Atrium Medical Center v. United States Department of Health & Human Services
766 F.3d 560
| 6th Cir. | 2014Background
- Hospitals challenged CMS wage index calculation for Medicare Part A inpatient payments in Cincinnati and rural Iowa.
- Dispute focused on whether short-term disability costs paid from general funds via payroll count as wages or wage-related costs.
- Dispute also over counting Baylor Plan unworked hours (full-time equivalency for weekend work) for the wage index.
- CMS classified short-term disability paid from general funds as paid time off (wages) and included corresponding hours.
- Baylor Plan hours were counted as paid hours to reflect salary-based compensation and benefits.
- District court granted summary judgment for Secretary; court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CMS may treat non-insurance short-term disability as wages | Hospitals argue hours are wage-related costs. | CMS may treat non-insurance short-term disability as wages. | CMS's approach not manifestly contrary; upheld. |
| Whether Baylor Plan unworked hours must be counted as paid hours | Unworked Baylor hours are phantom, not paid hours. | Paid hours approach includes Baylor hours for benefits. | Secretary's interpretation to include all Baylor hours upheld. |
| What deference applies to CMS wage-index interpretations in PRM | PRM interpretations should be Skidmore deference. | PRM portions warrant Chevron deference as rules carrying force of law. | Chevron deference applicable; decision sustained. |
Key Cases Cited
- Sarasota Memorial Hosp. v. Shalala, 60 F.3d 1507 (11th Cir. 1995) (uniform wage index, consistent treatment of inputs)
- Adventist Glen-Oaks Hosp. v. Sebelius, 663 F.3d 939 (7th Cir. 2011) (paid hours rule; administrative simplicity)
- Methodist Hosp. of Sacramento v. Shalala, 38 F.3d 1225 (D.C. Cir. 1994) (broad discretion to reflect regional wage variations)
- Se. Ala. Med. Ctr. v. Sebelius, 572 F.3d 912 (D.C. Cir. 2009) (uniformity in wage index, equal treatment of inputs)
- Barnhart v. Walton, 535 U.S. 212 (Supreme Court 2002) (Chevron deference factors; interstitial questions)
- Thomas Jefferson Univ. v. Shalala, 512 U.S. 504 (Supreme Court 1994) (deference in complex regulatory programs)
- Southern Rehabilitation Group, P.L.L.C. v. Sec’y of HHS, 732 F.3d 670 (6th Cir. 2013) (Skidmore vs Chevron in Medicare claims processing context)