UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA _____________________________________ ) MERCY GENERAL HOSPITAL, et al., ) ) Plaintiffs, ) ) v. ) Civil Action No. 16-99 (RBW) ) ALEX M. AZAR II, in his official capacity ) as Secretary of the United States ) Department of Health and Human Services, ) ) Defendant. ) _____________________________________ ) MEMORANDUM OPINION The plaintiffs, eighty-one acute care hospitals located in California, seek judicial review of the final decision of the defendant, the Secretary of the United States Department of Health and Human Services (“HHS”), denying their claims for reimbursement of deductible and coinsurance payments that were not paid to the hospitals by Medicare beneficiaries. See Complaint (“Compl.”) ¶¶ 1–2. The parties filed cross-motions for summary judgment, see Plaintiffs’ Motion for Summary Judgment; Defendant’s Cross-Motion for Summary Judgment and Opposition to Plaintiffs’ Motion for Summary Judgment, and United States Magistrate Judge Deborah A. Robinson issued a Report and Recommendation (the “Report” or “R&R”) recommending that the Court affirm the Secretary’s decision, deny the plaintiffs’ motion, and grant the Secretary’s cross-motion, see R&R at 30. Currently before the Court are the plaintiffs’ Objections to the Magistrate Judge’s Report and Recommendation (“Pls.’ Objs.”). Upon consideration of the parties’ submissions, the parties’ arguments presented at the motions hearing on February 2, 2018, and the administrative record in this case, 1 the Court concludes that it must grant in part and deny in part the plaintiffs’ motion for summary judgment, deny the Secretary’s cross-motion for summary judgment, and remand this case to the Secretary for further proceedings consistent with this opinion. I. BACKGROUND A. Statutory and Regulatory Framework 1. The Medicare Program The Medicare program, established in 1965 as Title XVIII of the Social Security Act, 42 U.S.C. §§ 1395–1395lll (2012) (the “Medicare Act”), “is a federally funded medical insurance program for the elderly and disabled,” Fischer v. United States, 529 U.S. 667, 671 (2000) (internal citation omitted). Relevant here, Part A of the Medicare Act provides insurance coverage to eligible beneficiaries for the cost of inpatient hospital care, home health care, and hospice services, see 42 U.S.C. § 1395c, and Part B provides supplemental coverage for outpatient hospital care and other types of care not covered by Part A, see id. § 1395k. “Although the costs incurred for most of the care provided to Medicare patients are borne by the government, individual Medicare patients are ‘often responsible for both deductible and coinsurance payments for hospital care.’” Cmty. Health Sys., Inc. v. Burwell, 113 F. Supp. 3d 1 In addition to the filings already identified, the Court considered the following submissions in rendering its decision: (1) the Defendant’s Response to Plaintiffs’ Objections to the Magistrate Judge’s Report and Recommendation (“Def.’s Objs. Resp.”); (2) the plaintiffs’ Reply in Support of Objections to the Magistrate Judge’s Proposed Findings and Recommendations (“Pls.’ Objs. Reply”); (3) the Plaintiffs’ Memorandum of Points and Authorities in Support of Motion for Summary Judgment (“Pls.’ Summ. J. Mem.”); (4) the Defendant’s Memorandum of Points and Authorities ...
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