In their opinions …

“My effort is in the direction of simplicity.” once wrote the namesake of the Henry Ford Hospital. Henry Ford, My Life and Work 13 (Garden City Publ’g Co. 1922). Mr. Ford apparently had nothing to do with the creation of the Medicare program.

— Sixth Circuit Judge Jeffrey S. Sutton, in Henry Ford Health System v. Department of Health and Human Services.

The case required Sutton to reconcile a provision of the Patient Protection and Affordable Care Act of 2010 with a regulation promulgated under it.

At issue was whether Henry Ford Hospital, a teaching hospital, was entitled to Medicare reimbursement for the time residents spend doing “pure research.”

The act requires the “Secretary of Health and Human Services to reimburse teaching hospitals for ‘all the time spent by an intern or resident …. in non-patient care activities … as such time and activities are defined by the Secretary.'”

One of the Secretary’s regulations “exclud[es] from hospitals’ Medicare reimbursements the time residents spent conducting pure research.”

Sutton concluded there was a clear delegation of authority from Congress to the Secretary to define “non-patient activities.” He also ruled the Secretary’s exclusion of “pure research” from those activities did not exceed Congress’ delegation of authority.

This is a pure financial headache for Henry Ford Hospital. The ruling affects the hospital’s Medicare reimbursements for Fiscal Years 1991–96 and 1998–99.

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