Baptist Hospital East v. Secretary of Health and Human Services

Appellants, five non-profit hospitals, are all providers of health care services under the Medicare program who, during the relevant period, provided some free health care to non-Medicare patients. These services were accounted for by the hospitals as either bad debts, charity or courtesy allowances. The hospitals now seek reimbursement from the Medicare program for a portion of these services. They appeal a decision of the United States District Court for the Western District of Kentucky upholding 42 C.F.R. § 405.420 under which the Secretary of Health and Human Services denied their claims for reimbursement. We agree with Chief Judge Charles M. Allen that a providers self-disallowance is not a matter covered by its cost report and does not preserve the jurisdiction of the Provider Reimbursement Review Board with respect to the self-disallowance, that section 405.420 does not conflict with the reasonable cost provisions of the Medicare Act, 42 U.S.C. § 1395x(v)(1)(A), and that section 405.420 does not violate the due process clause of the Fifth Amendment.