United States Third Circuit

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Nazareth Hospital v. Secretary US Department of Health and Human Services, 13-2627

In plaintiff-hospitals' challenge to a Medicare regulation related to the calculation of patient days for "disproportionate share hospitals" (DSH) payment formula, which permitted the inclusion of patient days wherein the patients were eligible for Medicaid or covered under a federal statutory waiver program, but excluded state general assistance and charity plan patient days going forward, the district court's judgment holding the regulation to be arbitrary and capricious, as well as a violation of the Equal Protection Clause is reversed and remanded, where: 1) the record establishes that defendant-Secretary set forth multiple rational bases upon which to distinguish patient days covered under Pennsylvania's General Assistance program, from days covered under a federal statutory waiver program; 2) the Secretary has the statutory authority to treat those two categories of patient days differently from each other; and 3) given the different purposes of the programs, and the extent of federal control over them, it was neither arbitrary nor capricious to do so.

Appellate Information

  • Decided 04/02/2014
  • Published 04/02/2014




  • United States Third Circuit


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