LANDYA McCAFFERTY, District Judge.
Several New Hampshire hospitals
On April 3, 2017, plaintiffs filed an "expedited motion to alter or amend judgment" (doc. no. 53). Defendants object (doc. no. 55).
A detailed background of this case is provided in the court's order on plaintiffs' motion for a preliminary injunction, see doc. no. 31, and its order on the parties' cross motions for summary judgment, see doc. no. 51. The court provides only a brief background of the case here.
In addition to providing financial support to states that implement the Medicaid program, the Medicaid Act provides for additional payments to be made to "hospitals which serve a disproportionate number of low-income patients with special needs." 42 U.S.C. § 1396a(a)(13)(A)(iv). Such increased payments are available to any hospital that treats a disproportionate share of Medicaid patients (a "disproportionate-share hospital" or "DSH"). § 1396r-4(b).
In 2003, to monitor DSH payments, Congress enacted into law a requirement that each state provide to the Secretary an annual report and audit on its DSH program.
§ 447.299(c)(16). This section establishes a formula for a state to determine whether the hospital-specific DSH limit, as set forth in § 1396r-4(g)(1)(A), was calculated correctly.
On January 10, 2010, CMS posted answers on its website to "frequently asked questions" regarding the audit and reporting requirements of the 2008 Rule. Two of the frequently asked questions, FAQ 33 and FAQ 34, and CMS's responses to those questions are at issue in this case.
On November 11, 2015, after unsuccessfully petitioning CMS to repeal FAQs 33 and 34, plaintiffs instituted this action, alleging that defendants violated the APA by promulgating and enforcing FAQs 33 and 34. On March 11, 2016, the court granted plaintiffs' motion for a preliminary injunction, which enjoined defendants from enforcing or applying FAQs 33 and 34 during the pendency of this case.
The parties cross-moved for summary judgment on Counts I through III of the complaint. Only Counts I and II are relevant to plaintiffs' motion to alter or amend judgment.
Count I of the complaint alleged that in promulgating and enforcing FAQs 33 and 34, defendants acted in excess of their statutory authority under the Medicaid Act. Count II alleged that FAQs 33 and 34 substantively alter the obligations imposed by a section of the 2008 Rule, 42 C.F.R. § 447.299(c)(16), and that, as substantive rules, the FAQs had to be, but were not, promulgated using notice-and-comment rulemaking under the APA.
On March 2, 2017, the court granted summary judgment to plaintiffs on Counts I and II.
With regard to Count II, the court held that FAQs 33 and 34 were substantive rules because they changed the calculation provided in § 447.299(c)(16) of the 2008 Rule. Therefore, they should have been, but were not, promulgated through notice-andcomment rulemaking.
The court therefore ordered: "Defendants are permanently enjoined from enforcing FAQs 33 and 34. Defendants shall follow the policies and procedures in effect before defendants issued FAQs 33 and 34, until and unless those policies and procedures are replaced by an enforceable and properly promulgated regulation." Doc. no. 51 at 47. On March 6, 2017, the court entered judgment in accordance with that order.
On April 3, 2017, defendants published a final rule amending the 2008 Rule, 42 C.F.R. § 447.299, to include within the regulation's text the policies referenced in FAQs 33 and 34 (the "2017 Rule").
Plaintiffs move to alter or amend the court's judgment to enjoin defendants from enforcing the 2017 Rule and the policies reflected therein. Defendants object.
Amendment or alteration of a judgment is "`an extraordinary remedy which should be used sparingly.'"
In their motion, "plaintiffs request that this Court amend or alter its March 2, 2017 order to decide whether the policies contained in the FAQs, which are now reflected in the new final rule, are inconsistent with 42 U.S.C. § 1396r-4(g)(1)(A) and must be vacated and permanently enjoined under the APA." Doc. no. 53 at ¶ 26. In addition, "plaintiffs further request that this Court amend its March 2, 2017 order to make clear that the policies contained in FAQs 33 & 34, which are now reflected in the final rule, constitute substantive rules and do not constitute interpretations or clarifications of existing law."
Plaintiffs assert that the court should amend or alter its March 2 order because the 2017 Rule represents an intervening change in law. That assertion is incorrect. The controlling law governing the court's analysis of the challenged agency action in this case has not changed since the court issued its March 2 order. The 2017 Rule does not represent a change in the governing law. Rather, it is a new agency action that is distinct from the one challenged in plaintiffs' complaint in this case.
Plaintiffs also contend that manifest injustice will result if the court does not alter or amend the March 2 order to address the 2017 Rule. Plaintiffs offer no support, however, for their contention that the court can amend its summary judgment order to address an agency action—here, the 2017 Rule— that was not challenged in the case and indeed, occurred after the court entered judgment. Nothing prevents plaintiffs from challenging the 2017 Rule in an appropriate manner, through a new action.
In short, a motion to alter or amend judgment is not the appropriate vehicle to challenge the 2017 Rule or the policies contained therein. Plaintiffs' complaint in this action challenged the policies in FAQs 33 and 34, and alleged that defendants' implementation and enforcement of those policies violated the APA. The allegations in the complaint necessarily required the court to analyze defendants' policies through the prism in which they were promulgated: the FAQs. The court's analysis in the March 2 order was limited to defendants' authority to implement and enforce the policies based on the manner and process in which defendants' adopted them.
For the foregoing reasons, plaintiffs' expedited motion to alter or amend judgment (doc. no. 53) is denied. NHDHHS's motion for permission to file an amicus curiae memorandum (doc. no. 54) is denied as moot.