The opinion of the court was delivered by: Amon, United States District Judge
Plaintiff Lutheran Medical Center has filed suit against the Secretary of Health and Human Services and Empire Blue Cross Blue Shield (collectively "defendants"). In a first cause of action, Lutheran asserts that the defendants' denial of Lutheran's appeal of a reimbursement decision was arbitrary and capricious. In a second cause of action, Lutheran seeks mandamus relief pursuant to 28 U.S.C. § 1361. The parties filed cross-motions for judgment on the pleadings, or in the alternative summary judgment, on the first cause of action. In addition, defendants moved to dismiss the second cause of action for lack of jurisdiction. For the reasons stated below, the Court grants defendants' motion for judgment on the pleadings, or in the alternative for summary judgment, with respect to the first cause of action and grants defendants' motion to dismiss with respect the second cause of action.
Medicare is a federally-funded health insurance program for elderly and disabled persons. Medicare Part A is administered by the Center for Medicare and Medicaid Services ("CMS"), a division of the Department of Health and Human Services ("HHS"). CMS does not directly process Medicare claims, but rather contracts with entities known as "fiscal intermediaries," who are responsible for determining the amount of reimbursement to which providers are entitled. Defendant Empire Blue Cross Blue Shield ("Empire") is such an entity.
In order to be reimbursed, a provider of services must submit a cost report to the intermediary, who reviews and audits the report. 42 C.F.R. § 413.20. In a Notice of Program Reimbursement ("NPR"), the intermediary informs the provider of the costs that the intermediary has determined to be reimbursable. 42 C.F.R. § 405.1803.
If the provider disagrees with the determination, and the total amount in controversy is at least $10,000, the provider can request a hearing before the Provider Reimbursement Review Board ("PRRB" or "Board"), an adjudicatory body within HHS with jurisdiction to hear appeals from final decisions of fiscal intermediaries. 42 U.S.C. § 1395oo. Such requests must be filed within 180 days after notice of the intermediary's final determination. Id. The decision of the PRRB is final unless, within 60 days after the provider has been notified of the Board's decision, the Secretary reverses, affirms, or modifies that decision. However, providers may seek judicial review of any final decision by the Board, or any action by the Secretary, by filing a civil action in district court within 60 days of receipt of notice of the Board's final decision or the Secretary's action on the Board's decision. 42 U.S.C. § 1395oo(f)(1). In addition, the Administrator of CMS may, at his own discretion, review any final decision of the Board. 42 C.F.R. § 405.1875(a). A provider may request such review by the Administrator, but must do so within 15 days of the receipt of the Board decision. Id. at § 405.1875(b). Finally, notwithstanding any right of appeal to the PRRB, a provider may request that an intermediary reopen a reimbursement decision. See 42 C.F.R. § 405.1885 (2002).*fn1 Under paragraph (a), a determination "may" be reopened "with respect to findings on matters at issue in such determination" when the provider files a motion to reopen within three years of the determination. 42 C.F.R. § 405.1885(a). Under paragraph (b), the reimbursement determination "must be reopened and revised by the intermediary, if within the 3-year period specified . . . [CMS] provides notice to the intermediary that the intermediary determination . . . is inconsistent with the applicable law . . . " and CMS "explicitly directs the intermediary to reopen and revise" the determination. 42 C.F.R. § 405.1885(b).
Lutheran Medical Center ("Lutheran") is a hospital that provides services to persons covered under Medicare Part A. As a hospital that is considered a "disproportionate share hospital" under the Medicare Act, it receives additional Medicare reimbursement commonly referred to as a "DSH adjustment." In 1997, the Health Care Financing Administration ("HCFA") issued HCFA Ruling 97-2, which directed intermediaries to calculate DSH adjustments by considering all Medicare "eligible" patient days regardless of whether the Medicare Program actually paid for those days.
On June 21, 2001, Empire, acting as a fiscal intermediary, issued an NPR determining the amount of Lutheran's Medicare reimbursement for the 1998 fiscal year ("FY 1998"). Lutheran appealed Empire's determination on December 17, 2001, by timely filing a request for a hearing with the PRRB. (Pl. Rule 56.1 Statement at ¶ 2.) On January 24, 2002, Lutheran received a notice from the PRRB which acknowledged the PRRB's receipt of Lutheran's hearing request and established deadlines for Lutheran's administrative appeal. In particular, the letter advised Lutheran that the final position paper was to be filed no later than September 1, 2002, and warned Lutheran that failure to meet any of the due dates would result in dismissal of its appeal. The letter also advised that except for a Notice of Board Hearing, which would inform Lutheran of the hearing date, the PRRB would not remind Lutheran of any impending due dates. (Id. at ¶ 4-6.) Lutheran failed to file its position paper by September 1, 2002. (Id. at ¶ 8.) Therefore, on September 24, 2002, the PRRB dismissed Lutheran's appeal. (Id. at ¶ 9.)
On October 23, 2002, the law firm of Garfunkel, Wild & Travis ("Garfunkel") wrote to the PRRB on behalf of its client Lutheran, requesting that the PRRB reopen Lutheran's appeal of the 1998 NPR on the ground that Lutheran's failure to timely file its position paper was due to "excusable inadvertence." (Pl. Motion for Judgment on the Pleadings at 4.) According to Lutheran, it had retained Garfunkel in May 2002 to act as Lutheran's authorized representative for all matters before the PRRB. (Id. at 2.) On May 14, 2002, Garfunkel sent a letter to the PRRB announcing that status and requesting that all future correspondence regarding Lutheran's appeals to the PRRB be directed to Garfunkel. (Id. at 3.) The letter enumerated four appeals that were currently pending before the Board. However, the letter did not specifically mention the PRRB appeal regarding the FY 1998 NPR. (Defs. Motion for Judgment on the Pleadings at 5; Tr. at 3-4.) The letter additionally requested that the PRRB review its files and inform Garfunkel if other appeals had been filed on Lutheran's behalf and, if so, to provide copies of any relevant scheduling letters and other documents. (Pl. Motion for Judgment on the Pleadings at 3.) The PRRB did not respond to the letter. (Id. at 4.)
On November 20, 2002, Lutheran filed suit with this Court, asserting that the dismissal of its appeal by the PRRB was arbitrary and capricious. On January 10, 2003, Lutheran amended its complaint to add a second cause of action, seeking mandamus relief pursuant to 28 U.S.C. § 1361. Lutheran requested that this Court "enforc[e] the requirements of HCFA Ruling 97-2" and instruct the Secretary to direct Empire to recalculate the FY 1998 NPR. (Am. Compl. at 9.) With regard to the first cause of action, the parties filed cross-motions for judgment on the pleadings, or in the alternative, for summary judgment. With regard to the second cause of action, defendants filed a motion to dismiss for lack of subject matter jurisdiction.
Lutheran seeks review in this Court of the Board's decision to dismiss its appeal of the 1998 reimbursement decision under 42 U.S.C. § 1395oo(f)(1). Judicial review under section 1395oo(f)(1) is governed by the standards set forth in the Administrative Procedure Act ("APA"). See 42 U.S.C. § 1395oo(f)(1) (civil actions seeking such review shall be "tried pursuant to the applicable provisions under chapter 7 of title 5, United States Code notwithstanding any other provisions in [42 U.S.C. § 405]."). This Court may only review a "final decision" of the agency, and such decision may only be set aside it if it was "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." 5 U.S.C. § 706(2)(A). Thus, the Board's decision to dismiss Lutheran's appeal may be invalidated under the APA if it is "not rational and [not] based on consideration of the relevant factors." FCC v. Nat'l Citizens Comm. for Broadcasting, 436 U.S. 775, 803 (1978); see also Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983). "Although this inquiry into the facts is to be searching and careful, the ultimate standard of ...