Donna E. Shalala, Secretary of Health and Human Services v. Guernsey Memorial Hospital (514 U.S. 87)
U.S. Supreme Court · decided March 6, 1995 · Supreme Court Database (Spaeth)
- Citation
- 514 U.S. 87 · 115 S. Ct. 1232
- Decided
- March 6, 1995
- Term
- October Term 1994
- Vote
- 5–4
- Majority author
- Justice Kennedy
- Issue area
- Judicial Power
- Disposition
- Reversed
- Outcome
- Petitioning party won
- Ideological direction
- Conservative
Opinion excerpt
Justice Kennedy delivered the opinion of the Court. In this case a health care provider challenges a Medicare reimbursement determination by the Secretary of Health and Human Services. What begins as a rather conventional accounting problem raises significant questions respecting the interpretation of the Secretary’s regulations and her authority to resolve certain reimbursement issues by adjudication and interpretive rules, rather than by regulations that address all accounting questions in precise detail. The particular dispute concerns whether the Medicare regulations require reimbursement according to generally accepted accounting principles (GAAP), and whether the reimbursement guideline the Secretary relied upon is invalid because she did not follow the notice-and-comment provisions of the Administrative Procedure Act (APA) in issuing it. We hold that the Secretary’s regulations do not require reimbursement according to GAAP and that her guideline is a valid interpretive rule. I Respondent Guernsey Memorial Hospital (hereinafter Hospital) issued bonds in 1972 and 1982 to fund capital improvements. In 1985, the Hospital refinanced its bonded debt by issuing new bonds. Although the refinancing will result in an estimated $12 million saving in debt service costs, the transaction did result in an accounting loss, sometimes referred to as an advance refunding or defeasance…
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