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Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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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.

USCA Case #07-5273 Document #1118774 Filed: 05/30/2008 Page 1 of 8
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* Circuit Judge BROWN concurs in the opinion of the Court

except as to Part II.A.

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 Hospitals 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

USCA Case #07-5273 Document #1118774 Filed: 05/30/2008 Page 2 of 8
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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”).

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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 program,” 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 regulation must be part of the Ohio Medicaid plan: Why else would

the Secretary have approved the regulation as an amendment to

that plan?

USCA Case #07-5273 Document #1118774 Filed: 05/30/2008 Page 4 of 8
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* 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

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 amendments 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.**

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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.

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

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* See, e.g., 42 U.S.C. §§ 1320a-7b(a)(6), 1382h(b)(3),

1396a(a)(10)(E), 1396n(i)(1). 

[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.

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* The Hospitals’ other arguments are sufficiently lacking in

merit as not to warrant consideration in a published opinion.

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.

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