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Decided: March 7, 2016

The Fourth Circuit affirmed the district court’s ruling.

Appellant Cumberland County Hospital Systems, Inc., (“the Hospital System”) commenced this action to obtain a writ of mandamus compelling the Secretary of the Department of Health and Human Services to adjudicate immediately its administrative appeals on claims for Medicare reimbursement. In 2012 and 2013, the Secretary denied payment to the Hospital System on over 900 claims (amounting to $12.3 million) for reimbursement for Medicare services that she had initially authorized. The Secretary has not acknowledged receipt of some of the appeals and for others has reported a delay of over two years. Because the funds are necessary to the Hospital System’s operations, it brought this claim asserting that over 750 appeals await assignment to an Administrative Law Judge (“ALJ”) and violate congressional mandate 42 U.S.C. § 1395ff(d)(1)(A) that states the appeals must be heard and decided by an ALJ within 90 days.

Both parties agree the Secretary has over 800,000 appeals awaiting assignment to an ALJ, creating a ten-year backlog. While acknowledging the unacceptability of the backlog, the Secretary attributes it to an increased number of appeals within the Medicare system and inadequate funding by Congress to hire additional personnel. The Health System contends the backlog is mainly due to the Secretary’s mismanagement of HHS resources.

To show the Hospital System is entitled to mandamus relief, a plaintiff must show it has a “clear and indisputable right to the relief sought” and that the responding party has a “clear duty to do the specific act requested.” The Court agreed that the delay in the administrative process for Medicare reimbursement is incontrovertibly grotesque and that the Act gives the Hospital System the clear and indisputable right to the administrative process. However, the Court held that the Medicare Act does not give a clear and indisputable right to adjudication of its appeals before an ALJ within 90 days, as the Hospital System claims. Furthermore, the issuance of a judicial order directing the Secretary to hear the claims in the middle of the administrative process would unduly interfere with the process and work of the political branches. It would also invite other healthcare providers suffering similar delays to seek a mandamus order, thereby causing the judicial process to replace and distort the agency process.

Because the Court affirmed the district court’s conclusion that the Hospital system failed to state a claim upon which mandamus relief could be granted, it accordingly dismissed the Hospital System’s declaratory judgment claim that the delay of adjudication violated federal law.

Accordingly, the Court affirmed the district court’s ruling.

Full Opinion

Whitney Kamerzel