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Monmouth Medical Center v. Thompson

Decision that court lacked subject matter jurisdiction over plaintiffs' action reversed; plaintiffs sought review of payment determination made by Secretary of Health and Human Services, and all other avenues of relief were either foreclosed or futile.

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Argued March 23, 2001

Plaintiff-appellants Monmouth Medical Center and Staten Island University Hospital are acute-care facilities that receive payments under Medicare Part A for services to Medicare beneficiaries. Since 1983, the Secretary of Health and Human Services has made payments to cover hospital operating costs for inpatient care under the Prospective Payment System (“PPS”), which reimburses according to a uniform national rate schedule. See 42 U.S.C. s 1395ww(d). The two hospitals, because they serve a disproportionate share of low-income Medicare recipients, are eligible for “disproportionate share hospital” (“DSH”) adjustments to their PPS payments. See 42 U.S.C. s 1395ww(d)(5)(F). Monmouth and Staten Island sought the aid of the district court in an attempt to have their fiscal year (“FY”) 1993 and FY 1994 DSH payments recalculated, asserting jurisdiction under 42 U.S.C. s 1395oo(a)(1)(a), 28 U.S.C. s 1331, and 28 U.S.C. s 1361. The district court decided that the hospitals failed to follow the statutorily mandated procedure for appealing their payments, that 42 U.S.C. s 1395ii precluded other review, and that, accordingly, it lacked subject matter jurisdiction. We reverse.

The Secretary of HHS has delegated authority to administer the Medicare Act to the Health Care Financing Administration (“HCFA”).*fn1 Determinations of payment amounts are in turn often delegated to fiscal intermediaries, generally private insurers that manage the payments for the Secretary. See 42 U.S.C. s 1395h. Estimated payments are made periodically and an annual accounting is done by the intermediary in the form of a Notice of Provider Reimbursement (“NPR”) based on a cost report submitted by the provider after the close of each fiscal year.

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