University of Washington Medical Center v. Sebelius
634 F.3d 1029
9th Cir.2011Background
- Hospitals challenge the Secretary’s exclusion of GAU/MI patients from Medicare DSH calculations, appealing district court judgment upholding exclusion.
- Medicare DSH increases reimbursements for hospitals serving many low-income Medicare patients; it uses proxies including patients eligible for medical assistance under state plans.
- Washington extended Medicaid-like coverage to GAU and MI populations using state funds, indirectly funded by federal Medicaid DSH dollars, supervised by the Department.
- GAU/MI patients are not categorically or medically needy under the Medicaid plan, but their care is subsidized with federal DSH funds through Washington’s plan.
- Hospitals argued GAU/MI patients are eligible for medical assistance under Washington’s State plan; the Secretary rejected this, excluding them from DSH calculations.
- Administrative and district court proceedings upheld the Secretary’s view as reasonable; the Hospitals appeal to the Ninth Circuit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does 'eligible for medical assistance' under subchapter XIX include GAU/MI patients? | Hospitals assert GAU/MI are Medicaid beneficiaries via Washington plan. | Secretary: GAU/MI are not eligible for medical assistance under subchapter XIX. | GAU/MI not eligible; excluded from DSH. |
| Is the phrase 'eligible for medical assistance' interpreted by the court under Chevron step one or two? | If not, ambiguous term should include GAU/MI via plan's funding. | Term unambiguously limited to traditional Medicaid. | Unambiguous; Chevron step one confirms exclusion. |
| Does the existence of federal funds indirectly subsidizing GAU/MI require inclusion in DSH calculations? | Federal funds subsidize GAU/MI, so they are medical assistance. | DSH funds are lump sums not tied to individual patients; not medical assistance. | Not medical assistance; no inclusion. |
| Do structural differences between Medicare DSH and Medicaid DSH affect eligibility interpretation? | Both rely on low-income proxies; GAU/MI should be treated as eligible. | Proxies and funding mechanisms differ; cannot equate them. | Differences control; GAU/MI not eligible. |
Key Cases Cited
- Legacy Emanuel Hosp. & Health Ctr. v. Shalala, 97 F.3d 1261 (9th Cir. 1996) (defines 'eligible for medical assistance' as capable of receiving Medicaid-type benefits)
- Phoenix Mem'l Hosp. v. Sebelius, 622 F.3d 1219 (9th Cir. 2010) ( Medicaid medical assistance is a statutory term of art)
- Adena Reg'l Med. Ctr. v. Leavitt, 527 F.3d 176 (D.C. Cir. 2008) (limits 'medical assistance' to enumerated Medicaid categories)
- Cooper Univ. Hosp. v. Sebelius, 686 F. Supp. 2d 483 (D.N.J. 2010) (Medicaid definition of 'medical assistance' governs interpretation)
- Loma Linda Univ. Med. Ctr. v. Leavitt, 492 F.3d 1065 (9th Cir. 2007) (Secretary not bound by hospital stipulations; consider full administrative record)
- Portland Adventist Med. Ctr. v. Thompson, 399 F.3d 1091 (9th Cir. 2005) (standard of review for summary judgment and agency interpretations)
- Spry v. Thompson, 487 F.3d 1272 (9th Cir. 2007) (describes minimum coverage for categorically and medically needy)
- Atl. Cleaners & Dyers v. United States, 286 U.S. 427 (1932) (identical language in different parts of the same act should carry same meaning)