LITTLE CO. v. SHALALA

Nos. 93-2032, 93-2922.

24 F.3d 984 (1994)

LITTLE COMPANY OF MARY HOSPITAL AND HEALTH CARE CENTERS, an Illinois Not-For-Profit corporation, Plaintiff-Appellant, v. Donna SHALALA, as Secretary of the U.S. Department of Health and Human Services, Gail R. Wilensky, as Administrator of the Health Care Financing Administration, Blue Cross and Blue Shield of Illinois, et al., Defendants-Appellees, and LITTLE COMPANY OF MARY HOSPITAL AND HEALTH CARE CENTERS, an Illinois Not-For-Profit Corporation, Plaintiff-Appellant, v. Donna E. SHALALA, Secretary of Health and Human Services, and William Toby, Jr., as Acting Administrator of the Healthcare Financing Administration, Defendants-Appellees.

United States Court of Appeals, Seventh Circuit.

Decided May 19, 1994.


Attorney(s) appearing for the Case

Joshua G. Vincent, William G. Swindal, D. Kendall Griffith, Kristin E. Hutson, Kurt L. Hudson (argued), Hinshaw & Culbertson, Chicago, IL, for Little Co. of Mary Hosp. and Health Care Centers.

Alan S. Dorn (argued), Dept. of Health and Human Services, Region V, Office of Gen. Counsel, James J. Kubik, Asst. U.S. Atty., Civ. Div., Appellate Section, Chicago, IL, for Donna E. Shalala and William Toby, Jr.

Before POSNER, Chief Judge, CUDAHY, Circuit Judge, and McDADE, District Judge.


CUDAHY, Circuit Judge.

Hospitals that provide inpatient treatment for Medicare patients are paid a predetermined amount per patient discharged, based primarily on the patient's diagnosis.1 Under the Prospective Payment System (PPS), instituted in 1983, in order to receive payment, the hospital — when a patient is discharged — assigns the discharge a Diagnostic Related Group (DRG) number. This is essentially a code number...

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