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Kaiser Foundation Hospitals, A California Nonprofit Public v. Ddp-Pjw Kathleen Sebelius

June 15, 2011

KAISER FOUNDATION HOSPITALS, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, DBA KAISER FOUNDATION HOSPITAL-ANAHEIM, PLAINTIFF-APPELLANT,
v.
DDP-PJW KATHLEEN SEBELIUS,*FN1 SECRETARY OF THE UNITED STATES DEPARTMENT OF HEALTH AND HUMAN SERVICES, DEFENDANT-APPELLEE.



D.C. No. 2:08-cv-02129 Appeal from the United States District Court for the Central District of California Dean D. Pregerson, District Judge, Presiding

The opinion of the court was delivered by: Judge Rawlinson

FOR PUBLICATION

OPINION

Argued and Submitted November 1, 2010-Pasadena, California

Before: Alfred T. Goodwin and Johnnie B. Rawlinson, Circuit Judges, and Jack Zouhary, District Judge.*fn2

Opinion by Judge Rawlinson; Dissent by Judge Zouhary

OPINION

RAWLINSON, Circuit Judge

Kaiser Foundation Hospital-Anaheim (Kaiser), a medicare provider, appealed its notice of program reimbursement for the fiscal year ending in 2001 to the Provider Reimbursement Review Board (PRRB or Board), which dismissed the appeal because Kaiser missed its deadline to file a preliminary position paper. After the Board denied Kaiser's motion for reinstatement of its appeal, Kaiser filed this action. Kaiser now appeals the district court's order granting Sebelius's motion for summary judgment.

We have jurisdiction pursuant to 28 U.S.C. § 1291, and we affirm the district court's judgment.

I. BACKGROUND

A. Statutory and Regulatory Framework

The Medicare Act established a system of health insurance for the aged and disabled. See 42 U.S.C. § 1395 et seq.Eligible beneficiaries receive medical care from "providers," which are medical care facilities that have entered into agreements with the Secretary to furnish care, and the providers are then reimbursed by the Medicare program. Part A of the Medicare program authorizes payments for institutional care provided primarily on an inpatient basis. See 42 U.S.C. §§ 1395c-1395i-4.

Medical care facilities, such as plaintiffs, receive reimbursement under Part A or Part B (or both) from a "fiscal intermediary," . . . that functions as the Secretary's agent in making payment on covered claims. At the close of each fiscal year, a provider must submit a "cost report" to the fiscal intermediary showing the costs it has incurred, and the appropriate portion of such costs to be allocated to the Medicare program during the fiscal period covered by the cost report. 42 C.F.R. §§ 413.20, 413.24.

Irvine Med. Ctr. v. Thompson, 275 F.3d 823, 826 (9th Cir. 2002) (citations omitted).

After analyzing a provider's cost report, the fiscal intermediary is to "furnish the provider . . . a written notice reflecting the intermediary's determination of the total amount of reimbursement due to the provider." 42 C.F.R. § 405.1803(a). This notice is commonly referred to as the Notice of Provider Reimbursement (NPR). If a provider "is dissatisfied with the final determination of the . . . fiscal intermediary . . . as to the amount of total program reimbursement[,] . . ." it may obtain a hearing, before the Provider Reimbursement Review Board.

42 U.S.C. ยง 1395oo(a)(1). "The Board shall have the power to affirm, modify, or reverse a final determination of the fiscal intermediary with respect to a ...


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