Medicare – Hospital Construction Financing

Listen to this article

7^th Circuit Court of Appeals

Case Name: St. Vincent Randolph Hospital, Inc., v. Thomas E. Price, Secretary of Health and Human Services

Case No.: 16-3956

Officials: WOOD, Chief Judge, and FLAUM and EASTERBROOK, Circuit Judges.

Focus: Medicare – Hospital Construction Financing

This appeal presents the question whether Medicare will reimburse some of the cost of financing the new hospital’s construction. The Acting Principal Deputy Administrator did not make anything of the difference in the amounts loaned by St. Vincent Indianapolis and Ascension Health. His decision therefore cannot be enforced on that ground—which at all events would not justify refusing to reimburse all costs of the full loan. This problem, if it is a problem at all, would justify no more than limiting reimbursement to the financing costs needed for the new hospital’s construction. Once problems in an administrative decision have been identified, a court remands to the agency for further consideration. Negusie v. Holder, 555 U.S. 511, 523–24 (2009). The “taint” theory is legally untenable and cannot be reasserted on remand, but the agency is free to ask the Hospital for more or better documentation and to explore the significance of the difference in the principal amounts of the two loans. The judgment of the district court is vacated, and the case is remanded with instructions to remand the proceeding to the Secretary for proceedings consistent with this opinion

Vacated and Remanded

Full Text

Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.