Pomona Valley Hospital Med v. Xavier Becerra, No. 20-5350 (D.C. Cir. 2023)
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Hospitals receive greater payment if their Medicare patients are disproportionately low-income individuals entitled to federal supplemental security income benefits. Pomona Valley Hospital Medical Center contends that the Department of Health and Human Services undercounted the number of its Medicare patients who were entitled to SSI benefits and thus undercompensated the hospital for treating them. Pomona sought to prove the undercount through data from state benefit programs that piggyback on SSI. In an administrative proceeding, Pomona introduced expert testimony explaining how the state data derives from and overlaps with the federal SSI data. The Provider Reimbursement Review Board held that Pomona failed to prove the undercount, but the district court set aside its decision and remanded the case to the Board for further proceedings.
The DC Circuit affirmed. The court explained that using statewide statistics, Pomona estimated that fewer than 10 such patients would likely show up in its SSI-fraction calculations in any given year. And neither the Board nor the Contractor countered these estimates. Given the lack of contrary evidence in the record, such discrepancies appear immaterial and suggest no substantial flaw in Pomona’s methodology. Further, the court explained that Pomona provided uncontroverted evidence that two potential difficulties with its approach amounted to little more than rounding errors. It proffered creditable testimony from two experts indicating that the only explanation for the discrepancy was some error in CMS’s collection or matching of data. By contrast, the Contractor remained silent. Given the strength of the hospital’s showing, and the absence of any countervailing evidence, the Board’s conclusion that Pomona had failed to prove an undercount was unreasonable
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