Opinion ID: 450407
Heading Depth: 1
Heading Rank: 4

Heading: medicare act compliance

Text: 24 Appellee argues in the alternative that even if the Secretary's 1969 repeal was consistent with the procedural requirements of the APA, withdrawal of the two-percent allowance for nonproprietary providers violated the regulatory mandate of the Medicare Act. Baylor has not convinced us that the Medicare Act forbade the Secretary from repealing the two percent allowance. The party challenging agency rulemaking bears the burden of persuasion with regard to a rule's substantive invalidity. 17 In construing the propriety of an agency's regulatory action, our interpretation of the enabling legislation is qualified in the first instance by deference to the interpretation of the agency charged with administering the statute. Blum v. Bacon, 457 U.S. 132, 102 S.Ct. 2355, 2361, 72 L.Ed.2d 728 (1982); Batterton v. Francis, 432 U.S. 416, 423-25, 97 S.Ct. 2399, 2404-05, 53 L.Ed.2d 448 (1977). The Secretary's regulations will be sustained as long as they are reasonably related to the purposes of the enabling legislation. Mourning v. Family Publications Service, Inc., 411 U.S. 356, 369, 93 S.Ct. 1652, 1661, 36 L.Ed.2d 318 (1973); Sun Towers, Inc. v. Heckler, 725 F.2d 315, 325 (5th Cir.), cert. denied, --- U.S. ----, 105 S.Ct. 100, 83 L.Ed.2d 45 (1984). Of course, this deference must nevertheless yield where our analysis produces a contrary meaning of the statute as revealed through its plain language, purpose, and history. Southeastern Community College v. Davis, 442 U.S. 397, 411, 99 S.Ct. 2361, 2369, 60 L.Ed.2d 980 (1979). 25 The thrust of Baylor's argument is that the provision for reasonable cost allowance contained in 42 U.S.C. Sec. 1395x(v)(1)(A) necessarily comprises a two-percent allowance for nonproprietary providers. While the language of the statute does not foreclose the hospital's position, the statute's structure and history does. The Medicare legislation already allows proprietary providers a one and one-half percent return on equity capital. Id. Sec. 1395x(v)(1)(B). Added after the reasonable costs provision, section 1395x(v)(1)(B) is an exception to the statute's guiding principle that reimbursement be limited to the costs actually incurred in providing services to Medicare patients. Sun Towers, 725 F.2d at 325. Baylor points to no provision in the statute nor definitive statement in the legislative history that Congress intended reasonable costs to include by necessity the two-percent return allowance for nonproprietary providers. Since we cannot meaningfully add to the thoughtful discussions that have preceded our consideration of the issue, we simply endorse the reasoning of those courts that have confirmed the substantive validity of the Secretary's 1969 repeal. See St. Francis Hospital Center v. Heckler, 714 F.2d 872 (7th Cir.) (per curiam), cert. denied, --- U.S. ----, 104 S.Ct. 1274, 79 L.Ed.2d 679 (1984); Hospital Authority of Floyd County v. Heckler, 707 F.2d 456 (11th Cir.1983) (per curiam); see also Valley View Community Hospital v. United States, 679 F.2d 857, 230 Ct.Cl. 581 (1982); Washington Hospital Center, 581 F.Supp. at 199; St. John's Hickey Memorial Hospital v. Heckler, Nos. 82-931-C, 83-92-C (S.D.Ind. June 7, 1984); Memorial Hospital of Carbondale v. Heckler, No. 82-4200 (S.D.Ill. May 8, 1984); Saline Community Hospital Association v. Schweiker, 554 F.Supp. 1133 (E.D.Mich.1983), rev'd on other grounds, 744 F.2d 517 (6th Cir.1984). The Medicare Act does not require HHS to reimburse nonproprietary providers for a return on their equity capital.