Adventist GlenOaks Hosp. v. Sebelius, No. 10-3460 (7th Cir. 2011)
Annotate this CaseMedicare Part A reimburses hospitals according to a Prospective Payment System (42 U.S.C. 1395ww(d), which uses a predetermined formula to calculate reimbursement for each patient discharge without regard to the actual cost incurred. The formula includes the average hourly wage of the employees in the geographic region, including paid lunch hours. Hospitals objected to the practice because some hospitals give paid lunch breaks, which depresses the average area hourly wage and, in turn, their Medicare reimbursements. The district court granted summary judgment for the government. The Seventh Circuit affirmed, reasoning that counting all paid hours, for the sake of administrative simplicity, is not arbitrary.
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