HILLSBOROUGH COUNTY HOSPITAL AUTHORITY v. SHALALA (1995)

Plaintiffs, approximately 114 acute care hospitals (“the Hospitals”) belonging to the Florida Hospital Association, appeal the district court's grant of summary judgment in favor of the Secretary of Health and Human Services (“the Secretary”) denying the Hospitals' claim that they were entitled to an adjustment in their Medicare reimbursements based on the “extraordinary circumstances” exception of 42 U.S.C. § 1395ww(b)(4)(A).   Specifically, the district court upheld the Secretary's determination that § 1395ww(b)(4)(A) was not incorporated into 42 U.S.C. § 1395ww(d), Medicare's Prospective Payment System (PPS).   We affirm.

This particular issue of statutory interpretation has already been addressed by three of our sister circuits.   Both the D.C. Circuit and the Third Circuit have held that the Secretary could reasonably conclude that Congress did not incorporate the “extraordinary circumstances” exception of § 1395ww(b)(4)(A) into the PPS.  Episcopal Hospital v. Shalala, 994 F.2d 879, 884 (D.C.Cir.1993), cert. denied, 510 U.S. 1071, 114 S.Ct. 876, 127 L.Ed.2d 73 (1994);  Sacred Heart Medical Center v. Sullivan, 958 F.2d 537, 550 (3rd Cir.1992).   In examining the plain language of the PPS statute, these courts point out that § 1395ww(d)(1) makes no reference to § 1395ww(b)(4)(A), even though it expressly refers to § 1395ww(b)(3)(A), and, furthermore, the PPS contains its own list of exceptions in § 1395ww(d)(5), eliminating any need to incorporate § 1395ww(b)(4)(A)'s exception.   See Episcopal, 994 F.2d at 883;  Sacred Heart, 958 F.2d at 545.   The Sacred Heart court also notes that the legislative history supports the Secretary's determination that Congress did not intend to incorporate § 1395ww(b)(4)(A) into the PPS.  Id., 958 F.2d at 547.   Although the Ninth Circuit has expressed a contrary view on this issue, see Community Hospital of Chandler v. Sullivan, 963 F.2d 1206, 1214 n. 4 (9th Cir.1992), we nonetheless find the reasoning of the D.C. and Third Circuits persuasive.   We therefore AFFIRM the judgment of the district court.

PER CURIAM: