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ALBERT EINSTEIN MED. CTR. v. SULLIVAN

November 23, 1992

ALBERT EINSTEIN MEDICAL CENTER, Plaintiff
v.
LOUIS W. SULLIVAN, M.D., Secretary, Department of Health and Human Services, Defendant



The opinion of the court was delivered by: BY THE COURT; ROBERT S. GAWTHROP, III

 Gawthrop, J.

 November 23, 1992

 Before me are the parties' cross-motions for summary judgment. Plaintiff, Albert Einstein Medical Center ("Einstein"), seeks an order requiring the Provider Reimbursement Review Board ("PRRB") to accept jurisdiction over its challenge to the amount of reimbursement it received for services provided to Medicare patients during the 1986 fiscal year. Defendant, the Secretary of the Department of Health and Human Services ("the Secretary"), seeks an affirmance of the PRRB's determination that it was without jurisdiction to hear the appeal, since the appeal was not timely filed.

 In the alternative, Einstein argues that this court should assert federal question jurisdiction and reach the merits of its reimbursement appeal. The Secretary asserts that the Medicare statute, 42 U.S.C. §§ 405(h) and 1395ii, bars the court from taking asserting jurisdiction.

 BACKGROUND

 Statutory and Regulatory Scheme

 Under the Medicare Program, a provider of services prepares a cost report at the end of each fiscal year. The cost report details the services rendered Medicare patients by the provider during the year, and requests reimbursement for those services. 42 C.F.R. § 405.1801(b). The cost report is submitted to the provider's "fiscal intermediary," a private entity (usually an insurance company) acting as the Secretary's agent. 42 U.S.C. § 1395h. The fiscal intermediary analyzes the cost report and issues a Notice of Program Reimbursement ("NPR"), which sets forth the total amount of reimbursement due the provider and individually lists the expenses allowed and disallowed. 42 C.F.R. § 405.1803.

 If the provider is dissatisfied with the NPR, it may request a hearing before the PRRB within 180 days of the issuance of the NPR. 42 U.S.C. § 1395oo(a). The PRRB may affirm, modify, or reverse the decisions of the intermediary. 42 U.S.C. § 1395oo(d). The Secretary, either on his own motion or at the request of the provider, may then review the matter within 60 days. 42 U.S.C. § 1395oo(f)(1). If the provider remains dissatisfied, it may seek review in the appropriate United States District Court within 60 days of the issuance of the final decision, whether that decision comes from the PRRB or the Secretary. 42 U.S.C. § 1395oo(f).

 Within three years, the NPR may be reopened on motion of the provider, the fiscal intermediary, the PRRB, or the Secretary. 42 C.F.R. § 405.1885(a). Jurisdiction for determining whether to reopen is vested exclusively in the administrative body which rendered the last decision. 42 C.F.R. § 405.1885(c). In a case such as Einstein's, where the fiscal intermediary has jurisdiction over the reopening, the provider may appeal to the PRRB only after the matter is officially reopened and a final determination on the proposed revision is made by the fiscal intermediary. 42 C.F.R. § 405.1889. Under the regulations, a revision is a "separate and distinct determination" for purposes of appeal to the PRRB. 42 C.F.R. § 405.1889.

 Facts

 The material facts of this case are not in dispute. I shall briefly outline them. On September 29, 1986, Einstein filed a cost report for its fiscal year 1986. In the cost report, Einstein "self-disallowed" certain costs which were not reimbursable according to the Secretary's Provider Reimbursement Manual. However, Einstein did list three of the self-disallowed costs as "protested amounts": (1) malpractice insurance costs, (2) labor room days, and (3) recognition of a $ 13 million loss on advance refunding of debt. Einstein noted in its cover letter that it was listing the three items in order "to preserve and protect our right of appeal and other legal rights." On September 30, 1988, Einstein's fiscal intermediary, Independence Blue Cross and Blue Shield, issued the NPR for Einstein's fiscal year 1986. The NPR disallowed Einstein's three "protested amounts," but Einstein did not appeal the fiscal intermediary's determinations to the PRRB.

 The fiscal intermediary reopened Einstein's 1986 NPR for the purpose of adjusting the amount of Einstein's malpractice insurance reimbursement, and it issued a revised NPR on July 14, 1989. The only difference between the two NPR's was that the revised NPR granted Einstein additional reimbursement for malpractice insurance.

 On January 8, 1990, Einstein appealed the revised NPR to the PRRB. However, Einstein's appeal was not based on the malpractice insurance revision; rather, Einstein appealed the loss on advance refunding of debt, which had been disallowed by the original NPR and remained unchanged by the revised NPR. The PRRB dismissed Einstein's appeal on May 31, 1991, stating that the appeal was untimely and that, therefore, the PRRB lacked jurisdiction. The PRRB relied on 42 C.F.R. § 405.1889 for the proposition that a "revision shall be considered a separate and distinct determination" for appeal purposes.

 On July 29, 1991, the Administrator of the Health Care Financing Administration affirmed the PRRB's ruling, also relying on 42 C.F.R. § 405.1889.

 Einstein filed the present action on September 30, 1991, seeking an order requiring the PRRB to accept jurisdiction over its appeal of the fiscal intermediary's ...


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