Adirondack Medical Center v. Kathleen Sebelius

BROWN, Circuit Judge.

In 2007, the Secretary of Health and Human Services revamped Medicare’s Inpatient Prospective Payment System, updating the diagnostic weighting used to calculate reimbursements for hospitals treating the program’s beneficiaries. As with most changes to complex systems, there were unintended consequences— namely in the form of overpayments to hospitals — but Congress had proactively attempted to counter unwarranted increases by adjusting the standardized base amount used to calculate reimbursement for the majority of hospitals. The Secretary thought, however, the fiscal…