See Paragon, F. Here, Providence's attempt to cast 42 C. One could, and the Secretary does, argue that the provision of services is impossible without bed rights, and because Summitview provided similar services when it owned the bed rights, Summitview previously owned the essential characteristic of providership that Providence now possesses. One could also argue that Providence is a different facility than Summitview, that numerous elements in addition to bed rights are necessary to provide skilled nursing services, and that Providence's essential providership was never previously owned by Summitview because none of these additional elements of Providence's SNF was previously owned by Summitview.
Neither interpretation is plainly foreclosed by the regulation. Because "the regulation is not drawn in blacks and whites but leaves significant gray areas unresolved, it is ambiguous. Because the language of 42 C. See Thomas Jefferson, U. The Secretary chose to narrow its determination of Providence's previous ownership to the question of whether the bed rights were previously owned by another SNF or the equivalent of an SNF.
This focus on bed rights derives from the Secretary's position that a provider may merely be a collection of segregable assets used to render a specific type of care within an institution. We hold that it was not unreasonable for the Secretary to focus on bed rights, as bed rights are an essential characteristic of providership.
But "the Secretary, through HCFA, historically has defined change of ownership differently in different contexts, and we see no reason why the Secretary, in the exercise of his broad authority to interpret regulations that he himself has promulgated, cannot choose to apply section Second, Providence argues that because Summitview is still in existence, Summitview's licensure was not affected.
The sale affected Summitview's licensure because it reduced the number of Summitview's licensed beds. First, the PRM provides interpretative advice; it does not constitute legally binding authority. Phoenix Baptist Hosp. Heckler, F. Ass'n of Am. Shalala, 23 F. Sullivan, F. Any possible "retroactive effect was completely subsumed in the permissible retroactivity of the agency adjudication.
The PRRB's decision to deny Providence new provider status is also reasonable in light of the policy concerns that drive the exemption of 42 C. The Secretary's narrow construction of the exemption is supported both by Washington's de facto moratorium on new nursing facility beds, and the policy of preventing initial underutilization that undergirds 42 C. Washington, along with other states, has decided to impose what amounts to a de facto moratorium on nursing beds.
These limits reduce the number of new facilities, and ultimately reduce competition. In these moratorium states the Secretary has reasonably decided that no additional benefit is gained in the overall delivery of health care services when beds are merely shifted from one provider to another.
Because providers in moratorium states will tend to suffer less from the effects of competition and any initial underutilization, the Secretary has reasonably determined that they have less of a need for the exemption.
See South Shore, F. Providence argues that even if 42 C. Relying largely on Ashtabula, Providence confines its argument to rebutting the Secretary's policy rationales for its interpretation. As the South Shore court held, however, Ashtabula "erects the wrong decisional framework.
The burden is not on the Secretary to prove that his interpretation is reasonable. Rather, the burden falls on Providence to show that the Secretary's reliance on the proffered policy concerns and rationales is unreasonable. Providence has not met this burden, and the district court erred in following Ashtabula and dismissing the Secretary's policy arguments. In his discretion, the Secretary has chosen to interpret the terms "provider" and "previous ownership" broadly in order to narrow the application of the exemption.
We hold that the Secretary's decision reasonably conforms to the wording and purpose of this regulation. Providence asserts that even if the Secretary's interpretation is correct, it is entitled to new provider status because the transferred beds were not Medicare-certified. Summitview was Medicaid-certified from to , and has been dually Medicaid and Medicare-certified since Medicare and Medicaid nursing facilities provide a similar range of basic services.
South Shore, F. Further, the PRRB also made a factual determination that Summitview had indeed rendered skilled nursing services at its facilities during the three-year look-back period prior to the sale of the bed rights, thereby precluding an application of the exemption under 42 C. Providence did not challenge this factual determination on appeal.
We therefore uphold the PRRB's equivalency determination. Providence sought Medicare reimbursement for the cost-reporting years For cost-reporting years beginning on or after July 1, , SNFs are no longer reimbursed on a reasonable cost basis and, instead, are reimbursed under a "prospective payment" system See 42 U.
G Thompson. G Thompson F. Argued and Submitted October 8, — Seattle, Washington. Filed December 17, Robert D. McCallum, Jr. James A. Schweiker, F. Hence, it is the Hospital that must show that the Secretary unreasonably relied on the oligopoly effect theory. The Hospital has not done so and, indeed, there is evidence in the record suggesting that the TCC did in fact enjoy a relatively high level of patient utilization from the start.
As to the charge of non-uniformity, it suffices to say that discretion, such as that specifically conferred upon the Secretary to establish limits on routine care costs, almost invariably involves line-drawing and, thus, inevitably entails some level of variation. See Sprandel v. Sec'y of HHS, F. We need find only that, from some plausible standpoint, the Secretary had an organizing primum mobile sufficient to justify his actions. The Secretary's proffered oligopoly effect theory passes this test.
The Hospital's rejoinder is that the Secretary's interpretation of section Even if true, this lament does not call the Secretary's judgment into serious question. The goal of regulation is not to provide exact uniformity of treatment, but, rather, to provide uniformity of rules so that those similarly situated will be treated alike.
In addition, as the Seventh Circuit suggested, the Secretary reasonably may have concluded that, in states that have imposed moratoria because they no longer need additional nursing beds, subsidizing the start-up costs of new SNFs is unnecessary for the efficient delivery of health-care services. To sum up, we find no plausible reason to discredit the Secretary's rationale that, when one facility purchases another's DON rights in a moratorium state, lessened competition will enhance initial utilization and, thus, will help defray costs in the transferee facility's early years.
On that rationale, it makes sense, for purposes of construing the new provider exemption, to attribute the operations of the seller to the acquirer of the DON rights.
After all, "[w]hen Congress entrusts an agency with the responsibility for drawing lines, and the agency exercises that authority in a reasonable way, neither the fact that there are other possible places at which the line could be drawn nor the fact that the administrative scheme might occasionally operate unfairly from a particular participant's perspective is sufficient, standing alone, to undermine the scheme's legality.
DPW, F. We therefore follow Paragon and uphold the Secretary's interpretation of the disputed regulation as against the Hospital's "reasonableness" challenge. The Hospital has a fallback position: even if the Secretary's interpretation of the new provider exemption is not arbitrary and capricious, its thesis runs, his interpretation flouts prior practice. The theoretical foundation on which this position rests is sound: if, over time, an agency interprets a regulation erratically, that inconsistency may warrant a court in declining to defer to the agency in a particular situation.
See Good Samaritan Hosp. Cardoza-Fonseca, U. In this case, however, the Hospital's thesis fails. Once proffered, agency interpretations are not chiseled in stone. As we have pointed out, "[e]xperience is often the best teacher, and agencies retain a substantial measure of freedom to refine, reformulate, and even reverse their precedents in the light of new insights and changed circumstances.
INS, 27 F. This does not mean that an agency may change positions with the same ease that an actor changes costumes. For example, an agency may not, without rhyme or reason, create conflicting lines of precedent governing materially identical situations.
Shaw's Supermarkets, Inc. NLRB, F. But an agency may learn from its mistakes and decide to discard one interpretation in favor of another, as long as it thereafter consistently applies the new interpretation. See, e. Sullivan, U. Ass'n v. State Farm Mut. The Hospital complains that the Secretary has only sporadically denied new provider exemptions to facilities that have acquired DON rights from other providers.
To support this plaint, the Hospital cites a single incident, involving a facility known as Meridian-Spa Creek, in which HCFA granted a new provider exemption despite the facility's use of transferred CON rights. This citation is unpersuasive.
It is incumbent on a party complaining of inconsistency in administrative action "to bring before the reviewing court sufficient particulars of how the appellant was situated, how the allegedly favored party was situated, and how such similarities as may exist dictate similar treatment and how such dissimilarities as may exist are irrelevant or outweighed. City, Inc. While the Hospital speculates that the unexplained grant of an exemption to Meridian-Spa Creek betrays a pervasive inconsistency in HCFA decisions, it has not supported this conjecture with proof.
Nor has the Hospital shown that its circumstances bear a substantial similarity to those of Meridian-Spa Creek in all or nearly all relevant aspects.
Hence, we cannot say that the Meridian-Spa Creek scenario demonstrates administrative inconsistency. That ends this aspect of the matter. Because the Hospital has failed to show that the Secretary's interpretation of the new provider exemption constitutes a reversal of position, its argument fails.
Although patently inconsistent applications of agency standards to similar situations are by definition arbitrary, the law does not demand perfect consistency in administrative decision-making. See Ill. Bell Tel. FCC, F. Along somewhat the same lines, the Hospital urges what amounts to an ex post facto theory. Thus, the Hospital asserts, the Secretary should not be able to change the rules by applying the new guideline retroactively.
This argument is unavailing. The Manual is merely an interpretive guide, and interpretive guides generally do not have the force of law. United Parcel Serv. In any event, the Board's decision in S. Last — but far from least — even though the Manual did not specifically incorporate change of ownership into the definition of new provider until , there is ample evidence that HCFA did apply the more limited concept of change of ownership involving DON rights to new provider determinations prior to the time when the Hospital initially requested the exemption.
See Appellee's Br. Shalala, No. Previous ownership aside, an applicant is not disqualified from access to the new provider exemption unless it "has operated as the [same] type of provider or the equivalent " for the prescribed period. In a last-ditch effort to ward off disqualification, the Hospital asks us to rule that the Board erred in finding that Prospect Hill had operated as the equivalent of an SNF and, thus, as an equivalent of the TCC.
The district court did not reach this issue, and the Secretary requests us to remand it to the lower court for specific findings. The Hospital, however, urges us to decide it. Although we sometimes decline to pass upon issues not first vetted by the district court, e. Reg'l Council of Carpenters v. Kinton, F. Where, as here, we are called upon to view a static administrative record through the same prism as the lower court, deciding the case fully is often the option of choice.
Laborers' Health Care Fund v. Gibbons, F. This is a paradigmatic case for the application of such a principle: the facts are straightforward and fully developed, and the parties have had notice of, and ample opportunity to respond to, the merits of the unaddressed issue. We turn, then, to the Board's equivalency finding. The Hospital's argument on this point amounts to an attack upon the sufficiency of the evidence. This is an uphill climb, for courts ordinarily do not afford plenary review to administrative fact-finding.
So it is here: our review is limited to whether the equivalency finding is supported by substantial evidence in the administrative record. See 5 U. So long as the Board reasonably could have credited those witnesses and reports supporting its finding that Prospect Hill had operated as the equivalent of an SNF, we must sustain its equivalency finding.
See Mass. Sec'y of Transp. It is immaterial how we, if sitting as a court of first instance, would have resolved the disputed questions of fact. Generally speaking, substantial evidence comprises proof that a reasonable mind might find adequate, in light of the record as a whole, to support a particular conclusion. NLRB v. Beverly Enters. Such proof suffices even if the evidence also might support some other, inconsistent conclusion.
Posadas de P. So viewed, "substantial evidence" is an objective standard that gives the agency the benefit of the doubt as to disputed facts. See Beverly Enters. This sets the bar fairly low. In its original denial of the Hospital's application for an exemption, HCFA found that Prospect Hill had satisfied the definition of an SNF because it had furnished skilled nursing care and related services for qualified persons as set forth in 42 C.
HCFA based this finding in part on services that Prospect Hill provided only sporadically as documented in that facility's periodic activity reports as well as on the testimony of various witnesses presented at the Board's hearing. The Hospital argues that the record contains conflicting evidence and that the witnesses favorable to the Hospital outnumbered those favorable to the Secretary.
These observations are true as far as they go — but neither goes very far. Within wide limits, the weight and credibility of the evidence are for the Board to determine. See Am. Textile Mfrs. Donovan, U. Here, the Board's finding is supported by substantial evidence in the record. No more is eligible. Taking a slightly different tack, the Hospital seizes on an undisputed fact: that Prospect Hill typically furnished custodial services, performing more sophisticated services only rarely.
Extrapolating from this fact, it contends that Prospect Hill could not have operated as the equivalent of an SNF which offers sophisticated nursing care as a staple. This strikes us as an oversimplification. To be sure, Prospect Hill, in its heyday, was a Medicaid-certified Level III nursing home that provided custodial care primarily to psychiatric patients — but it also periodically delivered skilled nursing, restorative care, and other therapeutic services.
The TCC has a different orientation: it is a Level II nursing home providing mostly rehabilitative care and, occasionally, custodial care to a wide variety of patients. First, the Hospital asserts that because the new provider exemption makes no explicit allowance for facilities as disparate as Prospect Hill and the TCC, such facilities necessarily must lie outside the ambit of the equivalency rubric.
Third, the Hospital posits that, given the underlying policy of the new provider exemption, Prospect Hill's sporadic deployment of skilled nursing services simply does not justify a finding of equivalency. All three of these arguments miss the essential point. The Secretary, in his discretion, reasonably could have looked not at the particular level of care provided by a nursing facility, but, rather, at a broader definition of equivalency.
Although our review is geared to whether the Secretary's decision rests on substantial evidence, we must in the process defer to what the Secretary reasonably found to be relevant.
To do otherwise would fetter the Secretary's discretion in an unwarranted manner. See Villa View Cmty. Heckler, F. The Board accepted this premise — and reasonably so. In the process, it cited specifically to the nursing home reform provisions of the Omnibus Budget Reconciliation Act of governing the certification of long-term care facilities under Medicare and Medicaid.
These provisions indicate that both Medicare SNFs and Medicaid nursing facilities provide the same basic range of services. Thus, Prospect Hill, as a Medicaid facility, "would have already incurred the start-up costs associated with the development of the capacity to furnish inpatient SNF services, by meeting the requirements for participation. This is a convincing argument. Faced with it, we decline to substitute our judgment for the Secretary's as to whether so broad-gauged a comparison contradicts the underlying purpose of either the challenged regulation or the enabling statute.
In the last analysis, Medicare is a complex and highly technical regulatory scheme, and courts should be hesitant to second-guess the Secretary in such matters. Hosp'n Serv.
We therefore uphold the Board's finding of equivalency. We need go no further. Generic perceptions of reality are not the gold standard when administrative discretion is in play. Where Congress has chosen to cede substantial discretion to an agency, a reviewing court should scrutinize the administrative record with due regard for that discretion and weigh the reasonableness of the Secretary's action accordingly.
That respectful approach is especially appropriate when the challenged action — here, the interpretation of the new provider exemption—plainly calls for a delicate balancing of a melange of factors within the scope of the Secretary's expertise.
Hewing to these precepts, we affirm the Board's denial of the Hospital's application for a new provider exemption, reverse the district court's contrary decision, and direct the entry of judgment in favor of the Secretary. Although the new provider exemption lately has migrated, after certain amendments not relevant here, to 42 C.
Routine service costs include those costs, such as room and board, basic medical supplies, ordinary dietary and nursing services, and other quotidian expenses, for which an institution typically would assess a single per diem service charge.
What Massachusetts calls determination of need rights are known elsewhere as certificate of need CON rights See, e. We use the two terms interchangeably. After this opinion had gone to the printers, a divided panel of the Fourth Circuit issued a contrary decision on a case very similar to this one Md.
We have given that opinion careful consideration but find it unpersuasive. To cite one example, HCFA has regarded a transfer of corporate stock as a change of ownership for some purposes but not for others See Las Encinas Hosp. To cite another, HCFA defines changes of ownership for Medicare certification purposes differently than for Medicare payment purposes.
See N. Physical Therapy Serv. The Hospital and the Secretary have called to our attention through successive post-argument letters, see Fed. SNF v. In these matters, the Board, relying in large part on the district court's opinion in this case, rejected the Secretary's interpretation of the new provider exemption.
See Mercy Med. We presume that the Secretary will reverse the other three Board decisions in due course. Consequently, we cede deference to the Secretary's determination, not the Board's, as the definitive statement of the agency's position.
See 42 U. Shalala, F. In all events, the Meridian-Spa Creek determination may be no more than a waif in the wilderness. Thus, the determination may well be explained as the decision of a lower-level agency employee that cannot bind either the Board or the Secretary See Irving v.
0コメント