Fiscal Intermediaries determine payment amounts due the providers under Medicare law and under interpretive guidelines published by CMS. See 42 U.S.C. § 1395(h), 42 C.F.R. §§ 413.20(b) and 413.

(b) WAIVER AUTHORITY.—The Secretary may waive such requirements of titles XI and XVIII of the Social Security Act (42 U.S.C. 1301 et seq.; 42 U.S.C. 1395 et seq.) as may be necessary for the purpose of carrying out the demonstration program under this section. (c) REPORT.

See Zheng v. Gonzales, 422 F.3d 98, 119 (3d Cir. 2005). The DAB’s reading of §1861(e)(1), however, is incompatible with 42 U.S.C. § 1395. Entitled “Prohibition Against Any Federal Interference,” § 1395 states: Nothing in this title shall be construed to authorize any Federal officer or employee to exercise any control over the practice of medicine or the way in which medical services are provided . . . Section 1395 was intended to “encourage participating institutions. . . to make the best of modern medicine more readily to the aged,” not to create a bifurcated system.

IT IS HEREBY ORDERED that the Secretary’s final decision issued on November 18, 2015 is hereby set aside and reversed. IT IS HEREBY FURTHER ORDERED that this matter is remanded to the Secretary for the Secretary to review Plaintiff’s documentation and make appropriate reimbursement to Plaintiffs for the Medicare bad debts at issue herein, along with interest in accordance with 42 U.S.C. § 1395(f)(2). Dated: _________________ SO ORDERED.

2Pursuant to Fed. R. Civ. P. 25(d), Secretary Price is substituted as the defendant in his official capacity. Case 1:14-cv-00263-RDM Document 89-1 Filed 06/30/17 Page 7 of 31 2 STATUTORY AND REGULATORY BACKGROUND Title XVIII of the Social Security Act, commonly known as the Medicare statute, see 42 U.S.C. §§ 1395 et seq., establishes a federal health insurance program for the elderly and disabled – the Medicare program. See id.

FiberLight, 81 F. Supp. 3d at 97. By contrast, as Plaintiff observes, this case arises under the Medicare statute, 42 U.S.C. § 1395 et seq., Compl. ¶¶ 9, 10, which, except for the LCD and NCD provisions, see supra at 8-9, does not allow claimants to use declaratory judgments to short-cut administrative review of future claims.

STATUTORY AND REGULATORY BACKGROUND A. Medicare Program: Transition from “Reasonable Cost” to “Prospective Payment” The Federal Medicare program provides health insurance to the aged, blind, and disabled under title XVIII of the Social Security Act. 42 U.S.C. § 1395 et seq. It consists of five parts, one of which—Part B—is relevant here.

Yet one state, Delaware, continues to prevent one of the Plaintiffs from enrolling in Medicaid. CMS’s insistence on applying the must-bill criteria under these circumstances and insistence on a “valid” Medicaid RA as the only acceptable documentation to allow dual eligible bad debts, even where states refuse to issue them, is inconsistent with prior audit treatment, was not preceded by notice to the Plaintiffs of the change for non-Medicaid-participating providers, and amounts to a violation of the Medicare statute, 42 U.S.C. §§ 1395 et seq. (the “Medicare Act”), Medicare regulations and the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 551 et seq. For these reasons, and the other reasons discussed herein, CMS’s decision to affirm the fiscal intermediary’s adjustments denying Plaintiffs’ dual eligible bad debts is legally invalid and should be reversed.

POINT VI MORNINGSTAR'S MEDICARE ACT CLAIM MUST BE DISMISSED AS AGAINST HDI In Count VII of its Complaint, Morningstar alleges that Today's Options violated the Medicare Act, 42 U.S.C. § 1395, et seq., by withholding payments for services. Complaint, ¶¶ 72-75.

III. MEDICARE STATUTORY AND REGULATORY SCHEME A. Introduction - Medicare Statutory and Regulatory Scheme The Medicare program, which was enacted in 1965, is a federally funded program of health insurance for the aged, the disabled, and persons suffering from end stage renal disease. See 42 U.S.C. § 1395, et seq. (the “Medicare Act”). The Secretary of the United States Department of Health and Human Services (“the Case 1:16-cv-00873-DDD-JPM Document 15-1 Filed 02/09/17 Page 8 of 21 PageID #: 93 3 Secretary”), acting through the Administrator of the Centers for Medicare & Medicaid Services (“CMS”) has overall responsibility for the program and broad authority to “prescribe such regulations as may be necessary to carry out the administration of the insurance programs . . .” 42 U.S.C. § 1395hh(a)(1).