Adena Reg'l Med. Ctr. v. Johnson - Opposition

No. 08-818

In the Supreme Court of the United States

ADENA REGIONAL MEDICAL CENTER, ET AL., PETITIONERS

v.

CHARLES E. JOHNSON, ACTING SECRETARY OF HEALTH AND HUMAN SERVICES

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION
EDWIN S. KNEEDLER
Acting Solicitor General
Counsel of Record
MICHAEL F. HERTZ
Acting Assistant Attorney
General
ANTHONY J. STEINMEYER
AUGUST E. FLENTJE
Attorneys
Department of Justice
Washington, D.C. 20530-0001
(202) 514-2217

QUESTION PRESENTED

In calculating the Medicare disproportionate share hospital adjustment, the Secretary must count pa tient days attributable to "patients who * * * were eligible for medical assistance under a State plan ap proved under [the Medicaid statute]." 42 U.S.C. 1395ww(d)(5)(F)(vi)(II).

The question presented is whether the Secretary must count days attributable to patients who were not eligible for Medicaid but who were given charity care by hospitals under a state program.

In the Supreme Court of the United States

No. 08-818

ADENA REGIONAL MEDICAL CENTER, ET AL., PETITIONERS

v.

CHARLES E. JOHNSON, ACTING SECRETARY OF HEALTH AND HUMAN SERVICES

ON PETITION FOR A WRIT OF CERTIORARI
TO THE UNITED STATES COURT OF APPEALS
FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE RESPONDENT IN OPPOSITION

OPINIONS BELOW

The opinion of the court of appeals (Pet. App. 1a-9a) is reported at 527 F.3d 176. The opinion of the dis trict court (Pet. App. 10a-18a) is reported at 524 F. Supp. 2d 1.

JURISDICTION

The judgment of the court of appeals was entered on May 30, 2008. A petition for rehearing was denied on July 31, 2008 (Pet. App. 21a). On October 21, 2008, the Chief Justice extended the time within which to file a petition for a writ of certiorari to and including Novem ber 28, 2008. On November 18, 2008, Justice Stevens further extended the time to December 28, 2008, and the petition was filed on December 26, 2008. The jurisdic tion of this Court is invoked under 28 U.S.C. 1254(1).

STATEMENT

1. This case involves both the Medicaid and Medi care programs. Medicare provides payments for medi cal services for the elderly and disabled. 42 U.S.C. 1395c et seq. The Secretary of Health and Human Services (Secretary) pays hospitals serving Medicare recipients for covered inpatient services. 42 U.S.C. 1395ww(d). However, for those hospitals that serve a "significantly disproportionate number of low-income patients," 42 U.S.C. 1395ww(d)(5)(F)(i)(I), the Secretary provides an increased payment. The measuring stick for this extra payment is an equation called the Medicare disproportionate share hospital adjustment (Medicare DSH). The part of that equation at issue in this case is the "Medicaid fraction," which is defined as:

the fraction (expressed as a percentage), the numer ator of which is the number of the hospital's patient days for such period which consist of patients who (for such days) were eligible for medical assistance under a State plan approved under subchapter XIX of this chapter [i.e., the Medicaid program], but who were not entitled to benefits under part A of this subchapter [i.e., the Medicare program], and the de nominator of which is the total number of the hospi tal's patient days for such period.

42 U.S.C. 1395ww(d)(5)(F)(vi)(II) (emphasis added). In other words, the Medicaid fraction is a ratio comparing a hospital's provision of services to patients eligible for Medicaid but not entitled to Medicare, with the hospi tal's total provision of services. At issue in this case is the first portion (the numerator) of the Medicaid frac tion.1

Medicaid is a cooperative federal-state program which provides medical assistance to certain limited cat egories of low-income persons and other individuals who face serious financial burdens in paying for needed med ical care. 42 U.S.C. 1396 et seq. To participate in Medi caid, a State develops a plan that specifies the categories of eligible individuals who will receive medical assis tance and the specific kinds of medical care and services that will be covered. See 42 U.S.C. 1396a.

2. The State of Ohio has developed a Medicaid plan pursuant to the federal Medicaid requirements. See Ohio Rev. Code Ann. §§ 5111.01 et seq. (LexisNexis 2004). Additionally, Ohio has enacted a separate Hospi tal Care Assurance Program (HCAP), id. §§ 5112.01 et seq., under which participating hospitals must "provide, without charge * * * , basic, medically necessary hos pital-level services to" low-income Ohio residents who do not qualify for the State's Medicaid program, id. § 5112.17(B). HCAP does not reimburse hospitals for the charity care they are obligated to provide under the program.2

3. Petitioners are 25 Ohio hospitals that participate in HCAP. They requested the Secretary to include, in the Medicaid fraction of the Medicare DSH, patient days attributable to patients who receive charity care under HCAP. Pet. App. 13a. The Secretary declined, and af ter an unsuccessful administrative appeal, petitioners filed suit in the District Court for the District of Colum bia, alleging that the Medicare DSH "should include HCAP patients." Id. at 13a-15a. The district court granted petitioners' motion for summary judgment, id. at 10a-18a, reasoning that the Medicare DSH was "un ambiguous" and required the inclusion of charity-care patients, id. at 16a.

4. The court of appeals reversed, concluding for two separate reasons that the Medicare DSH does not in clude HCAP patients. First, the court observed that HCAP is not part of Ohio's Medicaid program and that accordingly "HCAP patients are not eligible for care 'un der a State plan approved under [Medicaid]' within the meaning of the Medicare statute." Pet. App. 4a. Sec ond, the court explained that HCAP charity-care pa tients "are not 'eligible for medical assistance' within the meaning of that term in the Medicare DSH provision." Id. at 3a. The term "medical assistance," the court ex plained, is "defined * * * in the federal Medicaid stat ute" as "'payment for part or all of the cost' of medical 'care and services,'" whereas "the HCAP does not entail any [such] payment." Id. at 7a.

ARGUMENT

The court of appeals' decision is correct, and con trary to petitioners' contention (Pet. 14-26), it does not conflict with any other court of appeals decision. Fur ther review is therefore unwarranted.

1. The Medicare DSH accounts for care given to patients "eligible for medical assistance under a State plan approved under [the federal Medicaid program]." 42 U.S.C. 1395ww(d)(5)(F)(vi)(II). The court of appeals correctly concluded that patient days attributable to charity care provided under HCAP should not be count ed in the Medicare DSH calculation.

a. As the court of appeals correctly held, the Medi care DSH cannot account for services provided under HCAP because HCAP "is not part of the Ohio 'State plan approved under [Medicaid].'" Pet. App. 3a (brack ets in original). Whereas state Medicaid plans must "provide for financial participation by the State," 42 U.S.C. 1396a(a)(2), HCAP "requires [petitioners] to care for indigent patients without payment," Pet. App. 4a. Moreover, HCAP itself recognizes that it applies only to low-income Ohio residents who "are not recipients of [the State's Medicaid assistance]." Ohio Rev. Code Ann. § 5112.17(B) (LexisNexis 2004). Thus, HCAP is sepa rate from Ohio's Medicaid plan and cannot be factored into the Medicare DSH.

b. As the court of appeals also correctly held, char ity care provided under HCAP would not qualify for inclusion in the Medicare DSH calculation for the addi tional reason that HCAP patients are not "eligible for medical assistance" under Medicaid. Although the Med icare statute does not define "medical assistance," the Medicaid statute defines it as "payment of part or all of the cost" of medical "care and services" to certain cate gories of individuals who lack the resources to pay for their care. 42 U.S.C. 1396d(a). "The substantial relation between [Medicare and Medicaid] presents a classic case for application of the normal rule of statutory construc tion that identical words used in different parts of the [Social Security Act] are intended to have the same meaning." Sullivan v. Stroop, 496 U.S. 478, 484 (1990) (internal quotation marks and citation omitted). That conclusion is bolstered by the Medicare DSH's explicit reference to the Medicaid statute. See Cabell Hunting ton Hosp., Inc. v. Shalala, 101 F.3d 984, 987 n.1 (4th Cir. 1996) (Cabell) (looking "to the Medicaid statute for guid ance on the meaning of ['medical assistance'] in the [Medicare DSH]"). Accordingly, the Medicare DSH's reference to "medical assistance" carries the same meaning as it does in the Medicaid statute.

The Medicare DSH therefore accounts only for medi cal care and services provided to individuals eligible for Medicaid. Care under HCAP, however, is not provided to patients eligible for Medicaid. HCAP care is thus immaterial for purposes of the Medicare DSH computa tion at issue in this case.

2. Petitioners contend (Pet. 14-26) that the decision below conflicts with decisions from the Fourth, Sixth, Eighth, and Ninth Circuits. That contention is incor rect.

The decision below does not conflict with any of the four decisions cited by petitioners because those cases concerned a different question than the one at issue here. In those cases, hospitals had provided care pursu ant to state Medicaid plans, but the plans imposed cer tain limits on payment. The hospitals argued that unre imbursed services should nonetheless be counted in the Medicare DSH. In Cabell, for instance, West Virginia's Medicaid plan "provide[d] for a maximum of twenty-five paid hospital days," 101 F.3d at 987, and the question for the court was whether the Medicare DSH "should take account of only those inpatient hospital days which are actually paid by West Virginia's Medicaid program," or "should include all the days of patients who otherwise qualify for Medicaid but who may have exceeded the number of days covered under the state Medicaid plan," id. at 986-987.3

All four decisions concluded that the Medicare DSH included patient days attributable to patients who were eligible for Medicaid, regardless whether Medicaid actu ally paid for those days. See Cabell, 101 F.3d at 989 ("It is apparent that 'eligible for medical assistance under a State plan' refers to patients who meet the * * * quali fications specified by a particular state's Medicaid plan, whether or not they are actually receiving payment."); Legacy Emanuel Hosp. & Health Ctr. v. Shalala, 97 F.3d 1261, 1265 (9th Cir. 1996) ("[T]he [Medicare DSH] includes all patient days for which a person was eligible for Medicaid benefits, whether or not Medicaid actually paid for those days of service."); Jewish Hosp., Inc. v. Secretary of HHS, 19 F.3d 270, 274 (6th Cir. 1994) ("Thus, it appears that all days for which an individual is capable of receiving Medicaid should be figured into the [Medicare DSH]."); Deaconess Health Servs. Corp. v. Shalala, 912 F. Supp. 438, 447 (D. Mo. 1995) (mem.) ("If a person generally is eligible for medical assistance under a state plan approved by Medicaid * * * , then all of the days during which such services were received during such eligibility should be included in the [Medi care DSH], whether or not the state Medicaid plan pays for all such days."), aff'd, 83 F.3d 1041 (8th Cir. 1996) (per curiam).

Importantly, there was no dispute in those cases that the hospitals were providing services to patients who were eligible for the "medical assistance" provided by the Medicaid program, even though limits had been reached for particular services. By contrast, patients covered by HCAP are not eligible under Medicaid. As the court of appeals concluded, HCAP is not part of Ohio's Medicaid plan, and HCAP patients do not receive "medical assistance." No court of appeals has ruled to the contrary on either of those questions. The court of appeals thus had no need to reach the question present ed in Cabell, Legacy Emanuel, Jewish Hospital, or Dea coness Health-i.e., whether the Medicare DSH in cludes all services that a hospital provides to Medicaid- eligible individuals, or only those services that are paid for.4 Accordingly, there is no conflict warranting this Court's review.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.

EDWIN S. KNEEDLER
Acting Solicitor General
MICHAEL F. HERTZ
Acting Assistant Attorney
General
ANTHONY J. STEINMEYER
AUGUST E. FLENTJE
Attorneys

MARCH 2009

1 Subsequent references to the "Medicaid fraction" or the "Medicare DSH" are thus references to the numerator of the Medicaid fraction.

2 However, Medicaid has its own disproportionate share hospital adjustment (Medicaid DSH) that gives States broad leeway in imple menting the adjustment. 42 U.S.C. 1396r-4. In calculating the adjust ment, States may consider, among other things, the "costs, volume, or proportion of services provided * * * to low-income patients," in cluding charity care patients. 42 U.S.C. 1396r-4(c)(3)(B). In calculating Medicaid DSH payments, Ohio includes charity care provided under HCAP. Ohio Rev. Code Ann. § 5112.08(B)(2) (LexisNexis 2004).

3 See Legacy Emanuel Hosp. & Health Ctr. v. Shalala, 97 F.3d 1261, 1263 (9th Cir. 1996) (noting that Oregon "limit[s] the number of days that the state plan provides for inpatient care"); Jewish Hosp., Inc. v. Secretary, Dep't of HHS, 791 F. Supp. 168, 169 (W.D. Ky. 1992) (mem.) (noting that the plaintiff hospital argued that "it [was] entitled to reimbursement * * * for the hospital stay of all Medicaid patients, even though these patients were not reimbursed for Medicaid for all of their stay"), rev'd, 19 F.3d 270 (6th Cir. 1994); Deaconess Health Servs. Corp. v. Shalala, 912 F. Supp. 438, 443 (D. Mo. 1995) (mem.) (noting that certain hospitals in Missouri "are subject to specified length-of- stay payment limits"), aff'd, 83 F.3d 1041 (8th Cir. 1996) (per curiam).

4 Petitioners are thus incorrect in asserting (Pet. 13) that had this case "been decided in the Fourth, Sixth, Eighth, or Ninth Circuits, * * * those circuit courts would not have excluded HCAP patient days from the calculation of Petitioners' Medicare DSH adjustments." As stated, those decisions relied on the fact that the patients at issue were Medicaid-eligible. That circumstance is not present here.