The U.S. State Court of Appeals has ruled that the federal government does not have to reimburse teaching hospitals for time residents spent conducting pure research in the 1990s, according to a court conclusion from Leagle.
A formula established by the government in 1985 failed to specify which resident activities counted towards a hospital's indirect-cost FTE calculation, and this specification was then left up to the Secretary of the Department of Health and Human Services. Henry Ford Health System in Detroit has challenged the government after it received Medicare reimbursements for fiscal years 1991-1996 and 1998-1999 that excluded all of the time residents spent on "pure research," or research unrelated to the treatment of a patient. The hospital successfully challenged that determination in 2009 in federal district court.
While the case was pending, Congress re-wrote the FTE rules in the Patient Protection and Affordable Care Act. Under PPACA, the Secretary must include in hospitals' indirect FTE counts "all the time spent by an intern or resident in an approved medical residency training program in non-patient care activities, such as didactic conferences and seminars, as such time and activities are defined by the Secretary, that occurs in the hospital."
Exercising her authority to define "such time and activities," Secretary Kathleen Sebelius said eligible non-patient care activities do not include the time residents spend conducting pure research. Henry Ford objected, claiming the Secretary exceeded her authority in the promulgation of this rule.
The appeals court decided the following in the case on Aug. 18: "The Secretary may reasonably believe that Medicare primarily focuses on patient care, not medical research. She thus may be willing to reimburse only those non-patient care activities that seem to benefit current patients, a conclusion that necessarily is not arbitrary given that Congress took the same view in dealing with non-patient care activities outside of a hospital in § 5505(a). Because her exclusion of pure research comports with the relevant statutes, we give the regulation controlling weight."
Thus, the court ruled that the regulation can apply retroactively to the fiscal years in which Henry Ford did not receive Medicare reimbursement for "pure research" activities, reversing the district court's 2009 decision.
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A formula established by the government in 1985 failed to specify which resident activities counted towards a hospital's indirect-cost FTE calculation, and this specification was then left up to the Secretary of the Department of Health and Human Services. Henry Ford Health System in Detroit has challenged the government after it received Medicare reimbursements for fiscal years 1991-1996 and 1998-1999 that excluded all of the time residents spent on "pure research," or research unrelated to the treatment of a patient. The hospital successfully challenged that determination in 2009 in federal district court.
While the case was pending, Congress re-wrote the FTE rules in the Patient Protection and Affordable Care Act. Under PPACA, the Secretary must include in hospitals' indirect FTE counts "all the time spent by an intern or resident in an approved medical residency training program in non-patient care activities, such as didactic conferences and seminars, as such time and activities are defined by the Secretary, that occurs in the hospital."
Exercising her authority to define "such time and activities," Secretary Kathleen Sebelius said eligible non-patient care activities do not include the time residents spend conducting pure research. Henry Ford objected, claiming the Secretary exceeded her authority in the promulgation of this rule.
The appeals court decided the following in the case on Aug. 18: "The Secretary may reasonably believe that Medicare primarily focuses on patient care, not medical research. She thus may be willing to reimburse only those non-patient care activities that seem to benefit current patients, a conclusion that necessarily is not arbitrary given that Congress took the same view in dealing with non-patient care activities outside of a hospital in § 5505(a). Because her exclusion of pure research comports with the relevant statutes, we give the regulation controlling weight."
Thus, the court ruled that the regulation can apply retroactively to the fiscal years in which Henry Ford did not receive Medicare reimbursement for "pure research" activities, reversing the district court's 2009 decision.
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