Bethesda Health, Inc. v. Azar, No. 19-5260 (D.C. Cir. 2020)Annotate this Case
Hospitals, in calculating their Medicaid fractions -- the proportion of treatment a hospital provided to Medicaid patients -- sought to include days of care funded by Florida's Low Income Pool, an approved Medicaid demonstration project. The Secretary refused to allow the Hospitals to include these patients in their Medicaid fraction, on the ground that the patients were treated out of charity rather than as designated beneficiaries of a demonstration project.
The DC Circuit affirmed the district court's judgment in favor of the Hospitals, and agreed with the district court that the Secretary's own regulation states that, for the purposes of calculating the Medicaid fraction, "hospitals may include all days attributable to populations eligible for [Medicaid] matching payments through a [demonstration project]" so long as the services provided under the demonstration project include "inpatient hospital services." In this case, it was "obvious to the [c]ourt that uninsured and underinsured patients received inpatient hospital services" through the Low Income Pool, because (1) the Secretary authorized federal matching funds to reimburse hospitals for these services, and (2) the hospitals rigorously documented the services provided using funds from the Pool. Furthermore, the Fifth Circuit's opinion in Forrest Gen. Hosp. v. Azar, 926 F.3d 221 (2019), supported this conclusion.