# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 5- 19 46

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So ut he as t Ark an sa s Ho sp ic e, In c.

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.
Sy lv ia Bu rwel l, Dep art m en t o f Heal th an d Hu m an Serv ic es

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of Ark an sa s - Hel en a

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Su bm it te d: Jan ua ry

14 , 20 16 Fil ed : M arch 10 , 20 16

__ __ __ __ __ __ Befo re MUR PHY, SMITH, an d B ENTON, Ci rcu it Ju dg es

.

__ __ __ __ __ __ BENTON, Circu it Ju dg e.

So ut he as t Ark an sa s Hos pi ce, In c. (SEARK) op erat es two ho sp ic e-ca re faci li ti es

. SEARK vo lu nt ari ly en te red in to a pr ov id er agre em en t with th e Secr et ary of Heal th an d Hum an Serv ic es to rece iv e Med ic are rei m bu rs em en t. Se e 42 U.S.C. §§ 13 95 c , 13 95 f(a )(7 )
, 13 95 cc

. SEARK ag reed “ to co nf or m to th e pr ov i s io ns of

se ct io n 18 66 of th e So ci al Secu rit y Act an d a pp li cab le pr ov is io ns in 42 CFR.” The
Act an nu al ly cap s Med ic are rei m bu rs em en t. § 13 95 f(i )(2 )(A)

. Any pa y m en t ab ov eth e st at ut or y cap m us t be refu nd ed to th e Med ic are pr og ram

. Se e 42 C.F.R. § 41 8.3 08 (d)

. Afte r no ti ce, a pr ov id er m ay t e r mi n at e it s ag reem en t wit h th e S ecre ta ry

. 42 U.S.C. § 13 95 cc(b )(1 )

. As a pr ov id er, SEARK can di s c h a r g e a ho sp ic e pa ti en t if th e pa ti en t m ov es ou t of th e se rv ic e area , is no lo ng er te rm in al ly il l,

or be co m es so di sr up ti ve as to in te rfer e w i t h S EA R K ’s ab il it y to pr ov id e care

. 42
C.F.R § 41 8.2 6( a)

. Howev er, SEARK can n ot “ di sc on ti nu e th e ho sp ic e care it

pr ov id es wit h res pe ct to a pa ti en t be cau se of th e in ab il it y o f t h e p a t i en t to pa y fo r

su ch care .” 42 U.S.C. § 13 95 x( dd)( 2) (D)

.

In vo ki ng th e rei m

bu rs em en t cap , t he Secr et ary se nt SEARK se ve n d em an ds fo r rep ay m en t. SEARK su ed
, arg ui ng th e cap vi ol at es th e Tak in gs Cl au se of th e Fi fth
Am en dm en t. On a m ot io n fo r su m m ary jud gm en t, th e di st ric t co ur t co nc lu de d 1
SEARK’s vo lu nt ary pa rti ci pa ti on in th e Med ic are pr og ram pr ecl ud es a ta ki ng s cl ai m

. Hav in g ju ris di ct io n u nd er 2 8 U.S.C. § 12 91 , th is co ur t af fir m s.

Thi s co ur t rev ie ws de no vo th e gr an t of su m m ary jud gm en t. Tor

ge rs on v. Ci ty of Ro ches te r , 64 3 F.3 d 10 31
, 10 42 (8 th Ci r. 20 11 ) (en ba nc ). The Fi fth Am en dm en t
pr oh ib it s th e ta ki ng of pr iv at e pr op ert y “ fo r pu bl ic us e, wit ho ut jus t co m pe ns at io n.”

“ [W] hi le pr op ert y m ay be reg ul at ed to a cert ai n ex te nt , if reg ul at io n go es to o f ar it wil l be reco gn iz ed as a ta ki ng .” Penns yl va ni a Co al Co

. v. Ma ho n , 26 0 U.S. 39 3, 41 5 (1 92 2)

. The Su pr em e Co ur t con si de rs th ree fact or s to di st in gu is h reg ul at io n fro m a
reg ul at or y ta ki ng : “ th e ch arac t e r o f th e go ve rn m en ta l act io n, it s eco no m ic im pa ct ,
an d it s in te rfer en ce wit h reas on ab le in ve st m en t-b ack ed ex pe ct at io ns .” Ruck el sh au s

v. Mo ns an to Co

. , 46 7 U.S. 98 6, 10 06 (1 98 4)
, qu ot in g Prun eY ar d Sho pp in g Cent er v. Ro bi ns , 44 7 U.S. 7 4, 8 3 (1 98 0)

.

The Hon or ab le Kris ti ne G. Bak er, Uni te d St at es Dis tri ct Ju dg e fo r th e 1 East ern Dis tri ct of Ark an sa s.

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-SEARK ha s no t m et it s bu rd en to pr ov e th e de m an ds fo r rep ay m en t bas ed on

th e st at ut or y cap are a ta ki ng

. Fi rs t, th e rei m bu rs em en t cap al lo cat es th e
go ve rn m en t’s ca pa ci ty to s ub si di ze h eal th care

. Se e H.R. Rep. 98 -3 33 , at 1 (1 98 3)
,
re pr in te d in 19 83 U.S.C.C.A.N. 10 43
, 10 43 -4 4 (“ The in te nt of th e cap was to en su re th at pa y m en ts fo r ho sp ic e care wou ld no t ex ceed wha t wou ld ha ve be en ex pe nd ed by Med ic are if th e pa ti en t ha d be en tre at ed in a co nv en ti on al se tt in g.” ). Seco nd
, SEARK
pr es en te d n o e vi de nc e to su gg es t t he cap m ak es it im po ss ib le “ to pro fit ab ly en ga ge in th ei r bu si ne ss .” Key st

on e Bi tu m in ou s Co al As s’ n v. DeBen ed ic ti s , 48 0 U.S. 47 0,
48 5 (1 98 7)

. Se e al

so Mi nnes ot

a As s’ n of

Hea lt h Ca re Fa ci li ti es

, In c. v. Mi nnes ot

a Dep ’t of Publ

ic Wel fa re , 7 42 F.2 d 44 2, 44 6 (8 th Cir . 1 98 4) (rejec ti ng an arg um en t th at “ bu si ne ss real it ie s” pr ev en t a nu rs in g ho m e fro m le av in g th e Med ic ai d pr og ram ).

Thi rd
, SEARK vo lu nt ari ly ch os e to pa rti ci pa te in th e Med ic a r e ho sp ic e
pr og ram . “ Thi s v ol un ta rin es s fo recl os es th e p os si bi li ty tha t t he st at ut e co ul d res ul t in an im po se d ta ki ng of pr iv at e pr op ert y whi ch wou ld gi ve ris e to th e co ns ti tu ti on al rig ht of jus t co m

pe n s a t i o n

. . . .” Mi nnes ot a As s’ n of Hea lt

h Ca re Fa ci li ti es

, I nc. , 74 2 F.2 d at 44 6. Co mpa re Ruck el sh au s , 46 7 U.S. at 10 07 (“ [A]s lo ng as Mo ns an to is aware of th e co nd it io ns un de r whi ch th e da ta are su bm it te d, an d th e co nd it io ns are
rat io na ll y rel at ed to a le gi ti m at e Gov ern m en t in te res t, a vo lu nt ary su bm is si on of da ta by an ap pl ic an t in ex ch an ge fo r th e eco no m ic ad va nt ag es of a reg is tra ti on can ha rd ly be cal le d a ta ki ng .”), wi th Ho rn e v. Dep ’t of Ag ri cul tu re , 13 5 S. Ct

. 24 19
, 24 30 (2 01 5) (“ The ta ki ng he re can no t re a s o n a b l y b e ch arac te riz ed as pa rt of a si m il ar

vo lu nt ary ex ch an ge .”).

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The jud gm en t i s af

fir m ed

.

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