Adventist Health System/Sunbel v. Kathleen Sebelius
715 F.3d 157
6th Cir.2013Background
- Adventist seeks review of the Secretary’s interpretation of the Medicare DSH Medicaid fraction statute for 1995–2000.
- DSH adjustment uses a Medicaid days numerator (days eligible for medical assistance under a State plan XIX) and a denominator of all hospital days.
- TennCare expansion waiver under 42 U.S.C. § 1315(a)(2)(A) allowed expansion populations to be treated as expenditures under a State plan, impacting how costs might be counted.
- Pre-2000, some fiscal intermediaries included expansion waiver days in DSH, others did not, creating discrepancies in reimbursement.
- Interim Final Rule (Jan. 2000) and later DRA amendments addressed counting of expansion waiver days; DRA ratified the 2000 policy.
- District court upheld the agency’s exclusion of expansion waiver days from the DSH calculation; Adventist appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did Congress directly address expanding waiver days in the DSH rule? | Adventist: include waiver days as DSH days under XIX. | Adventist: language leaves room to count expansion days; Secretary’s approach permissible. | Statute silent/ambiguous; agency construction permissible. |
| Is the DRA retroactive on the counting of expansion waiver days? | Exclusion cannot be retroactive reliance on prior practice. | DRA clarifies, ratifies interim policy; no retroactivity concern. | DRA clarifies rather than changes the law; no retroactivity issue. |
| Did the Secretary err in excluding expansion waiver days from the DSH calculation during the period in question? | Exclusion undermines congressional purpose and prior practice to count expansion days. | Exclusion reflects permissible statutory construction consistent with 1315 and prior rulings. | Exclusion was a permissible construction of the statute. |
Key Cases Cited
- Jewish Hosp., Inc. v. Sec'y of Health & Human Servs., 19 F.3d 270 (6th Cir. 1994) (DSH/Medicare adjustment context; high-costs of low-income patients)
- Cookeville Reg'l Med'l Ctr. v. Leavitt, 531 F.3d 844 (D.C. Cir. 2008) (DRA and expansion waiver counting; agency discretion)
- Portland Adventist Med. Ctr. v. Thompson, 399 F.3d 1091 (9th Cir. 2005) (statutory ambiguity; secretary discretion to count costs)
- Estate of Gerson v. Comm'r of Internal Revenue, 507 F.3d 435 (6th Cir. 2007) (statutory interpretation; Supreme Court Chevron framework)