United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued March 18, 2008 Decided May 30, 2008
No. 07-5273
ADENA REGIONAL MEDICAL CENTER, ET AL.
APPELLEES
v.
MICHAEL O. LEAVITT, SECRETARY, DEPARTMENT OF HEALTH
& HUMAN SERVICES,
APPELLANT
Appeal from the United States District Court
for the District of Columbia
(No. 05cv02422)
August E. Flentje, Attorney, U.S. Department of Justice,
argued the cause for appellant. With him on the briefs were
Jeffrey S. Bucholtz, Acting Assistant Attorney General, Jeffrey
A. Taylor, U.S. Attorney, and Anthony J. Steinmeyer, Attorney,
U.S. Department of Justice. R. Craig Lawrence, Assistant U.S.
Attorney, and Megan L. Rose, Attorney, U.S. Attorney’s Office,
entered appearances.
Murray J. Klein argued the cause and filed the brief for
appellees.
Before: SENTELLE, Chief Judge, and GINSBURG and
BROWN, Circuit Judges.
2
Opinion for the Court filed by Circuit Judge GINSBURG.*
GINSBURG, Circuit Judge: The Ohio Hospital Care
Assurance Program (HCAP) ensures that indigent Ohioans who
“are not recipients of the medical assistance program,” i.e., the
Ohio Medicaid plan, nonetheless receive “basic, medically
necessary hospital-level services” at no charge. OHIO REV.
CODE § 5112.17(B); see Title XIX [Medicaid] of the Social
Security Act, 42 U.S.C. § 1396 et seq. The state of Ohio does
not reimburse hospitals for the cost of providing such mandatory
charity care.
Seeking indirectly to cover some of their HCAP expenses,
the 25 plaintiff-appellee hospitals took the position that the
Secretary of Health and Human Services should include
beneficiaries of the HCAP in calculating the monies the Hospi-
tals are due under the Medicare program for the elderly and the
disabled. See Title XVIII [Medicare] of the Act, 42 U.S.C.
§ 1395 et seq. The Secretary disagreed but the Hospitals
successfully challenged his decision in the district court. 524
F. Supp. 2d 1 (2007). We now reverse that judgment.
I. Background
Under the Medicare statute, the Secretary generally pays
hospitals a sum for each covered inpatient service without
regard to the hospital’s actual cost. See 42 U.S.C. § 1395ww(d).
In 1983, however, the Congress determined any hospital that
serves a disproportionately large percentage of low-income
patients -- known as a disproportionate share hospital (DSH) --
should be reimbursed at a higher rate, apparently because the
*
Circuit Judge BROWN concurs in the opinion of the Court
except as to Part II.A.
3
more low-income patients a hospital treats, the more it costs on
average to care for Medicare patients. See Cabell Huntington
Hosp., Inc. v. Shalala, 101 F.3d 984, 985 (4th Cir. 1996)
(“low-income Medicare patients have generally poorer health
and are costlier to treat than high-income Medicare patients”).
The Congress further determined the number of low-income
patients each hospital treats should be measured indirectly by
reference to the number of its patients “eligible for medical
assistance under a State plan approved under [Title] XIX” of the
Act, i.e., Medicaid, “but ... not entitled to benefits under
[Medicare],” 42 U.S.C. § 1395ww(d)(5)(F)(vi)(II). Put simply,
the more a hospital treats patients who are “eligible for medical
assistance under a State plan approved under [Medicaid],” the
more money it receives for each patient covered by Medicare.
II. Analysis
The question before us is whether HCAP patients are
“eligible for medical assistance under a State plan approved
under [Medicaid].” If so, then the Secretary miscalculated the
DSH adjustments the Hospitals should have received under
Medicare. We conclude for two reasons that the Secretary was
correct, and accordingly was entitled to summary judgment:
First, the HCAP provision that requires hospitals to care for
indigent patients, § 5112.17(B), is not part of the Ohio “State
plan approved under [Medicaid]” and, second, HCAP patients
are not “eligible for medical assistance” within the meaning of
that term in the Medicare DSH provision. We reach these
conclusions based not upon any deference to the Secretary’s
interpretation but upon our own reading of the Social Security
Act. See Chevron U.S.A. Inc. v. Natural Res. Def. Council, Inc.,
467 U.S. 837, 842-43 (1984) (if the “Congress has directly
spoken to the precise question at issue,” then “that is the end of
the matter”).
4
A. HCAP Provision Is Not Part of Medicaid Approved Plan
Contrary to the Hospitals’ argument, § 5112.17(B) is clearly
not part of a “State plan approved under [Medicaid]” because an
approved state Medicaid plan -- as the Hospitals acknowledge
in their brief -- must pay providers for the care of eligible
patients. See 42 U.S.C. §§ 1396a-1396b; see also § 1396d(a),
(b). Section 5112.17(B) of the HCAP, however, requires the
Hospitals to care for indigent patients without payment. See
also OHIO ADMIN. CODE 5101:3-2-07.17. By its terms,
moreover, § 5112.17(B) requires hospitals to care for patients
only if they “are not recipients of the medical assistance pro-
gram,” that is, Medicaid. See OHIO REV. CODE § 5112.01
(defining “medical assistance program” as “the program of
medical assistance established under section 5111.01 of the
Revised Code and Title XIX [Medicaid] of the ‘Social Security
Act’”); see also § 5112.17(C) (hospital may “requir[e] an
individual to apply for eligibility under the medical assistance
program [Medicaid] before ... process[ing] an application under”
§ 5112.17). It is clear, therefore, that under Ohio law HCAP
patients do not receive care pursuant to the Medicaid plan and,
consequently, that HCAP patients are not eligible for care
“under a State plan approved under subchapter XIX [Medicaid]”
within the meaning of the Medicare statute, 42 U.S.C. §
1395ww(d)(5)(F)(vi)(II).
The Hospitals point out that the Secretary approved certain
modifications to the Ohio regulation implementing § 5112.17(B)
as an amendment to Ohio’s Medicaid plan. True enough; see
OHIO ADMIN. CODE 5101:3-2-07.17, approved by the Secretary
April 6, 2001. Accordingly, the Hospitals maintain, the regula-
tion must be part of the Ohio Medicaid plan: Why else would
the Secretary have approved the regulation as an amendment to
that plan?
5
The answer is not far to seek. The federal Medicaid statute
contains its own DSH provision, which requires each state
“specifically [to] define[]” eligibility for DSH adjustments in the
state Medicaid plan and to “provide[] ... for an appropriate
increase in the rate or amount of payment” eligible hospitals
receive. See 42 U.S.C. § 1396r-4(a)(1).* Ohio acted pursuant to
that provision to determine DSH adjustments in its Medicaid
program by reference to a hospital’s compliance with the
requirement, set out in Rule 5101:3-2-07.17, that a hospital
provide charity care under the HCAP. See, e.g., OHIO ADMIN.
CODE 5101:3-2-09(K)(5)(c) (hospitals are not eligible for
Medicaid DSH adjustments if they do not provide charity care
under the HCAP). Thus the regulation, which determines the
eligibility of patients for such charity care, indirectly also
determines the Hospitals’ eligibility for and amount of DSH
adjustments under the Ohio Medicaid plan. Federal law obliged
Ohio to submit the regulation to the Secretary for approval
because the mechanism for providing a DSH adjustment under
Medicaid is part of Ohio’s Medicaid plan, and the Secretary
must approve that plan, see 42 U.S.C. § 1396r-4(a) (state plan
does not satisfy requirement of § 1396a(a)(13)(A) unless state
has submitted to Secretary methodology for making DSH
adjustments); § 1396a(b) (“The Secretary shall approve any plan
which fulfills the conditions specified in” § 1396a(a)); see also
§ 1396r-4(a)(3) (governing approval by Secretary of amend-
ments made under § 1396r-4). The Secretary’s approval of Rule
5101:3-2-07.17 does not suggest in any way that HCAP patients
receive care pursuant to the Ohio Medicaid plan.**
*
The Medicare DSH provision, in contrast, does not defer to
the states on those questions. See § 1395ww(d)(5)(F).
**
At oral argument the hospitals suggested § 5112.17(B) of the
Ohio Code is part of the Medicaid plan because “their [Medicaid
DSH] payments will increase if they’re treating more HCAP patients
6
B. HCAP Patients Are Not Eligible for “Medical Assistance”
As we noted at the outset, in order to prevail the Hospitals
must demonstrate that patients who obtain charity care under the
HCAP are “eligible for medical assistance under a State plan
approved under [Medicaid]” within the meaning of that phrase
in the Medicare statute, 42 U.S.C. § 1395ww(d)(5)(F)(vi)(II).
As explained below, we conclude that the term “medical
assistance,” which is not defined in Title XVIII of the Act, has
the same meaning in the Medicare DSH provision of Title XVIII
as it has in the federal Medicaid statute, Title XIX of the Act; as
a result, the Hospitals’ case would fail even if HCAP patients
did obtain care under the Ohio Medicaid plan for, as the
Government points out, the federal Medicaid statute defines
“medical assistance” as “payment of part or all of the cost” of
medical “care and services” for a defined set of individuals,
§ 1396d(a), whereas the HCAP does not entail any payment.
First, we note the Medicare DSH provision in Title XVIII
of the Act expressly refers to the Medicaid statute (as Title XIX
of the Act), § 1395ww(d)(5)(F)(vi)(II), and the same phrase --
“medical assistance under a State plan approved under
and ... will decrease if they’re treating less [sic] HCAP patients.” The
suggestion reflects a misunderstanding of the rationale for DSH
adjustments. Hospitals in Ohio receive more DSH funds under the
Medicaid plan the more HCAP patients they treat not because those
patients receive care under the Medicaid plan, but because Ohio law
treats such patients as a proxy for low-income patients, just as the
Medicare provision treats Medicaid patients as a proxy for low-income
patients. Thus, the Ohio Medicaid plan provides a hospital more
money for Medicaid patients the more HCAP patients it treats, just as
the federal Medicare statute provides a hospital more money for
Medicare patients the more Medicaid patients it treats, Cabell
Huntington Hosp., Inc., 101 F.3d at 985.
7
[Medicaid]” -- appears throughout the Act.* As the Supreme
Court has instructed on countless occasions, we are to presume
“identical words used in different parts of the same act are
intended to have the same meaning.” Atl. Cleaners & Dyers,
Inc. v. United States, 286 U.S. 427, 433 (1932); see also Sullivan
v. Stroop, 496 U.S. 478, 484 (1990) (applying canon where
“cross-references” indicate two administrative programs within
Social Security Act “operate together”).
Second, and perhaps more probative, the Medicaid DSH
provision permits the states to adjust DSH payments “under a
methodology that” considers either “patients eligible for medical
assistance under a State plan approved under [Medicaid] or ...
low-income patients,” 42 U.S.C. § 1396r-4(c)(3)(B), such as
those served under the HCAP. The Medicaid and Medicare
DSH provisions serve the same purpose -- to adjust payments to
hospitals that serve a disproportionate share of poor patients --
and in doing so each refers to patients “eligible for medical
assistance under a State plan approved under” the Medicaid title
of the Act. Id.; § 1395ww(d)(5)(F)(vi)(II). It stands to reason
the Congress intended the quoted phrase to have the same
meaning in the two provisions.
We thus conclude HCAP patients do not obtain, and are not
eligible for, “medical assistance” within the meaning of the
Medicare DSH provision, wherefore the Hospitals’ case must
fail. As the Fourth Circuit has noted, “[i]f Congress had wanted
‘medical assistance’ to take on a completely different meaning”
in the Medicare DSH provision in Title XVIII than it has in the
Medicaid statute, Title XIX, then the “Congress could easily
have so indicated.” Cabell Huntington Hosp., Inc., 101 F.3d at
990.
*
See, e.g., 42 U.S.C. §§ 1320a-7b(a)(6), 1382h(b)(3),
1396a(a)(10)(E), 1396n(i)(1).
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III. Conclusion
In sum, we conclude the HCAP provision requiring the
Hospitals to care for indigent patients is not part of the Ohio
“State plan approved under [Medicaid]” and the indigent
patients covered by the HCAP provision are not “eligible for
medical assistance” within the meaning of the Medicare statute,
42 U.S.C. § 1395ww(d)(5)(F)(vi)(II).* Therefore, the judgment
of the district court is
Reversed.
*
The Hospitals’ other arguments are sufficiently lacking in
merit as not to warrant consideration in a published opinion.