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Resident Forum
April 22/29, 1998

Supreme Court Rules Against Teaching Hospitals

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JAMA. 1998;279(16):1310M. doi:10.1001/jama.279.16.1310

In a 6 to 3 ruling issued in late February, the US Supreme Court said that the US Department of Health and Human Services (DHHS) could recalculate Medicare payments to teaching hospitals dating back to 1984. The ruling is expected to cost US teaching hospitals over $100 million.

Medicare reimburses teaching hospitals for expenses related to providing graduate medical education (GME). The case of Regions Hospital v Shalala brought forth by St Paul-Ramsey Medical Center, a teaching hospital in St Paul, Minn, questioned whether or not the Secretary of the DHHS had the authority to retrospectively reaudit Medicare payments to teaching hospitals. According to federal statute, the DHHS has a 3-year time limit in which it can reopen a previous Medicare payment audit. In 1985, the US Congress issued new rules regarding Medicare payments to teaching hospitals. The new rules set fiscal year 1984 as a baseline year that would be used to determine subsequent payments.