Rush University Medical Center v. Sylvia Mathews Burwell
763 F.3d 754
7th Cir.2014Background
- Rush University Medical Center sought Medicare IME reimbursement for residents’ "pure research" time for FY 1993, 1994, and 1996; fiscal intermediary and PRRB denied reimbursement; Administrator affirmed; district court granted Rush summary judgment relying on Univ. of Chicago.
- IME reimbursement depends on number of full‑time equivalent residents, which counts time spent in patient care and qualifying non‑patient care activities under 42 U.S.C. § 1395ww(d)(5)(B).
- From 1983 onward the agency generally interpreted the statute to exclude pure research; regulations in 2001 and 2006 explicitly excluded research not tied to patient treatment from countable time.
- The Affordable Care Act (2010) expressly excluded pure research from countable IME time beginning in FY2001 and generally stated the amendments apply to cost periods beginning Jan 1, 1983, but included a provision saying the post‑2001 exclusion "shall not give rise to any inference" about pre‑2001 interpretation.
- In Univ. of Chicago (7th Cir. 2010), decided after the ACA but before the agency’s implementing regulation, this court held pure research was countable for 1983–2001; after the agency promulgated a regulation applying the ACA exclusion retroactively to 1983, the present appeal raised whether Univ. of Chicago still controlled.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether residents’ "pure research" time (research not tied to treatment of a particular patient) is countable for IME for 1983–2001 | Rush: ACA's language permitting reimbursement for "non‑patient care activities" dating to 1983 plainly includes research; Univ. of Chicago controlling | Secretary: ACA delegated definitional authority to Secretary; regulations exclude pure research and are reasonable | Court: Agency regulation is entitled to Chevron deference; pure research may be excluded; reversed district court |
| Whether Univ. of Chicago’s earlier statutory interpretation precludes later contrary agency regulation | Rush: Univ. of Chicago interpreted statute unambiguously, so later regulation cannot override | Secretary: Brand X permits agency interpretation to prevail unless prior decision held statute unambiguous | Court: Univ. of Chicago did not establish the statute was unambiguous; Brand X allows agency to prevail |
| Whether Chevron step‑one (statute unambiguously resolves issue) or step‑two (permissible agency construction) applies | Rush: statute’s plain language resolves the question in hospital’s favor | Secretary: statute delegates definition of "research activities" and "non‑patient care activities" to agency, so Chevron applies | Court: Delegation exists; apply Chevron; agency interpretation reasonable |
| Whether the ACA "no‑inference" clause compels counting pre‑2001 pure research | Rush: clause unclear and cannot override broader ACA retroactivity language favoring reimbursement | Secretary: clause means Congress did not intend an inference about pre‑2001 treatment and also delegated definition to Secretary | Court: "No inference" means what it says; it does not compel Rush’s reading |
Key Cases Cited
- Univ. of Chi. Med. Ctr. v. Sebelius, 618 F.3d 739 (7th Cir. 2010) (earlier 7th Cir. holding that pure research time was countable for 1983–2001)
- Nat’l Cable & Telecomms. Ass’n v. Brand X Internet Servs., 545 U.S. 967 (2005) (prior judicial construction does not bar reasonable agency interpretation unless statute unambiguously forecloses it)
- Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (two‑step framework for reviewing agency statutory interpretations)
- R.I. Hosp. v. Leavitt, 548 F.3d 29 (1st Cir. 2008) (upholding agency practice excluding pure research from IME)
- Henry Ford Health Sys. v. Dep’t of Health & Human Servs., 654 F.3d 660 (6th Cir. 2011) (agency regulation converting the dispute into a Chevron deference case)
- Women Involved in Farm Econ. v. U.S. Dep’t of Agric., 876 F.2d 994 (D.C. Cir. 1989) (recognizing when statutory delegation signals agency has role in defining terms)