PAMC, Ltd. v. Sebelius

The failure to timely submit data on a quarterly basis to the Centers for Medicare & Medicaid Services under the Reporting Hospital Quality Data for Annual Payment Update program will result in a reduction by two percentage points to the medical center who failed to submit the data.

PAMC, Ltd. dba Pacific Alliance Medical Center (“PAMC”) failed to timely report data required under the Reporting Hospital Quality Data for Annual Payment Update (“RHQDAPU”) program and therefore CMS reduced PAMC’s annual percentage increase by two percent. The district court affirmed the Secretary of the Department of Health and Human Services’s decision denying PAMC its full percentage increase. PAMC appealed the decision arguing that they (1) substantially complied and (2) that they have a right to equitable relief. PAMC’s third party vendor, Thomson Reuters was responsible for submitting PAMC’s required data and failed to do so until the next day after the deadline had passed. The Board observed, and the Ninth Circuit affirmed that Congress had given the Secretary broad authority to implement the RHQDAPU program and proper procedures were published in the Federal Register and the QualityNet Exchange website. The district court considered PAMC’s arguments and noted that (1) they had no authority to award equitable relief where the provider missed the applicable deadline through its own fault or the fault of its vendor and (2) on the issue of substantial performance, contract principles are inapplicable to the “statutory and regulatory relationship between HHS and a Medicare provider.” The panel notes, that while it does not question PAMC’s good faith efforts to comply, that does not mean that it is entitled to relief. Additionally, PAMC was provided with multiple notices of the deadline approaching and still ultimately submitted its data late. AFFIRMED.