NAZARETH HOSPITAL et al v. SEBELIUS

Filing 40

MEMORANDUM AND/OR OPINION ORDER THAT THE SECRETARY SHALL MAKE FINDINGS AND CONCLUSIONS AND RETURN THE REMANDED DECISION BY 9/14/2012, ETC. SIGNED BY HONORABLE EDMUND V. LUDWIG ON 7/11/2012; 7/12/2012 ENTERED AND COPIES E-MAILED.(tomg, )

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

NAZARETH HOSPITAL and
ST. AGNES MEDICAL CENTER

v.

CIVIL ACTION

FILED
JUL 1:2 2012

MICHAEL E: KUNZ, Clerk
KATHLEEN SEBELlUS, Secretary
By
. Oap.Clerk
Department of Health and Human Services

No. ~6

lb' 3~\3

MEMORANDUM-ORDER
AND NOW, this 11 th day oOuly, 2012, upon oral argument and submission of briefs
on cross-motions for summary judgment, the Secretary's non-payment of inpatient hospital
scrvices c1aimcd by plaintiffs Nazareth Hospital and S1. Agncs Medical Center is remanded.
Jurisdiction is § 139500(1)( 1) and 28 U.S.C. § 1331.
Within 60 days, the Secretary shall considcr whether the agency's rule-making and
procedures for Medicare's "disproportionate patient percentage" and Section 1115
demonstration projects violate the rights of Pennsylvania hospitals arbitrarily and
capriciously - and without a rational basis. 1 See 42 U.S.C. S§ 1395ww(d)(5)(vi)(I1),
1315(aX2)(A); 42 C.F.R. § 412.1 06(b)( 4)(ii) (2002).
The Secretary may hold an evidentiary hearing, including consideration of the
toIIowing for FY ending December 31, 2002:

I In FYE December 31, 2002, Pennsylvania did not have a Section 1115 waiver for inpatient
hospital services. The underpayments in dispute are ca. Nazareth $249,762 and StAgnes $606,337,
plus the possibility ofmonumental costs for the government. The basic conflict here is whether the
federal government or the states should bear the ultimate expense ofpaying for health care for those
unable to do so. The amount of resources put into this litigation has been deplorably humongous.
No effort appears to have been made to resolve the issues.

1

•

How were plaintiff hospitals compensated for inpatient services
Pennsylvania's General Assistance program in FY 2002?

•

Were GA inpaticnts in Pennsylvania hospitals the same or different from
hospital inpatient populations in other states via a Section 1115 demonstration
project, and, if so, how?

•

Were costs of inpatient hospital services arising from Pennsylvania's GA
program the same or different from those incurred in Section 1115
demonstration projects in other states?

•

Most importantly, the Secretary shall marshal and apply the evidence that
supports the Secretary's decision.

In

The Secretary shall make findings and conclusions and return the remanded decision
by September 14, 2012.
• By July 20, 2012, the parties shall seriously consider alternative dispute resolution
and notifY the Court if willing to proceed with this possibility.

2