United States District Court, D. New Hampshire
New Hampshire Hospital Association et al.
Alex M. Azar,  Secretary, U.S. Department of Health and Human Services et al.
B. MCCAFFERTY UNITED STATES DISTRICT JUDGE
November 2015, several New Hampshire hospitals and the New
Hampshire Hospital Association (“NHHA”), a
non-profit trade association, brought suit in this court
against the Secretary of Health and Human Services, the
Centers for Medicare and Medicaid Services
(“CMS”), and the Administrator of CMS. See New
Hampshire Hosp. Ass'n v. Burwell, No. 15-cv-460-LM
(D.N.H. 2015). Plaintiffs alleged in that suit that
defendants set forth certain “policy
clarifications” regarding the method of calculating
supplemental payments to certain hospitals. They alleged
these policy clarifications were issued in responses to
frequently asked questions posted on medicaid.gov, and that
both the policies themselves and the manner in which they
were promulgated contradict the plain language of the
Medicaid Act and violate the Administrative Procedure Act
(“APA”). This court granted plaintiffs'
motion for summary judgment, holding that defendants'
enforcement of the policy clarifications set forth in the
responses to frequently asked questions violated the APA.
New Hampshire Hosp. Ass'n v. Burwell, No.
15-cv-460-LM, 2017 WL 822094, at *8-14 (D.N.H. Mar. 2, 2017),
aff'd sub nom. New Hampshire Hosp. Ass'n v.
Azar, 887 F.3d 62 (1st Cir. 2018). The court permanently
enjoined defendants from enforcing the policies in the
responses to the frequently asked questions, but took no
position as to whether those policies could be enforceable if
set forth in a validly promulgated rule or regulation.
Id. at *12 n.16.
the court issued its order, defendants published a final rule
regarding the calculation of the supplemental payments. See
Medicaid Program: Disproportionate Share Hospital
Payments-Treatment of Third Party Payers in Calculating
Uncompensated Care Costs, 82 Fed. Reg. 16114-02, 16117 (Apr.
3, 2017) (“Final Rule”). The Final Rule expressly
included within its text the policies that had been set forth
in the responses to the frequently asked questions.
brought this suit, seeking declaratory and injunctive relief
to prevent defendants from enforcing the Final Rule.
Plaintiffs represented that they would suffer irreparable
harm once the Rule became effective, and the court set an
expedited briefing schedule for the parties'
cross-motions for summary judgment so that it could rule on
the motions prior to the date the Final Rule went into
March 5, 2018, after the parties filed their briefing in
support of their cross-motions for summary judgment but
before oral argument, plaintiffs submitted a “Notice of
Supplemental Authority Invalidating the Final Rule.”
Doc. no. 38. In that notice, plaintiffs stated: “On
March 2, 2018, the Court in Children's Hosp. Assoc.
of Texas v. Price, No. 17-844 (D.C. Cir.), which also
has been considering the validity of the Final Rule based on
cross motions for summary judgment, issued an order
invalidating and vacating that rule.” Id. at
1. Plaintiffs included with their notice a copy of the order
in Children's Hospital Ass'n of Texas and
noted that a memorandum opinion explaining the order's
reasoning had not yet been issued. Plaintiffs also stated:
“By vacating the Final Rule, the Order is dispositive
of the issues pending before this Court.” Id.
March 7, 2018, plaintiffs submitted a “Notice of
Supplemental Authority Vacating the Final Rule, ” doc.
no. 39, to which they attached a copy of the March 6, 2018
memorandum opinion in Children's Hospital Ass'n
of Texas. That opinion described the basis for the
court's March 2, 2018 order. See
Children's Hosp. Ass'n of Texas v. Azar, No.
CV 17-844 (EGS), 2018 WL 1178024 (D.D.C. Mar. 6, 2018)
(Sullivan, J.). In this notice, plaintiffs stated that they
“believe that the vacatur of the Final Rule is
dispositive of the issues pending before this Court.”
Id. at 2.
March 19, 2018, the parties submitted a status report
concerning the impact of the Children's Hospital
decision. See doc. no. 40. In the status report, the parties
stated that they
agree that the Children's Hospital Ass'n of
Texas ruling has the effect of vacating the [Final Rule]
in a way that prevents its application anywhere, including
with respect to the plaintiffs in this case. The defendants
have indicated that they intend to act accordingly and will
not enforce the rule as long as the Children's
Hospital Ass'n of Texas decision remains operative
in its current form.
Id. at ¶ 2. The parties also stated:
Nevertheless, the parties agree that the Children's
Hospital Ass'n of Texas ruling does not affect this
Court's jurisdiction to independently rule on the
validity of the [Final Rule] in this case. The plaintiffs in
this case are not parties to the judgment in
Children's Hospital Ass'n of Texas, and the
Government is considering whether to appeal the
Children's Hospital Ass'n of Texas ruling.
Given the possibility of an appeal in Children's
Hospital Ass'n of Texas, the plaintiffs also do not
wish to voluntarily dismiss this case.
Id. at ¶ 3.
March 28, 2018, in response to the parties' status
report, the court issued a procedural order. See doc. no. 42.
In that order, the court stated:
Judge Sullivan's ruling in Children's Hospital
Ass'n of Texas vacating the Rule at issue in this
case appears to render the parties' dispute moot.
See, e.g., D.H.L. Assocs., Inc. v.
O'Gorman, 199 F.3d 50, 54 (1st Cir. 1999) (holding
that the court lacked jurisdiction to enjoin the enforcement
of ordinances that were no longer in effect). That is
particularly true in light of defendants' statement in
the parties' joint status report that the ruling prevents
application of the Rule and they will not enforce it so long
as the Children's Hospital Ass'n of Texas
decision remains operative in its current form. Therefore, it
does not appear that a favorable ruling from this court would
redress any actual injury suffered by plaintiffs.
Id. at 3-4. The court also stated: “any party
asserting that this court continues to have jurisdiction over
this case shall file a brief showing cause why this case
should not be dismissed in light of the Children's