for review because (1) it is dissatisfied with its intermediary's final determination as to the amount of total program reimbursement since that amount reflects the 37 instances of miscoding; (2) the amount at issue well exceeds $ 10,000; and (3) its appeal was timely (that is, was within 180 days of the date of the intermediary's denial of its request). On the force of this argument, Little Company claims that it is entitled to summary judgment.
Judge Williams considered this argument in the companion case to this one (whose facts are virtually identical to our own). Little Co. of Mary Hosp. and Health Care Ctr. v. Sullivan, No. 92-C-399. In considering the defendants' motion to dismiss in that case, Judge Williams found that Little Company had met the criteria for establishing Board jurisdiction under Section 1395oo(a). Little Co. of Mary Hosp. and Health Care Ctr. v. Sullivan, No. 92-C-399, Mem. Op. and Order (N.D. Ill. Oct. 1, 1992) (granting defendant's motion to dismiss). She found that both the jurisdictional amount and timely filing requirements had been met. Next, she determined that, contrary to defendants' assertion, mere dissatisfaction with the amount of total reimbursement is all that is required to satisfy the first requirement of Section 1395oo(a). With respect to this determination, she explained that she was following reasoning enunciated in Bethesda Hospital Association v. Bowen, 485 U.S. 399, 99 L. Ed. 2d 460, 108 S. Ct. 1255 (1988), which she read to say that a provider can be dissatisfied with the amount of its total reimbursement and thus satisfy the first requirement of Section 1395oo(a) even though it did not incorporate a challenge in the cost report filed with its intermediary. Little Co. of Mary Hosp. and Health Care Ctr. v. Sullivan, No. 92-C-399, mem. op. and order at 6 (N.D. Ill. Oct. 1, 1992) (granting defendant's motion to dismiss).
Although she found that Little Company had met the requirements of Section 1395oo(a), Judge Williams determined that remand to the Board was inappropriate because Section 412.60 deprived the Board of its jurisdiction over the matter. Id. Mem. Op. and Order at 7. She reasoned that under Section 412.60, Little Company's fiscal intermediary lacked jurisdiction to hear a petition for review of a DRG classification after the 60-day time period except where good cause was demonstrated. Id. at 8 (citing Valley Baptist Med. Ctr. v. Blue Cross & Blue Shield Ass'n, Medicare & Medicaid Guide (CCH) P 38,465 (1990)). Since Little Company had not demonstrated good cause for filing its request after the 60 days had run, Judge Williams found that the intermediary lacked jurisdiction to review its request for adjustment and, hence, the subsequent appeal was also without jurisdictional basis.
While we reach ultimately the same conclusion as Judge Williams' well-reasoned opinion, we get there by a slightly different route. While Little Company may well be dissatisfied with the total program reimbursement amount determined by its intermediary because it does not reflect the DRG adjustments Little Company believes itself entitled to, we find that Section 1395oo(a) does not require the Board to take jurisdiction over Little Company's appeal. We read Bethesda Hospital more narrowly than did Judge Williams, finding it to hold that only in select circumstances will a provider be permitted to raise challenges in the first instance on appeal under Section 1395oo.
In Bethesda Hospital, the petitioners had not requested certain reimbursements (or challenged their intermediary's calculations) before the intermediary because they knew that these costs were currently not reimbursable under the Secretary's regulations and, hence, would have been automatically disallowed by the intermediary. Believing that the Secretary's regulation precluding reimbursement for this type of cost was erroneous (that is, the regulation was invalid), the petitioners chose to reserve their challenge to the regulation for their Section 1395oo(a) appeal. When this issue was raised on appeal, the Secretary contended that the petitioners were not entitled to raise it because they had failed to exhaust their administrative remedies short of appeal.
In rejecting the Secretary's argument, the Court held that, "No statute or regulation expressly mandates that a challenge to the validity of a regulation be submitted first to the fiscal intermediary." 485 U.S. at 404. It reasoned:
Providers know that, under the statutory scheme, the fiscal intermediary is confined to the mere application of the Secretary's regulations, that the intermediary is without power to award reimbursement except as the regulations provide, and that any attempt to persuade the intermediary to do otherwise would be futile.
The Court then went on to compare the circumstance of a challenge to the validity of a regulation with more routine cost determination disputes:
Thus, petitioners stand on different ground than do providers who bypass a clearly proscribed exhaustion requirement or who fail to request from the intermediary reimbursement for all costs to which they are entitled under applicable rules. While such defaults might well establish that a provider was satisfied with the amounts requested in its cost report and awarded by the fiscal intermediary, those circumstances are not presented here. We conclude that petitioners could claim dissatisfaction, within the meaning of the statute, without incorporating their challenge in the cost reports filed with their fiscal intermediaries.