In a decision issued on November 21, 2017, the D.C. Circuit affirmed the district court determination that the Affordable Care Act (ACA) bars judicial review of CMS’s determination to grant or deny a hospital’s Stark Law expansion application. Knapp Medical Center, et al., v. Hargan, No. 16-5234 (D.C. Cir. Nov. 21, 2017). The decision is available here.
The ACA amended the physician-owned hospital exception under the Stark Law by limiting the ability of a physician-owned hospital to expand, known as the expansion prohibition. Subject to approval by the Secretary, there is an exception, however, for certain hospitals in medically underserved communities, referred to as “applicable hospitals” and “high Medicaid facilities” under the statute that meet certain statutory requirements. See 42 U.S.C. § 1395nn(i)(3). The statute authorizes the Secretary to establish and implement a process under which a hospital may apply for an exception from the expansion prohibition and precludes administrative and judicial review of the Secretary’s determination.
Doctors Hospital at Renaissance (DHR), a physician-owned hospital in Hidalgo County, Texas, applied to expand as an applicable hospital. Competing hospitals in Texas (Knapp Medical Center, McAllen Hospitals, L.P. and Cornerstone Regional Hospital, L.P., collectively, Knapp) filed comments opposing DHR’s expansion application. CMS approved DHR’s expansion application over Knapp’s objections. Shortly following CMS’s approval, Knapp sued to set aside CMS’s decision and block DHR’s expansion. In what appears to be a case of...
