Mission Hosp. Reg’l Med. Ctr. v. Burwell

Mission purchased the assets of South Coast and attempted by an assets-only purchase to avoid South Coast's potential liabilities under South Coast's Medicare provider agreement. These liabilities encompassed potential mandated reimbursement to Medicare for any previous overpayments made to South Coast. The Secretary determined that Mission was not entitled to bill Medicare for patient services at its new facility until that facility had a provider agreement of its own. Mission appealed the Secretary's decision. The court rejected Mission's assertion that former 42 C.F.R. 489.13(d)(1)(i) permitted it to avoid South Coast’s Medicare liabilities. The court cited to the Fifth Circuit's opinion in United States v. Vernon Home Health, Inc.: “federal law governs cases involving the rights of the United States arising under a nationwide federal program such as the Social Security Act. The authority of the United States in relation to funds disbursed and the rights acquired by it in relation to those funds are not dependent upon state law.” It is equally true that private parties have no power to alter their legal obligations with Medicare under their provider agreements. The court also rejected Mission's argument that it is entitled to the benefit of the retroactivity provision in 42 C.F.R. 489.13(d)(2). The court concluded that the Secretary's interpretations and decisions rendered by the DAB in this case were reasonable. Accordingly, the court affirmed the judgment. View "Mission Hosp. Reg'l Med. Ctr. v. Burwell" on Justia Law