Jackson Walker obtained a significant victory in a Medicare reimbursement appeal on June 29, 2018, in the D.C. Circuit Court of Appeals, in favor of our reimbursement consultant client and over 270 client hospitals that are part of four national hospital systems. Notably, the D.C. Circuit panel hearing and deciding the case consisted of former U.S. Supreme Court nominee Merrick Garland, newly appointed Judge Gregory Katsas on his first day hearing cases for the D.C. Circuit, and current Supreme Court nominee Brett Kavanaugh.
The hospitals had filed more than sixty administrative appeals seeking additional Medicare reimbursement over the course of two decades. In 2013, while the appeals were pending, a new regulation imposing time limits and restrictions on certain reimbursement challenges resulted in the dismissal of all of the hospitals’ appeals. The hospitals sought judicial review in the U.S. District Court for the District of Columbia, but the district court agreed that the new regulation barred the appeals and granted summary judgment to the agency.
On appeal to the D.C. Circuit, Jackson Walker partner Jed Morrison argued for the hospitals that the new regulation by its own terms did not apply to the particular type of Medicare reimbursement appeals they had brought, and that even if it did, it was arbitrary and capricious and impermissibly retroactive. On June 29, the D.C. Circuit issued a unanimous opinion agreeing that the new regulation does not apply to the hospitals’ appeals. In addition, Judge Kavanaugh agreed with our arguments for the plaintiffs that the agency’s actions in promulgating the new regulation were arbitrary and capricious, and he wrote a concurring opinion in favor of the plaintiffs stating that “…it would seem to be the very definition of arbitrary and capricious for HHS to knowingly use false facts when calculating hospital reimbursements.”
As a result of this opinion, the matter will be remanded for the hospitals to proceed with their claims for additional reimbursement, which could range in the hundreds of millions of dollars.
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