Voluntary Action Cannot be a Taking (Naturally)

Illustrating the principle that voluntariness is a defense to a takings claim, the U.S. Court of Appeals for the Eleventh Circuit recently ruled that a Florida hospital could not challenge a cap on reimbursements for providing medical treatment to federal detainees because the hospital voluntarily subjected itself to the requirement to provide medical care according to these terms. The decision in Baker County Medical Services, Inc. v. U.S. Attorney General was issued on August 14, 2014.

The hospital asserted its takings claim based on 18 U.S.C. § 4006(b)(1), which provides that the amount hospitals may charge for providing medical services to “individuals in the custody of the United States Marshals Service, the Federal Bureau of Investigation and the Department of Homeland Security” cannot exceed “the amount that would be paid for the provision of similar health care items and services under the Medicare program….”  The plaintiff hospital had voluntarily enrolled in the Medicare program, meaning that it had to accept the Medicare payment rate for treating Medicare patients, and also was required to provide emergency medical treatment to all patients regardless of ability to pay, including federal detainees.   As a result of these interrelated mandates, the hospital, given its decision to participate in the Medicare program, was required to provide treatment to federal detainees and could only charge for these services at the Medicare rate.

The Court ruled that, since the hospital’s initial decision to join the Medicare program was voluntary, a takings claim based on the reimbursement cap necessarily failed.  As the Court put it, “the Hospital seeks to challenge its rate of compensation in a regulated industry for an obligation it voluntarily undertook (namely, providing emergency treatment to federal detainees) when it opted into Medicare.”  The Court concluded that the Takings Clause was “not the proper vehicle” for challenging the reimbursement rate and, “[a]s is so often the case, the Hospital’s most effective remedy may lie with Congress rather than the courts.”