Bellevue Hospital Center v. Leavitt
United States Court of Appeals for the Second Circuit
443 F.3d 163 (2006)
Medicare reimburses hospitals for patient care using fixed rates tied to geographic Metropolitan Statistical Areas (MSAs), managed by the Centers for Medicare and Medicaid Services (CMS). When CMS redrew MSA boundaries in 2000, expanding the New York MSA to include lower-wage areas of northern New Jersey, New York hospitals like Bellevue (plaintiff) stood to receive substantially less reimbursement. Congress separately directed CMS to collect occupational-mix data (numbers of nurses, specialists, and other staff) by September 30, 2003, to refine how geographic areas were defined, but CMS missed that deadline. Bellevue and other hospitals sued the HHS Secretary (defendant), challenging both CMS's new MSA boundaries and its failure to collect the required data on time. The district court granted the hospitals summary judgment and ordered CMS to immediately apply a full occupational-mix adjustment using whatever data it had already collected. The Secretary appealed.
Whether a federal agency has discretion in implementing a statute or regulation only where Congress's directions are silent or ambiguous on how the statute must be carried out.