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THOMAS JEFFERSON UNIV. v. SHALALA

No. 93-120.

512 U.S. 504 (1994)

THOMAS JEFFERSON UNIVERSITY, dba THOMAS JEFFERSON UNIVERSITY HOSPITAL v. SHALALA, SECRETARY OF HEALTH AND HUMAN SERVICES

United States Supreme Court.

Decided June 24, 1994.

Attorney(s) appearing for the Case

Ronald N. Sutter argued the cause for petitioner. On the briefs were James M. Gaynor, Jr., and Amy E. Hancock.

Amy L. Wax argued the cause for respondent. With her on the brief were Solicitor General Days, Assistant Attorney General Hunger, Deputy Solicitor General Kneedler, Robert V. Zener, Robert D. Kamenshine, Harriet S. Rabb, Darrel J. Grinstead, Henry R. Goldberg, and Thomas W. Coons.*

Kennedy, J., delivered the opinion of the Court, in which Rehnquist, C. J., and Blackmun, Scalia, and Souter, JJ., joined. Thomas, J., filed a dissenting opinion, in which Stevens, O'Connor, and Ginsburg, JJ., joined, p. 518.

Justice Kennedy, delivered the opinion of the Court.

Although Medicare reimburses provider hospitals for the costs of certain educational activities, the program is forbidden by regulation from "participat[ing] in increased costs resulting from redistribution of costs from educational institutions . . . to patient care institutions." 42 CFR § 413.85(c) (1993) (emphasis added). In denying reimbursement for the disputed costs in this case, the Secretary...

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