Less than a year after the United States Court of Appeals for the First Circuit

issued the opinion in Rhode Island Hospital v. Leavitt, No. 07-2673 (1st Cir.

Nov. 17, 2008), upholding the Secretary of the Department of Health and

Human Services' ("Secretary") interpretation of the indirect medical education

(IME) regulation to exclude time spent by residents engaged in research

activities, the United States District Court for the Northern District of Illinois has

Thomas W. Coons

410-347-7389

twcoons@ober.com

Kristin Cilento Carter

410-347-7309

kccarter@ober.com

reached the opposite conclusion. In University of Chicago Medical Center v.

Sebelius, No. 1:07-cv-07016 (Aug. 3, 2009), the University of Chicago Medical

Center ("Hospital") challenged the Centers for Medicare and Medicaid

Services' (CMS) reduction of the Hospital's Medicare payments for fiscal year

(FY) 1996 by excluding time spent be residents engaged in educational

research from the IME full-time equivalent (FTE) resident count. Finding that

the reduction was improper, the Court issued summary judgment in favor of

the hospital finding that the IME resident count for FY 1996 should include

resident time engaged in research when the requirements of the IME

regulation are met.