FILED
                                                               United States Court of Appeals
                                                                       Tenth Circuit

                                                                       June 20, 2011
                      UNITED STATES COURT OF APPEALS Elisabeth A. Shumaker
                                                                       Clerk of Court
                                   TENTH CIRCUIT


 STORMONT-VAIL REGIONAL
 MEDICAL CENTER,

          Plaintiff - Appellant,
                                                         No. 10-3123
 v.                                          (D.C. No. 5:08-CV-04065-JAR-JPO)
                                                          (D. Kan.)
 KATHLEEN SEBELIUS, Secretary of
 Health and Human Services,

          Defendant - Appellee.


                              ORDER AND JUDGMENT *


Before KELLY, SEYMOUR, and O’BRIEN, Circuit Judges.


      This is an appeal from the district court’s order affirming the Provider

Reimbursement Review Board’s (“PRRB”) determination that it lacked

jurisdiction over Plaintiff-Appellant Stormont-Vail Regional Medical Center’s

(“Stormont-Vail”) appeal from the decision of a fiscal intermediary regarding

Medicare reimbursement. In relevant part, the district court held that Stormont-

Vail conceded that the PRRB decision was correct. We have jurisdiction under



      *
        This order and judgment is not binding precedent, except under the
doctrines of law of the case, res judicata, and collateral estoppel. It may be cited,
however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th
Cir. R. 32.1.
28 U.S.C. § 1291, and we affirm.



                                    Background

A.    Medicare Reimbursement Scheme.

      It goes without saying that this country’s healthcare system, particularly

Medicaid and Medicare, are immensely complicated. The district court provided

a comprehensive overview of the Medicare reimbursement system, and we need

not repeat it here. See Stormont-Vail Reg’l Med. Ctr. v. Sebelius, 

1178, 1180-82 (D. Kan. 2010). Suffice it to say that the federal government

reimburses hospitals that provide care to patients covered by Medicare. The

reimbursement rates are subject to certain adjustments. At issue in this case is the

Disproportionate Share Hospital adjustment (the “DSH adjustment”) 1, an

adjustment for hospitals that provide care to a disproportionate number of low-

income patients. Aplt. Br. 4; 42 U.S.C. § 1395ww(d)(5)(F). The DSH adjustment

is determined in part by a factor referred to as the Medicaid Fraction.

      1
      The parties make extensive use of acronyms. Below is a summary of
acronyms used throughout this order and judgment.

APA                Administrative Procedures Act
DHHS               Department of Human Health and Services
DSH Adjustment     Disproportionate Share Hospital Adjustment
EBUDs              Eligible but Unpaid Days
FI                 Fiscal Intermediary
NPR                Notice of Program Reimbursement
PRRB               Provider Reimbursement Review Board


                                        -2-
See Stormont-Vail, 

at 1180. The Medicaid Fraction is the

number of hospital patient days provided to patients who are eligible for

Medicaid—but not Medicare—benefits under a state-run Medicaid program,

divided by the total number of hospital patient days. See 

(citing 42

U.S.C. § 1395ww(d)(5)(F)(vi)(II)).

      During the relevant time period, the Kansas Medicaid program did not pay

hospitals for Medicaid-eligible patients if those patients’ hospital stays were fully

paid from another source, such as a vehicle insurance policy. See 

In

other words, hospitals in Kansas did not receive Medicaid payments for

all Medicaid-eligible patient days. We refer to these patient days as “eligible-but-

unpaid days,” or “EBUDs.”

      Prior to 1997, federal regulations excluded EBUDs from the DSH

adjustment. Aplt. Br. 9 (citing Fiscal Year 1986 Changes to the Inpatient

Hospital Prospective Payment System, 51 Fed. Reg. 16,772, 16,777 (May 6,

1986)). However, that changed in 1997 when the Administrator of the Health

Care Financing Administration 2 issued a ruling (“Ruling 97-2”) that required the

DSH—specifically, the Medicaid Fraction—to include all Medicaid-eligible

patient days, regardless of whether the hospital received payment from another

source. See II Aplt. App. 497-98. In other words, Ruling 97-2 required the DSH

      2
       In 2001, the Health Care Financing Administration became the Center for
Medicare and Medicaid Services. See Aplee. Br. 5 (citing Statement of
Organization, 66 Fed. Reg. 35437-03 (July 5, 2001)).

                                         -3-
adjustment to include EBUDs.

      A hospital’s reimbursement, including the DSH adjustment, is determined

by a fiscal intermediary (“FI”), acting as the agent of the Secretary of the

Department of Human Health and Services (“DHHS”). See Stormont-Vail, 708 F.

Supp. 2d at 1181. A hospital can appeal the FI’s final reimbursement decision,

referred to as the Notice of Program Reimbursement (“NPR”), to the PRRB. 

has jurisdiction over an appeal if, inter alia, the hospital “is

dissatisfied with a final determination of the organization serving as its fiscal

intermediary . . . .” 42 U.S.C. § 1395oo(a); see Bethesda Hosp. Ass’n v. Bowen,

, 403-04 (1988). During the time period at issue in this case, a

hospital could add new issues to a pending, jurisdictionally proper appeal at any

time prior to the PRRB hearing. See 42 C.F.R. § 405.1841(a)(1) (2000) (“Prior to

the commencement of the hearing proceedings, the provider may identify in

writing additional aspects of the intermediary’s determination with which it is

dissatisfied and furnish any documentary evidence in support thereof.”)

      If the Secretary of the DHHS takes no action, a PRRB decision becomes

final within sixty days, after which hospitals can petition a federal district court

to review the PRRB’s decision under the standards of the Administrative

Procedures Act (“APA”). See 42 U.S.C. § 1395oo(f)(1); see Little Co. of Mary

Hosp. v. Sebelius, 

, 853 (7th Cir. 2009), Marymount Hosp., Inc. v.

Shalala, 

, 661 (D.C. Cir. 1994).

                                         -4-
B.    Factual Background.

      This case arises from Stormont-Vail’s DSH adjustment for the 1994 fiscal

year. The DSH adjustment in the original NPR did not include EBUDs. II Aplt.

App. 519; see Aplt. Br. 17, Aplee. Br. 7. In January 1997, Stormont-Vail

appealed to the PRRB, seeking, inter alia, inclusion of EBUDs in the 1994 DSH

adjustment. II Aplt. App. 514-15, 517. After the appeal was filed, but before the

PRRB hearing, the Secretary issued Ruling 97-2.

      In response to Ruling 97-2, the FI sent Stormont-Vail a letter that stated,

      The above referenced [appeal] has been approved for a Partial
      Administrative Resolution concerning the issue of Medicaid eligible
      days as defined in HCFA Ruling No. 97-2.

      Please advise the PRRB Board that you have agreed to this partial
      administrative resolution and are dropping this portion of your facility’s
      appeal issue.

      II Aplt. App. 476.

      Pursuant to this partial administrative resolution, the FI included 14,959

EBUDs in Stormont’s 1994 DSH adjustment. It issued a revised NPR to that

effect on June 10, 1998. II Aplt. App. 479; see Stormont-Vail, 

at

1183. Stormont-Vail did not appeal the revised NPR.

      On June 16, 2000, Stormont-Vail sought to add two new issues to its appeal

from the original 1994 NPR, which was still pending. II Aplt. App. 506.

Stormont-Vail contended that (1) the FI failed to include all EBUDs in the DSH

adjustment, and (2) the FI failed to include “general assistance” days in the DSH

                                         -5-
adjustment. Id.; see Aplt. Br. 5 n.2, 18 n.8. Stormont-Vail represents in its

appellate brief that, after it added these two new issues to the appeal, it sought

information from Kansas (“Matching Data”) regarding potential new EBUDs.

Aplt. Br. 18-19. However, Stormont-Vail does not indicate whether or when the

State of Kansas provided the Matching Data.

      In March 2008, the PRRB held that it did not have jurisdiction over the new

issues because Stormont-Vail was not dissatisfied with the FI’s decision. See II

Aplt. App. 465-68. Specifically, the PRRB held that Stormont-Vail was not

dissatisfied because, pursuant to the partial administrative resolution, it had

received all the relief it sought, namely inclusion of EBUDs in the DSH

adjustment. 3 

In other words, the PRRB held that the supposedly

“new” EBUDs issue was actually settled in the partial administrative resolution.

According to the PRRB, because Stormont-Vail had received the relief it

requested, it could not have been dissatisfied with the FI’s decision, and the

PRRB therefore did not have jurisdiction over the issue. 

a complaint for judicial review of the PRRB’s decision.

See I Aplt. App. 7. The district court held that the PRRB erred in with regard to

the general assistance days issue. See Stormont-Vail, 

at 1186.

The district court further held that Stormont-Vail, in the course of its argument

      3
         The PRRB also held that the general assistance days issue was included
in the partial administrative resolution. See II Aplt. App. at 466. That issue is
not presented on appeal.

                                         -6-
regarding the general assistance days, had conceded that the new EBUDs issue

fell within the partial administrative resolution. 

According to the

court, given this concession, the PRRB correctly determined that it did not have

jurisdiction over that issue. 

court’s disposition concerning the

new EBUDs issue rested entirely upon Stormont-Vail’s concessions. See 

appealed. See II Aplt. App. 393.



                                     Discussion

      When faced with an appeal from the district court’s disposition of a party’s

petition for review of an agency decision, we “afford no particular deference to

the district court’s review of the agency’s action; our review of the administrative

record pertaining to the challenged action is independent.” Cherokee Nation of

Okla. v. Norton, 

, 1078 (10th Cir. 2004) (internal quotation marks

and citations omitted); see Marymount 

(“We review the

[Provider Reimbursement] Board’s decision without deference to the district

court’s determination.” (citation omitted)). However, as we made clear in Berna

v. Chater, 

, 632 (10th Cir. 1996), an appeal from the district court’s

affirmance of an agency decision, “[t]he scope of our review . . . is limited to the

issues the claimant properly preserves in the district court and adequately presents

on appeal.” We explained,

             This court has on a number of recent occasions recognized that

                                        -7-
      waiver principles developed in other litigation contexts are equally
      applicable to social security cases. Thus, waiver may result from the
      disability claimant’s failure to (1) raise issues before the magistrate
      judge, Marshall v. Chater, 

, 1426 (10th Cir. 1996), (2)
      object adequately to the magistrate judge’s recommendation, Soliz v.
      Chater, 

, 375-76 (10th Cir. 1996), (3) preserve issues in
      the district court as a general matter, Crow v. Shalala, 

,
      324 (10th Cir. 1994), or (4) present issues properly to this court,
      Murrell v. Shalala, 

, 1389-90 (10th Cir. 1994).

      

(quoting James v. Chater, 

, 1344 (10 th Cir. 1996)

(brackets and quotation marks omitted)). We further pointed out that “Marshall,

Soliz, and Crow all impose waiver consequences for procedural omissions in the

district court, illustrating that the administrative origin of a social security appeal

does not negate the legal effect of interim proceedings conducted in district

court.” 

      In this case, the district court was presented with two issues: (1) whether

the PRRB erred in determining that it did not have jurisdiction over the “general

assistance days” issue that Stormont-Vail attempted to add to its initial appeal,

and (2) whether the PRRB erred in determining that it did not have jurisdiction

over the “new EBUDs” issue. See I Aplt. App. 24; Stormont-Vail, 

at 1183; Aplt. Br. 5 n.3. Stormont-Vail appeals only the district court’s

decision on the second issue.

      As we 

, the sole rationale for the court’s disposition of the

second issue was Stormont-Vail’s apparent concession in its pleadings before the

district court. See Stormont-Vail, 

at 1190.

                                          -8-
      On appeal, the majority of Stormont-Vail’s arguments address the merits of

the PRRB decision. See Aplt. Br. 20-24. Specifically, Stormont-Vail argues that

the PRRB erred in determining that the partial administrative resolution

encompassed the new EBUDs issue because (1) the partial resolution did not

constitute a binding settlement agreement, Aplt. Br. 28; (2) the partial resolution

did not release any claims, 

(3) the PRRB’s decision was inconsistent

with its treatment of the same issue in 1995, 

(4) it had the right to add

new issues to its pending appeal, so long as the prior appeal was proper, 

38; and (5) the PRRB’s decision frustrated the national policy of including all

EBUDs in the DSH adjustment, 

      Stormont-Vail’s opening brief does contain a section specifically

challenging the district courts’ decision. See 

However, Stormont-Vail

does not so much as mention the district court’s holding that it had conceded the

new EBUDs issue. See 

Most importantly, Stormont-Vail does not

argue that the district court erred in holding that it had conceded the issue below,

and it does not attempt to explain how the language quoted by the district court

did not constitute a binding concession. See 

the Secretary’s brief specifically notes that the district court

decided the new EBUDs issue solely on concession grounds, and argues that

Stormont-Vail failed to challenge this holding on appeal. Aplee. Br. 12-14, 18-

19. Yet, in its reply brief Stormont-Vail does not even acknowledge, much less

                                         -9-
address, the Secretary’s arguments on this point.

      In sum, Stormont-Vail fails to challenge the district court’s holding

regarding the very issue it seeks to appeal. The district court held that Stormont-

Vail had conceded the new EBUDs issue, and Stormont-Vail does not argue that

the court erred in so holding. Nor could it do so. Although Stormont-Vail

initially challenged in district court the PRRB’s decision on the ground it argues

to us, it effectively withdrew that challenged when it conceded the PRRB

correctly decided it lacked jurisdiction because the issue had been previously

settled. Having thereby failed to preserve its scope-of-the-settlement argument in

the district court, Stormont-Vail cannot now contest the scope of the settlement

on appeal to us. See Crow v. Shalala, 

, 324 (10th Cir. 1994) (“Absent

compelling reasons, we do not consider arguments that were not presented to the

district court.” (citation omitted)). Accordingly, Stormont-Vail has waived any

argument that the PRRB erred when it decided it lacked jurisdiction over the

Medicare reimbursement issue. Under these circumstances, we cannot provide

appellate relief.

      AFFIRMED.


                                      Entered for the Court


                                      Paul J. Kelly, Jr.
                                      Circuit Judge


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