DCH Regional Medical Center v. Azar

          Argued September 24, 2018

          Appeal from the United States District Court for the District of Columbia (No. 1:16-cv-00212)

          Geoffrey M. Raux argued the cause for appellant. With him on the briefs were Lori A. Rubin and Donald H. Romano.

          Abby C. Wright, Attorney, U.S. Department of Justice, argued the cause for appellee. With her on the brief were Jessie K. Liu, U.S. Attorney, Alisa B. Klein, Attorney, Robert P. Charrow, General Counsel, U.S. Department of Health and Human Services, Janice L. Hoffman, Associate General Counsel, Susan Maxson Lyons, Deputy Associate General Counsel, and Jonathan C. Brumer, Attorney.

          Before: Millett and Katsas, Circuit Judges, and Silberman, Senior Circuit Judge.

          OPINION

          Katsas Circuit Judge.

         The Medicare statute precludes judicial review of estimates used to make certain payments to hospitals for treating low-income patients. We must decide whether this preclusion provision bars challenges to the methodology used to make the estimates.

         I

         Through Medicare, the federal government pays for health care for elderly and disabled individuals. 42 U.S.C. § 1395 et seq. Hospitals receive increased payments if they serve "a significantly disproportionate number of low-income patients." Id. § 1395ww(d)(5)(F)(i)(I). These increases are known as "DSH payments," which is shorthand for disproportionate share hospital payments. Id. § 1395ww(r).

         The payment at issue here is the "additional payment" described in paragraph (2) of section 1395ww(r), which is made annually to each disproportionate share hospital. The payment is the product of three statutory "factors" estimated by the Secretary of Health and Human Services. The third factor measures an individual hospital's share of all nationwide uncompensated care. It is the quotient of two amounts:

(i) the amount of uncompensated care for such hospital for a period selected by the Secretary (as estimated by the Secretary, based on appropriate data (including, in the case where the Secretary determines that alternative data is available which is a better proxy for the costs of [DSHs] for treating the uninsured, the use of such alternative data)); and

(ii) the aggregate amount of uncompensated care for all [DSHs] that receive a payment under this subsection for such period (as so estimated, based on such data).

42 U.S.C. § 1395ww(r)(2)(C).

         Congress precluded judicial review of the estimates of the three statutory factors. Specifically, it provided that "[t]here shall be no administrative or judicial review under section 1395ff of this title, section 1395oo of this title, or otherwise" of "[a]ny estimate of the Secretary for purposes of determining the factors described in paragraph (2)." 42 U.S.C. § 1395ww(r)(3)(A). Congress also precluded administrative and judicial ...