Covenant Medical Center, Inc. v. Secretary of Health and Human Services, 1:12-cv-12901

Covenant Medical Center challenges the Secretary’s denial of Medicare GME and related costs for 2002–2006 after ACA § 5504 amended § 1395ww(h).
The ACA § 5504(c) provides that cost reports with pending, jurisdictionally proper appeals at enactment are not mandatorily reopened, and the effective date is July 1, 2010.
The Secretary and Covenant disagreed whether § 5504(c) requires reopening pre-July 2010 cost reports with pending appeals, and whether retroactive application is permissible.
PRRB found no written agreement between Covenant and Synergy for 2002–2006, aligning with Covenant I’s outcome, and treated § 5504 as controlling.
Covenant sought expedited judicial review of the PRRB decision; the district court granted summary judgment to the Secretary, denying Covenant's petition and upholding no reopening.
The court applied Chevron deference to interpret § 5504(c) as not mandating reopening pre-July 2010 cost reports when there was a pending appeal at enactment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Covenant is collaterally estopped from raising the issues.	Covenant argues Covenant I does not preclude presenting these issues.	Secretary contends Covenant I and collateral estoppel bar relitigating the written-agreement issue.	Collateral estoppel does not preclude Covenant’s claims.
Whether § 5504(c) requires reopening pre-July 2010 cost reports with pending appeals.	Covenant argues § 5504(c) mandates reopening those pre-2010 reports.	Secretary argues § 5504(c) is prospective and does not require reopening absent a pending appeal.	The court adopts the Secretary’s prospective interpretation; § 5504(c) does not require reopening pre-2010 reports.
Whether the Secretary’s interpretation of § 5504(c) is a permissible construction of the statute (Chevron).	The wordings of § 5504(c) imply retroactive reopening is required for pending appeals.	The interpretation is reasonable and based on the statute’s text and context.	The Secretary’s interpretation is permissible under Chevron.

Thomas Jefferson Univ. v. Shalala, 512 U.S. 504 (1994) (Secretary authority to define reimbursable costs may be broad)
Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984) (two-step framework for agency interpretations)
Henry Ford Health Sys. v. Dept. of Health and Human Servs., 654 F.3d 660 (6th Cir. 2011) (retroactivity under ACA § 5505 discussed)
New England Power Generators Ass’n, Inc. v. FERC, 707 F.3d 364 (D.C. Cir. 2013) ( warns against negating antecedents in statutory reading)
Culbertson v. U.S. Dept. of Agriculture, 69 F.3d 465 (10th Cir. 1995) (agency deference in regulatory interpretations)
Landgraf v. USI Film Prods., 511 U.S. 244 (1994) (constitutional rule on retroactivity)