United States Court of Appeals

For the Eighth Circuit

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No. 15-1946

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Southeast Arkansas Hospice, Inc.

lllllllllllllllllllll Plaintiff - Appellant

v.

Sylvia Burwell, Department of Health and Human Services

lllllllllllllllllllll Defendant - Appellee

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Appeal from United States District Court 

for the Eastern District of Arkansas - Helena

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 Submitted: January 14, 2016

 Filed: March 10, 2016

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Before MURPHY, SMITH, and BENTON, Circuit Judges.

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BENTON, Circuit Judge.

Southeast Arkansas Hospice, Inc. (SEARK) operates two hospice-care

facilities. SEARK voluntarily entered into a provider agreement with the Secretary

of Health and Human Services to receive Medicare reimbursement. See 42 U.S.C.

§§ 1395c, 1395f(a)(7), 1395cc. SEARK agreed “to conform to the provisions of

section 1866 of the Social Security Act and applicable provisions in 42 CFR.” The

Act annually caps Medicare reimbursement. § 1395f(i)(2)(A). Any payment above
the statutory cap must be refunded to the Medicare program. See 42 C.F.R.

§ 418.308(d). After notice, a provider may terminate its agreement with the

Secretary. 42 U.S.C. § 1395cc(b)(1). As a provider, SEARK can discharge a

hospice patient if the patient moves out of the service area, is no longer terminally ill,

or becomes so disruptive as to interfere with SEARK’s ability to provide care. 42

C.F.R § 418.26(a). However, SEARK cannot “discontinue the hospice care it

provides with respect to a patient because of the inability of the patient to pay for

such care.” 42 U.S.C. § 1395x(dd)(2)(D). 

Invoking the reimbursement cap, the Secretary sent SEARK seven demands

for repayment. SEARK sued, arguing the cap violatesthe Takings Clause ofthe Fifth

Amendment. On a motion for summary judgment, the district court concluded

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SEARK’s voluntary participation in the Medicare programprecludes a takings claim. 

Having jurisdiction under 28 U.S.C. § 1291, this court affirms. 

This court reviews de novo the grant ofsummary judgment. Torgerson v. City

of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). The Fifth Amendment

prohibits the taking of private property “for public use, without just compensation.”

“[W]hile property may be regulated to a certain extent, if regulation goes too far it

will be recognized as a taking.” Pennsylvania Coal Co. v. Mahon, 260 U.S. 393, 415

(1922). The Supreme Court considers three factors to distinguish regulation from a

regulatory taking: “the character of the governmental action, its economic impact,

and its interference with reasonable investment-backed expectations.” Ruckelshaus

v. Monsanto Co., 467 U.S. 986, 1006 (1984), quoting PruneYard Shopping Center

v. Robins, 447 U.S. 74, 83 (1980). 

The Honorable Kristine G. Baker, United States District Judge for the

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Eastern District of Arkansas.

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SEARK has not met its burden to prove the demands for repayment based on

the statutory cap are a taking. First, the reimbursement cap allocates the

government’s capacity to subsidize healthcare. See H.R. Rep. 98-333, at 1 (1983),

reprinted in 1983 U.S.C.C.A.N. 1043, 1043-44 (“The intent of the cap was to ensure

that payments for hospice care would not exceed what would have been expended by

Medicare if the patient had been treated in a conventionalsetting.”). Second, SEARK

presented no evidence to suggest the cap makes it impossible “to profitably engage

in their business.” Keystone Bituminous Coal Ass’n v. DeBenedictis, 480 U.S. 470,

485 (1987). See also Minnesota Ass’n of Health Care Facilities, Inc. v. Minnesota

Dep’t of Public Welfare, 742 F.2d 442, 446 (8th Cir. 1984) (rejecting an argument

that “businessrealities” prevent a nursing home fromleaving the Medicaid program).

Third, SEARK voluntarily chose to participate in the Medicare hospice

program. “This voluntariness forecloses the possibility that the statute could result

in an imposed taking of private property which would give rise to the constitutional

right of just compensation. . . .” Minnesota Ass’n of Health Care Facilities, Inc.,

742 F.2d at 446. Compare Ruckelshaus, 467 U.S. at 1007 (“[A]s long as Monsanto

is aware of the conditions under which the data are submitted, and the conditions are

rationally related to a legitimate Government interest, a voluntary submission of data

by an applicant in exchange for the economic advantages of a registration can hardly

be called a taking.”), with Horne v. Dep’t of Agriculture, 135 S. Ct. 2419, 2430

(2015) (“The taking here cannot reasonably be characterized as part of a similar

voluntary exchange.”). 

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The judgment is affirmed.

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