                           NOT FOR PUBLICATION

                    UNITED STATES COURT OF APPEALS
                                                                            FILED
                            FOR THE NINTH CIRCUIT
                                                                             JAN 05 2018
                                                                         MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS
VERDANT HEALTH COMMISSION,                       No.   15-35797
DBA Stevens Healthcare, Edmonds,
Washington; et al.,                              D.C. No. 3:14-cv-05108-RBL

              Plaintiffs-Appellants,
                                                 MEMORANDUM*
 v.

ERIC D. HARGAN **, Acting Secretary of
the United States Department of Health
and Human Services,

              Defendant-Appellee.


                   Appeal from the United States District Court
                     for the Western District of Washington
                   Ronald B. Leighton, District Judge, Presiding

                     Argued and Submitted December 8, 2017
                              Seattle, Washington




      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.

      **   Eric D. Hargan is substituted for his predecessor, Kathleen Sebelius,
Department of Health and Human Services. Fed R. App. P. 43(c)(2).
                                                                              Page 2 of 4
Before: TALLMAN and WATFORD, Circuit Judges, and BENITEZ,*** District
Judge.


      1. The Secretary of Health and Human Services properly excluded patients

covered under Washington’s Medically Indigent and General

Assistance-Unemployable (MI/GAU) programs from plaintiffs’ Medicare

reimbursements. In University of Washington Medical Center v. Sebelius, we held

that MI/GAU populations are not “eligible for medical assistance under a State

plan approved under subchapter XIX.” 634 F.3d 1029, 1034 (9th Cir. 2011)

(quoting 42 U.S.C. § 1395ww(d)(5)(F)(vi)(II)). Even if “Medicaid money

indirectly subsidized the medical treatment received by Washington’s GAU and

MI populations, their care still does not meet [the] definition of ‘medical

assistance.’” Id. at 1035. Our decision in University of Washington Medical

Center controls the outcome in this case.

      Contrary to plaintiffs’ argument, University of Washington Medical Center

is reconcilable with Portland Adventist Medical Center v. Thompson, 399 F.3d

1091 (9th Cir. 2005). To be included in the relevant portion of the Medicare

reimbursement calculation, a patient must be “eligible for medical assistance under



      ***
            The Honorable Roger T. Benitez, United States District Judge for the
Southern District of California, sitting by designation.
                                                                            Page 3 of 4
a State plan approved under subchapter XIX.” 42 U.S.C.

§ 1395ww(d)(5)(F)(vi)(II). In Portland Adventist Medical Center, we held that the

phrase “eligible for medical assistance” includes patients covered under

demonstration projects authorized by the Secretary (“§ 1115 expansion

populations”). 399 F.3d at 1096–97. Federal law establishes that the costs for

such projects “shall . . . be regarded as expenditures under the State plan.” Id. at

1096 (quoting 42 U.S.C. § 1315(a)(2)(A)). Because § 1115 expansion populations

are deemed to receive medical assistance under a State plan, we held that they must

be regarded as eligible for medical assistance under a State plan. Id. No similar

federal statute governs MI/GAU patients, as Washington retains complete control

over those programs. MI/GAU patients are therefore legally distinct from § 1115

expansion populations, even if they share certain characteristics. See University of

Washington Medical Center, 634 F.3d at 1034–35 & n.6.

      2. The district court correctly determined that a rational basis supports the

Secretary’s decision to treat § 1115 expansion populations and MI/GAU

populations differently. That the Secretary exerts some amount of control over

§ 1115 demonstration projects and none over Washington’s MI/GAU programs

provides a rational basis for treating the populations differently for purposes of

Medicare reimbursements.
                                                         Page 4 of 4
Plaintiffs’ motion to supplement the record is DENIED.

AFFIRMED.
