Grossmont Hosp. Corp. v. Burwell, No. 12-5411 (D.C. Cir. 2015)
Annotate this CaseGrossmont and four other California hospitals sought reimbursement under the Medicare program for so-called “bad claims.” Payment was denied because the claims were submitted to Medicare without first being submitted to the State of California for a determination of any payment responsibility it may have for the claims. The court concluded that Grossmont has failed to preserve its challenge that the mandatory state determination policy violates the bad debt moratorium; Grossmont also failed to preserve its claim that the Secretary’s effort to limit the alternative documentation policy must be rejected because it is a change in policy that must be adopted in a notice and comment rule; and, as applied in this case, the Secretary’s state determination requirement was not arbitrary or capricious. The court need not decide whether the Secretary acts arbitrarily and capriciously if she refuses to allow claims as bad debt if a recalcitrant state refuses to issue state determinations of payment responsibility despite reasonably diligent efforts to obtain them. Finally, the Secretary's conclusion that the hold harmless provision, in Joint Signature Memorandum 370 (JSM 370), does not apply is supported by substantial evidence and is not arbitrary or capricious. Accordingly, the court affirmed the judgment.
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