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United States of America, On the Relation of Robert S. Goldberg and v. Rush University Medical Center, et al

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ARGUED SEPTEMBER 19, 2011

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

Medicare pays teaching hospitals for work by residents (that is, recent graduates still in training) on a fee-for-service basis only when a teaching physician supervises the residents. (Technically the payments are “for” the services rendered by the teacher, in the role of the patient’s attending physician, but the recipient is the hospital rather than either the teaching physician or the resident.) The costs of pro- viding an extended education to the residents are reim- bursed through grants rather than by payments for specific services they perform for patients. During the 1990s, the Department of Health and Human Services concluded that many if not all of the 125 teaching hospitals affiliated with medical schools were billing for unsupervised services that residents performed, thus receiving double compensation. HHS began to audit teaching hospitals’ invoices and demand reimbursement. The General Accounting Office (now the Govern- ment Accountability Office) conducted its own study and concluded that HHS was right. See GAO, Medicare: Concerns With Physicians at Teaching Hospitals (PATH) Audits (July 1998).

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