Bowen v. Georgetown University Hospital

The Medicare Act authorized the Secretary of Health and Human Services (Secretary) (defendant) to set limits on Medicare reimbursements. In 1981, the Secretary adopted a new wage-index formula without proper notice and comment, and it was later invalidated on that procedural ground. In 1984, the Secretary reissued essentially the same wage-index rule but made it apply retroactively back to 1981, allowing recovery of over $2 million already paid out under the invalidated 1981 index. Georgetown University Hospital and six other hospitals (plaintiffs) challenged the retroactive rule under the Medicare Act and the Administrative Procedure Act (APA); the district court and court of appeals both ruled for the hospitals, and the Secretary sought Supreme Court review.