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Friday, August 28, 2015

Ind. Decisions - 7th Circuit decides one Indiana case today, a reversal

In Saint Catherine Hospital v. Indiana Family and Social Serv (SD Ind., Barker), an 11-page opinion, Judge Williams writes:

St. Catherine Hospital had to pay a Hospital Assessment Fee (“HAF”) as part of an Indiana program designed to increase Medicaid reimbursements to eligible hospitals. St. Catherine was required to pay its HAF in two installments, but after it failed to pay its HAF, the Indiana Family and Social Services Administration (“FSSA”) began withholding Medicaid reimbursements. On June 19, 2012, St. Catherine filed for bankruptcy under Chapter 11. After this date, FSSA continued to withhold reimbursements in satisfaction of St. Catherine’s HAF debt.

St. Catherine filed an adversary complaint against FSSA claiming that the HAF was a pre-petition claim subject to the automatic stay. The bankruptcy court granted St. Catherine summary judgment on this claim, ruling the HAF was an “act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case” pursuant to 11 U.S.C. § 362(a)(6) and was subject to the automatic stay. FSSA was ordered to repay St. Catherine the full amount it had withheld. FSSA appealed to the district court, which reversed the bankruptcy court’s judgment as to the HAF for fiscal year 2013 (the “2013 HAF”). St. Catherine now appeals, arguing the 2013 HAF, like the 2012 HAF, is a pre-petition claim subject to the automatic stay. We agree and reverse the decision of the district court.

Posted by Marcia Oddi on August 28, 2015 11:30 AM
Posted to Ind. (7th Cir.) Decisions