What’s new?  More specifically, what’s a new hospital?  That’s the question posed to the D.C. Circuit in a case brought by over two dozen Select Medical Corp. hospitals against HHS.  And a great deal of money depends on the answer.

Under Medicare rules a “new” hospital can receive 85% reimbursement for capital costs associated with providing inpatient care for the first two years.  Select felt it qualified for the extra money, arguing that it established a number of “new” long-term hospitals around the country.

Not so fast, said the Medicare fiscal intermediary.  You didn’t establish “new” hospitals; you just renovated space that you leased from existing hospitals.  CMS’s Provider Reimbursement Review Board agreed with the intermediary.  So did the District Court that heard Select’s appeal.  Last Friday the D.C. Circuit heard arguments in Select’s appeal from the District Court’s decision.