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Rush University Medical Center v. Leavitt

August 1, 2008


Appeals from the United States District Court for the Northern District of Illinois, Eastern Division. No. 06 C 1550-Joan B. Gottschall, Judge.

The opinion of the court was delivered by: Easterbrook, Chief Judge.


Before EASTERBROOK, Chief Judge, and WOOD and WILLIAMS, Circuit Judges.

Rush University Medical Center believes that it has not received all of the Medicare payments to which it is entitled for fiscal year 1991. After an unduly prolonged administrative process, the Secretary of Health and Human Services resolved numerous contested issues against the Medical Center. On judicial review under 42 U.S.C. §1395oo(f)(1), the district court made a decision mostly favorable to the Secretary's position. 2007 U.S. Dist. LEXIS 66244 (N.D. Ill. Sept. 4, 2007).

Unfortunately, it is impossible to tell from the judgment who won what. It reads:

IT IS HEREBY ORDERED AND ADJUDGED that Plaintiff, Rush University Medical Center's motion for summary judgment is granted in part and denied in part; the Defendant, Michael Leavitt's motion for summary judgment is granted in part and denied in part. Civil case terminated.

Unless the plaintiff loses outright, a judgment must provide the relief to which the winner is entitled. That motions have been granted is beside the point. See, e.g., Waypoint Aviation Services Inc. v. Sandel Avionics, Inc., 469 F.3d 1071 (7th Cir. 2006); Foremost Sales Promotions, Inc. v. Director, BATF, 812 F.2d 1044 (7th Cir. 1987); Reytblatt v. Denton, 812 F.2d 1042 (7th Cir. 1987).

Despite Fed. R. Civ. P. 58(b)(2), which requires district judges to review and approve any judgment other than one implementing a jury verdict, awarding a sum certain, or denying all relief, this judgment was drafted and entered by a deputy clerk. For more than 20 years this court has been urging the district judges of this circuit to enter proper judgments. Otis v. Chicago, 29 F.3d 1159 (7th Cir. 1994) (en banc), and Bethune Plaza, Inc. v. Lumpkin, 863 F.2d 525 (7th Cir. 1988), are two examples among many. See also, e.g., Properties Unlimited, Inc. v. Cendant Mobility Services, 384 F.3d 917 (7th Cir. 2004); Buck v. U.S. Digital Communications, Inc., 141 F.3d 710 (7th Cir. 1998).

Some district judges turn each decision over to a deputy clerk, who either fails to enter a judgment (many a case peters out with a "minute order" but nothing resembling a Rule 58 judgment) or uses the last paragraph of the opinion as a template for drafting and entering a judgment without judicial input. When the disposition is simple, a clerk's interpretation is apt to be satisfactory. But when the disposition is complex, the clerk (who is not a lawyer) is at sea and disinclined to venture an independent interpretation. Then we get things like this document, which says that the judge has granted one or more motions ("in part"!) but does not even try to specify what matters: the consequence of the judicial ruling. Nothing but review by a judge, as Rule 58(b)(2) demands, will yield a satisfactory judgment when the outcome is complicated.

Sometimes it is easy to infer the disposition, and then the appeal may proceed despite technical shortcomings. See Bankers Trust Co. v. Mallis, 435 U.S. 381 (1978). But nothing is particularly easy about this litigation, which involves multiple issues. In the course of addressing more than a dozen disputes, the district judge concluded that the controversy could not be resolved fully without a remand to the agency. The agency had declined to compensate the Medical Center for the costs of resident physicians participating in some fellowship programs, which the agency thought had not been approved by the appropriate bodies. Concerned that some of the programs might have been approved, but that the Medical Center had been confused by the documentation requirements, the court directed the agency to give the Medical Center another opportunity to "complete Worksheet D-2" for some participants in some of the programs. Which participants and programs, and what are the agency's marching orders on remand? The document did not say.

At this court's urging, the parties returned to the district court and obtained a more informative judgment. A new appeal has been filed. The second judgment, which the parties drafted for the district judge's signature, is itself barely adequate. It says that the agency must allow the Medical Center to submit documentation for "the costs of services furnished by residents in up to thirteen non-approved fellowship programs". More detail would have been appropriate, but this vagueness does not make the judgment non-final, though it would prevent any motion to hold the agency in contempt if it does not understand its duties the same way the Medical Center does.

The remand creates a second problem with appellate jurisdiction. Remand usually signifies that a decision is not final. Who wins, and how much, cannot be known until activity on remand has been finished. But the Supreme Court has held that a remand to an agency is final when the proceedings may end without further litigation-for, if the private claimant prevails, the agency cannot obtain judicial review of its own decision (even when that decision has been compelled by a judicial decision with which the agency disagrees). Unless the issues can be addressed in court while the agency deals with the remand, they might never be open to appellate review. That makes the district judge's decision effectively final. See Forney v. Apfel, 524 U.S. 266 (1998); Sullivan v. Finkelstein, 496 U.S. 617 (1990). Forney and Finkelstein arose from the Social Security program, but in Edgewater Foundation v. Thompson, 350 F.3d 694 (7th Cir. 2003), we concluded that they are equally applicable to medical providers' suits seeking reimbursement under the Medicare program. The sort of remand ordered by the district judge is one that might well conclude without a return to court, so the decision is appealable. Although a decision that is "final" only because the agency may be unable to obtain review after its own action on remand might be thought to justify immediate review only at the agency's behest, Forney concluded that any decision final from the agency's perspective also is final from the private litigant's, and that principle controls here.

The first cluster of appellate issues arises from 42 U.S.C. §1395ww(d)(5)(F)(i)(I), which provides that hospitals serving a "significantly disproportionate number of low-income patients" receive additional Medicare payments. The statute and regulations treat persons eligible for care under the Medicaid program as "low-income patients" for this purpose. At the outset of this "disproportionate share" program, it was unclear how persons covered by states' general-assistance programs would be classified. Some hospitals (and some of the Medicare program's fiscal intermediaries) equated general-assistance patients to Medicaid patients; others did not. A regulation issued in December 1999, and effective January 1, 2000, provides that general-assistance patients do not count among the "low-income patients" for the purpose of this program. (We call it a regulation, though it is actually Program Memorandum A-99-62. The parties treat this document as if it had the status of a regulation; we do likewise without deciding whether that is correct.)

Periods before calendar year 2000 are covered by a grandfather clause (which the parties call the "Hold Harmless Rule"). Hospitals that classified general-assistance patients with Medicaid patients in cost reports filed before October 15, 1999, or took administrative appeals based on that theory, are entitled to the ...

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