Healthcare decisions abound at the Sixth Circuit recently, as yesterday the Court turned to dissecting Medicare regulations. In Henry Ford Health System v. Department of Health & Human Services (10-1209), a hospital challenged regulations excluding Medicare reimbursements for the time residents spent conducting pure research. Analyzing the regs through the lens of Chevron, the Sixth Circuit found that Congress had expressly delegated authority on the question at issue to the agency, and that the agency’s regulation fell within the wide bounds of reasonableness. The Court acknowledged that its decision stood “in some tension” with a recent Seventh Circuit decision (University of Chicago Med. Center v. Sebelius, 618 F.3d 739 (7th Cir. 2010)), but did not dwell on the point because new regulations promulgated by the agency might have led to a different result at the Seventh Circuit.
Although the decision involves much parsing of the Medicare statute and its regulations, the result here carries real-world consequences for teaching hospitals. The exclusion of time for research activities reduces the bottom line, particularly when the regulations applied retroactively. The Court upheld the retroactive application based on congressional authorization.
Judge Sutton, who was also a member of the panel that upheld the constitutionality of the health care reform statute, authored this opinion. Given the recent healthcare-related decisions by the Circuit, as well as those looming on the horizon, those in the health-care sector should stay tuned to the court’s actions.