UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA BAPTIST MEDICAL CENTER et al. Plaintiffs, v. Civil Action No. 11-cv-0899 SYLVIA M. BURWELL, in her official capacity as Secretary of Health and Human Services Defendant. MEMORANDUM OPINION AND ORDER Pending before the Court are the parties’ objections to Magistrate Judge G. Michael Harvey’s Report and Recommendation (“R&R”), which recommends that the Court grant in part and deny in part plaintiffs’ motion for summary judgment, deny defendant’s motion for summary judgment, and remand the matter to the agency for further proceedings. See R&R, ECF No. 64. Upon consideration of the R&R, plaintiffs’ objections, defendant’s response to those objections, and the relevant law, the Court adopts Magistrate Judge Harvey’s R&R and GRANTS IN PART and DENIES IN PART plaintiffs’ motion for summary judgment, DENIES defendant’s motion for summary judgment, and REMANDS this matter to the agency. I. Background The Court will not restate the full factual background of this case, which is set forth in the Report and Recommendation. See R&R, ECF No. 64 at 3–8. 1 By way of general overview, this case concerns the administration of Medicare, the federal program that provides health insurance to the elderly and disabled. See 42 U.S.C. §§ 1395-1395cc; see also Northeast Hosp. Corp. v. Sebelius, 657 F.3d 1, 2 (D.C. Cir. 2011)(explaining Medicare statutory provisions). The Centers for Medicare and Medicaid Services (“CMS”) is charged with administering the Medicare program. The Medicare statute is divided into five parts; three of which are relevant to this case. see id. The first relevant part is Medicare Part A which covers medical services provided by hospitals and other institutional providers. See 42 U.S.C. § 1395c. Under Part A, providers are paid directly by the Secretary of Health and Human services for the services they provide. See id. §§ 1395f(a)-(b), 1395x(u). This payment arrangement is commonly known as the fee-for- service system. Northeast Hosp., 657 F.3d at 2 (referring to the “traditional Part A fee-for-service system.”). Over the last forty years, Congress has provided an alternative to the fee-for-service arrangement under Part A 1 When citing electronic filings throughout this opinion, the Court cites to the ECF header page number, not the original page number of the filed document. 2 through different arrangements. Medicare Part C, the second relevant part, is an alternative to the fee-for-service system that allows an individual to choose to enroll with a Health Maintenance Organization (“HMO”), preferred organization, or other private managed care plan after 1999. 2 See Balanced Budget Act of 1997 (BBA), Pub. L. No. 105-33, §4001, 111 Stat. 251, 270 (codified at 42 U.S.C. § 1395w-21). If a person chooses to enroll in Part C, the Secretary makes payments to the managed care plan, rather than directly to the provider. Id. § 1395w– 21(i)(1). From 1972 through the end of 1998, as an alternative to the traditional fee-for-service system, Medicare beneficiaries instead could enroll with a managed care organization, such as an HMO, which entered into a payment contract with ...
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