Califano

MEMORANDUM OF OPINION

This is a suit for mandamus and declaratory relief brought by plaintiff John Muir Memorial Hospital, Inc. (“Muir”), under Title XVIII of the Social Security Act ( 42 U.S.C. §§ 1395 et seq.), the Declaratory Relief Act ( 28 U.S.C. § 2201 ), and the Fifth Amendment. The action is based on defendants’ refusal to allow plaintiff to reopen its 1973 and 1974 “cost reports” to reflect certain interest payments as expenses rather than as capital items.

In 1965, Congress enacted Title XVIII of the Social Security Act, known as Medicare, to provide federal reimbursement for medical care to the aged and disabled. The program provides hospital insurance benefits to eligible individuals who receive hospital services from specially designated “providers.” Plaintiff Muir operates a hospital as defined by 42 U.S.C. § 1395x(e) and is a “provider” by virtue of having filed an agreement with the Secretary of Health, Education, and Welfare (“HEW”) pursuant to 42 U.S.C. § 1395ec(a)(l).

As a provider, plaintiff is entitled to receive reimbursement from the Secretary for the “reasonable cost” of its hospital services. See 42 U.S.C. §§ 1395f(b)(l), 1395x(v)(l)(A). Plaintiff…