Hospital San Jorge v. Secretary of Health, Education and Welfare

WYZANSKI, Senior District Judge:

This appeal raises the question whether in seeking reimbursement of its Part A Medicare costs a hospital which has leased its radiology department must apply such portion of the rent which it received from that department as exceeds the hospital’s reasonable costs incurred in that department to reduce the hospital’s reasonable costs incurred in other departments.

I. STATUTORY BACKGROUND

Title XVIII of the Social Security Act establishes the “Medicare” health insurance program. 42 U.S.C. § 1395 et seq. This program, which provides federal reimbursement for medical…