815 F.3d 448
8th Cir.2016Background
- SEARK (Southeast Arkansas Hospice, Inc.) operates two hospice facilities and voluntarily entered into a Medicare provider agreement, agreeing to follow section 1866 and applicable regulations.
- Medicare imposes an annual statutory cap on hospice reimbursement; amounts above the cap must be refunded.
- The Secretary issued seven repayment demands to SEARK invoking that reimbursement cap.
- SEARK sued, alleging the repayment demands under the statutory cap amounted to a Fifth Amendment taking requiring just compensation.
- The district court granted summary judgment for the Secretary; SEARK appealed.
- The Eighth Circuit reviewed the summary-judgment ruling de novo and affirmed, finding no compensable taking.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether application of Medicare hospice reimbursement cap effects a Fifth Amendment taking | SEARK: cap and repayment demands forcibly remove property (payments) requiring just compensation | Secretary: cap is a lawful allocation of public subsidy under a voluntary program; not a taking | No taking; summary judgment for Secretary affirmed |
| Whether cap’s economic impact renders hospice operation unviable | SEARK: cap makes profitable operation impossible or destroys reasonable expectations | Secretary: SEARK offered no evidence that cap made business unprofitable or impossible | Court: no evidence of catastrophic economic impact; factor favors no taking |
| Whether SEARK had reasonable investment-backed expectations protected by Takings Clause | SEARK: expected to keep reimbursements received before repayment demands | Secretary: SEARK voluntarily joined Medicare with notice of statutory regime and limits | Court: voluntary participation undermines claim; expectations not protected in this context |
| Whether voluntariness of program participation bars a takings claim | SEARK: participation does not waive constitutional protections against takings | Secretary: voluntary acceptance of program terms precludes an imposed taking | Court: voluntariness forecloses takings claim (distinguishing contexts where exchange is involuntary) |
Key Cases Cited
- Pennsylvania Coal Co. v. Mahon, 260 U.S. 393 (regulation that goes too far is a taking)
- PruneYard Shopping Center v. Robins, 447 U.S. 74 (test for regulatory takings factors)
- Ruckelshaus v. Monsanto Co., 467 U.S. 986 (voluntary regulatory exchanges limit takings claims)
- Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470 (economic impact standard for takings)
- Minnesota Ass’n of Health Care Facilities v. Minnesota Dep’t of Public Welfare, 742 F.2d 442 (8th Cir.) (voluntary participation in public program precludes takings claim)
- Horne v. Department of Agriculture, 135 S. Ct. 2419 (2015) (distinguishing involuntary takings from voluntary exchanges)