Northeast Hospital Corp. v. Sebelius
398 U.S. App. D.C. 43
| D.C. Cir. | 2011Background
- Medicare DSH formula depends on hospital patient days 'made up of' Part A entitlement on those days.
- Northeast Hospital challenges counting Medicare+Choice (M+C) days in Medicaid fraction.
- Secretary had counted M+C days as Part A-entitled days, affecting Beverly Hospital’s reimbursements.
- District court ruled for Northeast on plain-language interpretation; court of appeals reviews Chevron two-step framework.
- Major issue: whether M+C enrollees remain entitled to Part A benefits for days when enrolled in Part C.
- Court ultimately rules: statute not unambiguously foreclosing Secretary's interpretation; retroactivity bars applying current interpretation to 1999-2002 period.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether M+C enrollees are entitled to Part A benefits for DSH | Northeast: M+C enrollees not Part A-entitled | Secretary: M+C enrollees remain Part A-entitled | Statute not unambiguous; Secretary's view permissible under Chevron Step One |
| Whether the Secretary may apply interpretation retroactively | Northeast: retroactive application invalid | Secretary: interpretation should apply | Retroactive rulemaking forbidden; cannot apply to 1999-2002 period |
| Whether subsequent provisions confirm or deny interpretation | Northeast: other provisions imply exclusivity of Part A | Secretary: later provisions support mixed entitlement | Statutory gap; later provisions do not unambiguously foreclose Secretary's view |
| Chevron Step Two viability | Northeast: interpretation not reasonable | Secretary: interpretation reasonable | Court does not reach Step Two; retroactivity controls |
Key Cases Cited
- Chevron U.S.A. Inc. v. National Resources Defense Council, Inc., 467 U.S. 837 (U.S. 1984) (establishes two-step Chevron framework; defer if reasonable)
- National Cable & Telecommunications Ass'n v. FCC, 567 F.3d 659 (D.C. Cir. 2009) (whether statute is unambiguous; deference to agency interpretation if ambiguous)
- Cabell Huntington Hosp. v. Shalala, 101 F.3d 984 (4th Cir. 1996) (entitled vs. eligible meanings in Medicare context)
- Legacy Emanuel Hosp. & Health Ctr. v. Shalala, 97 F.3d 1261 (9th Cir. 1996) (distinguishes entitlement in Medicare from Medicaid terms)
- Jewish Hosp., Inc. v. Sec’y of Health & Human Servs., 19 F.3d 270 (6th Cir. 1994) (entitled to benefits meaning right to payment)
- FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120 (U.S. 2000) (contextual statutory interpretation; read in overall scheme)