Temple University v. White

• Citation: 941 F.2d 201
• Decision Date: 23 September 1991
• Docket Number: 90-1203,Nos. 90-1112,s. 90-1112
• Parties: , 69 Ed. Law Rep. 1029, 34 Soc.Sec.Rep.Ser. 355, Medicare & Medicaid Guide P 39,527, 2 NDLR P 20 TEMPLE UNIVERSITY, Plaintiff-Appellee, v. John F. WHITE, Jr., Eileen M. Schoen, David S. Feinberg, David D. Ulsh, G. June Hoch, Defendants-Appellants. ALBERT EINSTEIN MEDICAL CENTER, Allegheny General Hospital, Children's Hospital of Pittsburgh, Episcopal Hospital, Giuffre Medical Center, Magee-Womens Hospital, Mercy Catholic Medical Center-Misericordia Division, Mercy Hospital of Pittsburgh, Montefiore Hospital Association of Western Pennsylvania, Inc., Presbyterian University Hospital of Pittsburgh, St. Christopher's Hospital for Children, St. Joseph's Hospital, St. Mary Hospital, Western Pennsylvania Hospital, Germantown Hospital and Medical Center v. WHITE, John F., Jr., as Secretary of Public Welfare, Hershock, Michael H., as Secretary of the Budget John F. White, Jr. and Michael H. Hershock, Appellants. FRANKFORD HOSPITAL v. WHITE, Jr., John F., Secretary of Public Welfare, Schoen, Eileen M., Deputy Secretary for Medical Assistance Programs, Feinberg, David S., Director of the Bureau of Policy and Program Development of the Office of Medical Assistance Programs, Ulsh, David D., Acting Director of the Division of Inpatient Programs of the Office of Medical Assistance Programs, and Hershock, Michael H., Secretary of the Budget John F. White, Jr., Eileen M. Schoen, David S. Feinberg, David D. Ulsh and Michael H. Hershock, Appellants. HAHNEMANN UNIVERSITY HOSPITAL and Presbyterian Medical Center of Philadelphia, and the Trustees of University of Pennsylvania v. WHITE, John F., Jr., Secretary of Public Welfare, Schoen, Eileen M., Deputy Secretary for Medical Assistance, Feinberg, David S., Director of the Bureau of Policy and Program Development of the Office of Medical Assistance, and Ulsh, David D., Acting Director of the Division of Inpatient Programs of the Office of Medical Assistance and Hershock, Michael H., Secretary of the Budget John F. White, Jr., Eileen M. S
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 201

941 F.2d 201

20 Fed.R.Serv.3d 734, 69 Ed. Law Rep. 1029,

34 Soc.Sec.Rep.Ser. 355,

Medicare & Medicaid Guide P 39,527, 2 NDLR P 20

TEMPLE UNIVERSITY, Plaintiff-Appellee, v. John F. WHITE, Jr., Eileen M. Schoen, David S. Feinberg, David D. Ulsh, G. June Hoch, Defendants-Appellants.

ALBERT EINSTEIN MEDICAL CENTER, Allegheny General Hospital,

Children's Hospital of Pittsburgh, Episcopal Hospital,

Giuffre Medical Center, Magee-Womens Hospital, Mercy

Catholic Medical Center-Misericordia Division, Mercy

Hospital of Pittsburgh, Montefiore Hospital Association of

Western Pennsylvania, Inc., Presbyterian University Hospital

of Pittsburgh, St. Christopher's Hospital for Children, St.

Joseph's Hospital, St. Mary Hospital, Western Pennsylvania

Hospital, Germantown Hospital and Medical Center v. WHITE, John F., Jr., as Secretary of Public Welfare,

Hershock, Michael H., as Secretary of the Budget

John F. White, Jr. and Michael H. Hershock, Appellants.

FRANKFORD HOSPITAL v. WHITE, Jr., John F., Secretary of Public Welfare, Schoen, Eileen M., Deputy Secretary for Medical Assistance Programs,

Feinberg, David S., Director of the Bureau of Policy and

Program Development of the Office of Medical Assistance

Programs, Ulsh, David D., Acting Director of the Division of

Inpatient Programs of the Office of Medical Assistance

Programs, and Hershock, Michael H., Secretary of the Budget

John F. White, Jr., Eileen M. Schoen, David S. Feinberg,

David D. Ulsh and Michael H. Hershock, Appellants.

HAHNEMANN UNIVERSITY HOSPITAL and Presbyterian Medical

Center of Philadelphia, and the Trustees of

University of Pennsylvania v. WHITE, John F., Jr., Secretary of Public Welfare, Schoen, Eileen M., Deputy Secretary for Medical Assistance,

Feinberg, David S., Director of the Bureau of Policy and

Program Development of the Office of Medical Assistance, and

Ulsh, David D., Acting Director of the Division of Inpatient

Programs of the Office of Medical Assistance and Hershock,

Michael H., Secretary of the Budget

John F. White, Jr., Eileen M. Schoen, David S. Feinberg,

David D. Ulsh, and Michael H. Hershock, Appellants.

HOSPITAL ASSOCIATION OF PENNSYLVANIA, Allegheny Valley

Hospital, the Allentown Hospital, Allentown Osteopathic

Medical Center, J.C. Blair Memorial Hospital, Braddock

General Hospital, Bradford Hospital, Brandywine Hospital,

Butler Memorial Hospital, Carbondale General Hospital,

Central Medical Center and Hospital; Chambersburg Hospital,

Chester County Hospital, Chestnut Hill Hospital, the

Children's Hospital of Philadelphia, Charles Cole Memorial

Hospital, Clarion Osteopathic Community Hospital, Clearfield

Hospital, Community General Osteopathic Hospital, Community

Medical Center, Conemaugh Valley Memorial Hospital, Divine

Providence Hospital, Divine Providence Hospital of

Pittsburgh, Doylestown Hospital, Dubois Regional Medical

Center, Ephrata Community Hospital, Eye & Ear Hospital of

Pittsburgh, Forbes Metropolitan Health Center, Forbes

Regional Health Center, Franklin Regional Medical Center,

Frick Community Health Center, Geisinger Medical Center,

Geisinger Wyoming Valley Medical Center, the Germantown

Hospital and Medical Center; Gettysburg Hospital, Gnaden

Huetten Memorial Hospital, Good Samaritan Hospital, Greene

County Memorial Hospital, Hamot Medical Center, Hanover

General Hospital, Harrisburg Hospital, Highlands Hospital

and Health Center, Indiana Hospital, Hameson Memorial

Hospital, Jeannette District Memorial Hospital, Jefferson

Hospital, Andrew Kaul Memorial Hospital, Kensington

Hospital, Lancaster General Hospital, Lankenau Hospital, Lee

Hospital, Lehigh Valley Hospital Center, McKeesport

Hospital, Meadville Medical Center, the Medical Center,

Beaver, Pa., Inc., Medical College of Pennsylvania, Memorial

Hospital, Memorial Hospital of Bedford, Mercy Catholic

Medical Center, Fitzgerald Mercy Division, Mercy Hospital,

Altoona, Methodist Hospital, Millcreek Community Hospital,

Monongahela Valley Hospital, Muhlenburg Hospital Center,

Northeastern Hospital of Philadelphia, North Penn Hospital,

Osteopathic Medical Center of Philadelphia, Pennsylvania

Hospital, Phoenixville Hospital, Pottstown Memorial Medical

Center, Pottsville Hospital and Warne Clinic, Punxsutawney

Area Hospital, the Penn State Hospital/the Milton S. Hershey

Medical Center, Quakertown Community Hospital, Reading

Hospital and Medical Center, Roxborough Memorial Hospital,

St. Agnes Medical Center, St. Francis Medical Center, St.

Joseph's Hospital, Carbondale, St. Joseph Hospital,

Lancaster, Sacred Heart Hospital, Sewickley Valley Hospital,

Shadyside Hospital, Sharon General Hospital, Southern

Chester County Medical Center, Suburban General Hospital,

Sunbury Community Hospital, Taylor Hospital, Tyler Memorial

Hospital, Tyrone Hospital, Westmoreland Hospital

Association, Wilkes-Barre General Hospital, the Williamsport

Hospital & Medical Center, and York Hospital and Greenville

Regional Hospital, Altoona Hospital, Bloomsburg Hospital,

Brownsville Hospital, Bryn Mawr Hospital, Canonsburg

Hospital, Carlisle Hospital, Citizens General, Community

General Hospital, Reading, Community Hospital of Lancaster,

Crozer-Chester Hospital, Delaware County Memorial Hospital,

Easton Hospital, Ellwood Hospital, Grand View Hospital,

Jeanes Hospital, Jersey Shore Hospital, J.F. Kennedy

Hospital, Lower Bucks Hospital, Metro Health Hospital,

Metropolitan Hospital, Central, Metropolitan Hospital,

Parkview, Metropolitan Hospital, Springfield, Montgomery

Hospital, Paoli Hospital, Pocono Hospital, Sacred Heart

Hospital, Chester, Saint John's Hospital, Hazelton-Saint

Joseph's Medical Center, Saint Joseph Hospital, Reading,

Saint Luke's Hospital, Saint Margaret Memorial Hospital,

Saint Vincent's Hospital, Suburban Hospital, Titusville

Hospital, Uniontown Hospital, Washington Hospital and the

Wayne County Memorial Hospital. v. WHITE, John F., Jr., as Secretary of Public Welfare,

Department of Public Welfare, Commonwealth of Pennsylvania,

Hershock, Michael H., in his official capacity only as

Secretary of the Budget, Department of the Budget,

Commonwealth of Pennsylvania, Franklin, Carolyn, in her

official capacity only as Western Regional Representative of

Public Welfare, Department of Public Welfare, Commonwealth

of Pennsylvania, Hughes, Patricia, in her official capacity

only as Southeastern Regional Representative of Public

Welfare, Department of Public Welfare, Commonwealth of Pennsylvania

John F. White, Jr., Carolyn Franklin, Patricia Hughes and

Michael H. Hershock, Appellants. (Two Cases)

TEMPLE UNIVERSITY, Plaintiff-Appellee, v. John F. WHITE, Jr., Eileen M. Schoen, David S. Feinberg, David D. Ulsh, G. June Hoch, Defendants-Appellants.

Nos. 90-1112, 90-1203 to 90-1206, 90-1244, 90-1661.

United States Court of Appeals Third Circuit.

Argued Jan. 10, 1991.

Decided July 30, 1991.

As Amended Sept. 23, 1991.

Ernest D. Preate, Jr., Atty. Gen., Kate L. Mershimer, Senior Deputy Atty. Gen. (argued), Gwendolyn T. Mosley, Calvin R. Koons, Senior Deputy Attys. Gen., John G. Knorr, III, Chief Deputy Atty. Gen., Chief, Litigation Section, Office of Atty. Gen. of Pa., Harrisburg, Pa., William D. Lenahan, Asst. Counsel, Dept. of Public Welfare, Harrisburg, Pa., for appellants John F. White, Jr., Eileen M. Schoen, David S. Feinberg and David D. Ulsh.

Matthew M. Strickler (argued), Jenny P. Shulbank, Ballard, Spahr, Andrews & Ingersoll, George E. Moore, of counsel Temple University, Philadelphia, Pa. for appellee in 90-1112 and 90-1244.

Jeffrey B. Schwartz, David M. Doret, Mark H. Gallant (argued), Alan G. Rosenbloom, Wolf, Block, Schorr & Solis-Cohen, Philadelphia, Pa., for amicus in 90-1112 and 90-1244 and for appellees in 90-1203.

Jennifer A. Stiller (argued), Elizabeth A. Read, Patrick K. McCoyd, Montgomery, McCracken, Walker & Rhoads, Philadelphia, Pa. for appellees in 90-1204 and 90-1205.

Roland Morris (argued), Jack M. Mumford, Paula G. Sanders, Duane, Morris & Heckscher, Harrisburg, Pa., for appellees in 90-1206.

Henry W. Sawyer, III (argued), James Eiseman, Jr., Drinker Biddle & Reath, Philadelphia, Pa., for appellee Sacred Heart Medical Center in 90-1661.

Before COWEN, ALITO and GARTH, Circuit Judges.

OPINION OF THE COURT

GARTH, Circuit Judge:

This set of six consolidated appeals arises from the challenges, raised by over 140 Pennsylvania hospitals, to the validity of Pennsylvania's payment rates that the Commonwealth has set pursuant to its obligations under the Medicaid Program, Title XIX of the Social Security Act. 42 U.S.C.A. § 1396 et seq. (1983 & West Supp.1991). The Medicaid Program, as it is described in Pinnacle Nursing Home v. Axelrod, 928 F.2d 1306, 1309 (2d Cir.1991), "establishes a joint federal and state cost-sharing system to provide necessary medical services to indigent persons who otherwise would be unable to afford such care."

Because Pennsylvania participates in the Medicaid Program, it must comply with the federal statutory and regulatory scheme which requires, among other things, that a participating state establish a Medical Assistance Program, ("MAP"), pursuant to which it pays hospitals for their inpatient treatment of Medicaid patients. Wilder v. Virginia Hosp. Ass'n, --- U.S. ----, 110 S.Ct. 2510, 2513, 110 L.Ed.2d 455 (1990). The hospitals involved in these appeals all claim that Pennsylvania's 1988-1989 payment rates were inadequate to meet the substantive standards of Title XIX, and that the method by which the Commonwealth promulgated those rates did not comply with the requirements of that statute. Accordingly, the plaintiff hospitals argue that Pennsylvania's MAP, which established the 1988-1989 rates, must be voided.

I

Temple University, ("Temple"), brought this § 1983 action in August of 1988, alleging that the Pennsylvania Department of Public Welfare, ("DPW"), was depriving Temple University Hospital of rights secured by Title XIX, 42 U.S.C.A. § 1396 et seq., and the regulations thereunder. ¹ Following a bench trial, the district...