New Hampshire Hospital Ass’n v. Hargan

The First Circuit affirmed the district court’s ruling that the “set-off rule” announced by the United States Secretary of Health and Human Services (Secretary) in the form of answers to Frequently Asked Questions (FAQs) posted on medicaid.gov represented a substantive policy decision that could not be adopted without notice and comment.In 1981, Congress authorized the payment of sums in addition to Medicaid payments hospitals that treat indigent patients receive in order to cover the full costs of care. Congress later passed a law seeking to cap those payments at each hospital’s “costs incurred.” At issue was to what extent “costs incurred” equals the total costs of service rather than the costs net of payments from sources such as Medicare and private insurance. With two exceptions, Congress stated that “costs incurred” are “as determined by the Secretary.” In 2010, the Secretary made its FAQs announcement that the payments to be offset against total costs in calculating “costs incurred” also included reimbursements received from Medicare and private insurance. The First Circuit held that the Secretary’s rule was procedurally improper for having failed to observe the notice-and-comment procedures prescribed by the Administrative Procedure Act. View "New Hampshire Hospital Ass’n v. Hargan" on Justia Law