Verdant Health Commission v. Sebelius , 708 F. App'x 459 ( 2018 )

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FILED
FOR THE NINTH CIRCUIT
JAN 05 2018
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
VERDANT HEALTH COMMISSION, No. 15-35797
DBA Stevens Healthcare, Edmonds,
Washington; et al., D.C. No. 3:14-cv-05108-RBL
Plaintiffs-Appellants,
MEMORANDUM*
v.
ERIC D. HARGAN **, Acting Secretary of
the United States Department of Health
and Human Services,
Defendant-Appellee.
Appeal from the United States District Court
for the Western District of Washington
Ronald B. Leighton, District Judge, Presiding
Argued and Submitted December 8, 2017
Seattle, Washington
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** Eric D. Hargan is substituted for his predecessor, Kathleen Sebelius,
Department of Health and Human Services. Fed R. App. P. 43(c)(2).
Page 2 of 4
Before: TALLMAN and WATFORD, Circuit Judges, and BENITEZ,*** District
Judge.
1. The Secretary of Health and Human Services properly excluded patients
covered under Washington’s Medically Indigent and General
Assistance-Unemployable (MI/GAU) programs from plaintiffs’ Medicare
reimbursements. In University of Washington Medical Center v. Sebelius, we held
that MI/GAU populations are not “eligible for medical assistance under a State
plan approved under subchapter XIX.” 634 F.3d 1029, 1034 (9th Cir. 2011)
(quoting 42 U.S.C. § 1395ww(d)(5)(F)(vi)(II)). Even if “Medicaid money
indirectly subsidized the medical treatment received by Washington’s GAU and
MI populations, their care still does not meet [the] definition of ‘medical
assistance.’” Id. at 1035. Our decision in University of Washington Medical
Center controls the outcome in this case.
Contrary to plaintiffs’ argument, University of Washington Medical Center
is reconcilable with Portland Adventist Medical Center v. Thompson, 399 F.3d
1091 (9th Cir. 2005). To be included in the relevant portion of the Medicare
reimbursement calculation, a patient must be “eligible for medical assistance under
***
The Honorable Roger T. Benitez, United States District Judge for the
Southern District of California, sitting by designation.
Page 3 of 4
a State plan approved under subchapter XIX.” 42 U.S.C.
§ 1395ww(d)(5)(F)(vi)(II). In Portland Adventist Medical Center, we held that the
phrase “eligible for medical assistance” includes patients covered under
demonstration projects authorized by the Secretary (Ҥ 1115 expansion
populations”). 399 F.3d at 1096–97. Federal law establishes that the costs for
such projects “shall . . . be regarded as expenditures under the State plan.” Id. at
1096 (quoting 42 U.S.C. § 1315(a)(2)(A)). Because § 1115 expansion populations
are deemed to receive medical assistance under a State plan, we held that they must
be regarded as eligible for medical assistance under a State plan. Id. No similar
federal statute governs MI/GAU patients, as Washington retains complete control
over those programs. MI/GAU patients are therefore legally distinct from § 1115
expansion populations, even if they share certain characteristics. See University of
Washington Medical Center, 634 F.3d at 1034–35 & n.6.
2. The district court correctly determined that a rational basis supports the
Secretary’s decision to treat § 1115 expansion populations and MI/GAU
populations differently. That the Secretary exerts some amount of control over
§ 1115 demonstration projects and none over Washington’s MI/GAU programs
provides a rational basis for treating the populations differently for purposes of
Medicare reimbursements.
Page 4 of 4
Plaintiffs’ motion to supplement the record is DENIED.
AFFIRMED.