Baptist Memorial Hospital - Golden Triangle, Inc. v. Azar, No. 18-60592 (5th Cir. 2020)
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In this case, the parties dispute the proper method for calculating the hospital specific limit for annual DSH payments. The Hospitals filed suit challenging the 2017 final rule clarifying that hospitals' "costs incurred" are net of payments from third parties, liked Medicare and private insurers. The Hospitals contend that the Secretary's definition of "costs incurred" conflicted with the Medicaid Act, 5 U.S.C. 706(2)(C).
The Fifth Circuit reversed the district court's grant of summary judgment for the Hospitals, and joined three other circuits in holding that the 2017 rule was consistent with the Medicare Act. The court could not agree with the Hospitals that the ordinary meaning and dictionary definitions of "costs" and "payments" rendered the disputed language unambiguous; the court was unpersuaded by the Hospitals' argument that the statute draws a "clear line" between costs and payments; the court rejected the Hospitals' contention that Congress, by expressly excluding payments from Medicaid and the uninsured, meant to exclude only those payments and no others; the court rejected the Hospitals' argument that the express exclusion of third-party payments in a related Medicaid provision indicates that Congress chose not to deduct third-party payments in 42 U.S.C. 1396r-4(g)(1)(A); and the court saw no basis for the Hospitals' argument that the 2017 Rule conflicts with the statutory purpose of the hospital-specific limit. Accordingly, the court remanded for further proceedings.
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