Opinion ID: 483852
Heading Depth: 1
Heading Rank: 1

Heading: The Labor/Delivery Policy

Text: 2 The Medicare Program subsidizes the reasonable costs of medical care for elderly and disabled citizens. 42 U.S.C. Sec. 1395 (1982). Part A of the program provides for federal reimbursements to hospitals and other institutions for services rendered to Medicare beneficiaries. 42 U.S.C. Secs. 1395c-1395i-2 (1982). Part B is primarily for reimbursement of physician services. 42 U.S.C. Secs. 1395j-1395w (1982). This action involves only Part A. 3 During the cost reporting periods at issue, the Medicare statute fixed the amount of reimbursement for Part A providers based on the providers actual reasonable cost of furnishing care to Medicare beneficiaries. The statute broadly defines reasonable costs, 42 U.S.C. Sec. 1395x(v)(1)(A), 1 and leaves to the regulations the method or methods to be used, and the items to be included, in determining such costs. Id. The Secretary has issued Provider Reimbursement Manual HIM-15 (Manual) as additional guidance in interpreting the Medicare reimbursement regulations. 2 4 The apportionment of allowable routine service costs between Medicare and non-Medicare patients is at issue. Under the apportionment process, hospital costs are divided into three groups with separate reimbursement calculations for each: one for routine services in general care areas; one for routine services in special care areas; and one for ancillary services. 3 Routine services are defined as the regular room, dietary and nursing services, minor medical and surgical supplies, and the use of equipment for which a separate charge is not customarily made. 42 C.F.R. Sec. 405.452(b)(2). Under the regulations, reimbursement is calculated separately for routine services and for ancillary services. 5 This case involves the reimbursement for routine services in general care areas. The costs of general routine services are apportioned between Medicare and non-Medicare patients on the following basis: 6 (1) Total Cost of Routine Services = Average Cost Per Diem