (c) and (f) (what the Board claims are the only two remaining issues;
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`as noted immediately above, Plaintiff disputes this claim), for Plaintiff’s failure to comply with the
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`Board’s sixty-day response deadline (see, paragraph 27, supra); rather, Plaintiff’s response was filed
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`February 25, 2022, some “39 days after the filing deadline”). (see, page 3, Exhibit “B”), failure to
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`explain why Plaintiff should not be transferred to a group appeal for either issues (issues (c) or (f) and
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`failed to certify that there were no other (and would not be any) Ascension Health providers with the
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`same issues for this year. Moreover, why Plaintiff failed to provide adequate data to prove eligibility
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`for each Medicaid patient day relative to issue (c). Noted the Board:
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` “The [Provider] has had ample opportunity to submit documentation of Medicaid eligible
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`days that were not claimed on their cost report…” (See, page 3 of Exhibit “B”) (emphasis
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`added).
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`Argument
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`31.
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` Plaintiff alleges that the Board’s dismissal of its appeal was arbitrary and capricious, and above
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`all unreasonable in declaring an exemption from Alert 19 with respect to the FIRM deadline imposed
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`upon Plaintiff to provide a full and complete response to the Board’s November 17, 2022, letter despite
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`the most recognized and understandable delays imposed upon most businesses during the COVID
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`pandemic. That which, of course led to the drafting of Alert 19 in the very first instance! Had Plaintiff
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`had more time (given the circumstances, described below) to respond fully to the Board’s November
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`17, 2022, letter, it surely would have.
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`32.
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`Plaintiff asserts that the Board should not have dismissed its appeal as to the DSH Part A issues
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`(issues (c) and (f), above) and the DSH Part C issue (issue (d) above), and for the following reasons:
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`a. Board Rules 3.1, section 47.3 provides that the Board should reinstate a case
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`dismissal for failure to comply with Board procedures upon a showing of good
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`cause.
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`b.
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`The Board established a 60-day deadline for a response to its November 17, 2021
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`letter and request for information but exempted the deadline from COVID Alert 19.
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`As noted in its May 24, 2022 “Letter for Partial Reinstatement” (see, Exhibit “C”),
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`the representative for Plaintiff expressed that its business and affairs had also not
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`been immune to the ongoing COVID 19 pandemic. Therefore, just as the Board had
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`been shown on occasion to extend deadlines to which the Board is statutorily bound
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`– notably, the 30-day deadline to decide an expedited judicial review request, the
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`business of the representative has been challenged due to COVID 19. Faced with
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`all the challenges endured by so many businesses throughout the U.S. due to the
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`pandemic, the representative had reduced staffing such that it responded as quickly
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`as possible, albeit “some 39 days after the filing deadline” as noted by the Board in
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`its March 31, 2022, dismissal letter (Exhibit “B”).
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`c. Moreover, and learning that the Board had dismissed Plaintiff’s appeal of the DSH
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`Part C and DSH Part A issues on the basis of alleged failure to comply with the
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`Common Issue Related Party (“CIRP”) Rule, Plaintiff argues that it is entirely
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`unnecessary and unreasonable for the Board to conduct proceedings regarding
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`either issue. As the Board is well aware, the DSH Part A issue will be determined
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`by decision of the United States Supreme Court in the case of Xavier Becerra,
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`Secretary of Health and Human Services v. Empire Health Foundation, Case No.
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`20-1312, a ruling which should be issued no later than the last week of June 2022.
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`d. Moreover, the Board is well aware that CMS Ruling 1739-R requires the Board to
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`remand the DSH Part C issue pending application of a revised Part C regulation
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`(pursuant to the U.S. Supreme Court’s ruling in Allina II) which is anticipated to
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`be issued within approximately one year’s time. Therefore, neither the Board nor
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`the MAC has been the least bit prejudiced regarding Plaintiff’s appeal of the DSH
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`Part A and Part C issues, because at present, there is absolutely no need for the
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`Board to conduct proceedings regarding these issues.
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`e.
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`Finally, Plaintiff argues that the Board apparently possesses knowledge that other
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`Ascension Health providers have appealed the Part A and Part C issues for Fiscal
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`Year Ending June 30, 2008 in a CIRP group (as indicated by its statement of
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`knowledge of these facts in its November 17, 2021 letter (Exhibit “A”), facts that
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`Plaintiff’s own representative would have no reason to possess.
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`33.
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`Based upon these factors, Plaintiff submits that in the interest of fairness and justice, and in
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`recognition of the undeniable strain the pandemic has caused most businesses, including that of
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`Plaintiff’s representative herein, rather than depriving Plaintiff of its right to appeal the DSH Part A
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`and Part C issues (issues (c), (d) and (f), above), Plaintiff respectfully prays that this Court order the
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`reinstatement of Plaintiff’s appeals for these three issues to the Board docket, permit Plaintiff to transfer
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`its appeal to the applicable CIRP Groups appealing the DSH Part A and Part C issues, when the Board
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`may thereafter close the instant appeal 13-1947.
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`WHEREUPON, Plaintiff prays as follow:
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`COUNT I - REMAND
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`34. The allegations in Paragraphs 1-33 are incorporated as if fully set forth herein.
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`35. That the PRRB acknowledges that its Rules as applied and in view of the COVID 19
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`pandemic crisis should be adopted to, rather than exempted for Plaintiff’s appeal and that a
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`dismissal of its appeal was premature;
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`36. In lieu of dismissing the appeal (which, if upheld, will cost Plaintiff thousands of dollars in
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`additional Medicare DSH reimbursement which it is overwise entitled to recovery under the
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`Medicare Act), the Board should have reinstated Plaintiff’s appeal as to its issues (c), (d) and
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`(f), above;
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`37.
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` That the Board’s decision to dismiss Plaintiff’s appeal under the instant circumstances was
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`arbitrary and capricious, and prejudices just one party in this matter, namely, Plaintiff, and
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`that;
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`38. That based upon the foregoing, this Court should order the Secretary to remand Plaintiff’s
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`appeal to the PRRB and order that Plaintiff have a reasonable amount of time not to exceed
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`sixty (60) days to transfer its appeal to the applicable CIRP Groups appealing the DSH Part A
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`and Part C issues, if any such CIRP Groups with the common ownership of Ascension Health
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`should exist; if not, to order the Secretary to remand Plaintiff’s appeal to the Board to conduct
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`and complete proceedings on the merits of Plaintiff’s appeal, Plaintiff’s issues (c), (d) and (f),
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`above, allowing Plaintiff and the MAC that same reasonable period of time to provide all
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`necessary data and documentation to the Board in preparation for hearing.
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`Case 1:22-cv-01530 Document 1 Filed 05/31/22 Page 12 of 12
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` REQUEST FOR RELIEF
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` WHEREFORE, Plaintiff respectfully requests that this Court enter an order:
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`1. Ordering the Secretary to remand Plaintiff’s appeal for its FYE 2009 for Part A and Part C
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`issues (issues (c), (d) and (f), above) in writing to the PRRB, with copy of such writing to
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`legal counsel for Plaintiff, instructing the PRRB (1) to assert jurisdiction over and reinstate
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`the appeal of Plaintiff, and (2) to issue a letter to Plaintiff and its intermediary no later than
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`thirty days following the date of remand to the PRRB, with copy to legal counsel for
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`Plaintiff, notifying them that the PRRB has asserted jurisdiction over and reinstated the
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`appeal, and scheduling proceedings on the merits;
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`2. Ordering the Secretary, upon remand to the PRRB to grant both Plaintiff and the MAC sixty
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`(60) days to submit any and all additional data and documentation to support their positions
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`at hearing;
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`3. That this Court shall retain jurisdiction over this case for purposes of enforcement of the
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`Secretary’s compliance with this Court’s order;
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`4. That the Court award Plaintiff legal fees and costs; and,
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`5. That the Court award Plaintiff any and all such further relief as the Court may deem just
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`and proper under the circumstances.
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`Dated: May 31, 2022
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` Respectfully submitted,
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` Alan J. Sedley
` ALAN J. SEDLEY, APLC (Bar No. OH0017)
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`18880 Douglas, Suite 417
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`Irvine, CA 92612
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`(818) 601-0098
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`Attorneys for Plaintiff
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`12
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