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Administrative Law Keyed to Breyer
Bowen v. Georgetown University Hospital
Citation:
488 U.S. 204 (1988)Facts
In 1981, the Secretary of Health and Human Services issued a cost-limit schedule that changed the method for calculating the wage index used in Medicare reimbursement by excluding federal government hospital wages from the computation. Various hospitals challenged this rule, and in 1983, a district court invalidated it for failure to comply with APA notice and comment requirements. Rather than appealing, the Secretary settled the hospitals’ reimbursement reports using the pre-1981 method. In 1984, the Secretary sought public comment on a proposal to reissue the 1981 rule retroactively to July 1, 1981. After considering comments, the Secretary reissued the rule and sought to recoup sums previously paid to hospitals under the pre-1981 method. Georgetown University Hospital and six other hospitals that had benefited from the invalidation of the 1981 rule were required to return over $2 million in reimbursement payments. They challenged the retroactive application of the rule, arguing it violated both the APA and the Medicare Act.
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