- Saint Catherine Hospital of Indiana, LLC v. Indiana Family and Social Services Administration, Case Nos. 14-2420 and 14-2546 (7th Cir., Aug. 28, 2015) (per curiam)
- Reversed the U.S. District Court for the Southern District of Indiana; held that the statutorily-imposed Hospital Assessment Fee ("HAF") for fiscal year 2013 collected by the Indiana Family and Social Services Administration ("FSSA") that was calculated in 2012 was a pre-petition claim and subject to the automatic stay.
- Procedural context:
- The debtor-hospital filed an adversary complaint against the Indiana Family and Social Services Administration ("FSSA") claiming, inter alia, that the Hospital Assessment Fee ("HAF") for fiscal year 2013 was a pre-petition claim subject to the automatic stay. The Bankruptcy Court agreed with the debtor, and the District Court reversed, finding that the 2013 HAF was a post-petition claim.
- Indiana statute required certain hospitals, including the debtor, to pay an annual Hospital Assessment Fee ("HAF") to the Indiana Family and Social Services Administration ("FSSA") as part of a program to increase Medicaid reimbursements. When the debtor filed for bankruptcy under Chapter 11 on June 19, 2012, it had received assessments for HAFs for fiscal years 2012 and 2013, and the FSSA had begun withholding Medicaid reimbursements in order to collect overdue HAF payments for fiscal year 2012. On July 1, 2013, the FSSA began withholding Medicaid reimbursements to recover the HAF amounts due for fiscal year 2013. In order to make its ruling, the Seventh Circuit applied the "conduct test," in which the date of a claim is determined by the date of the conduct giving rise to that claim. The Court noted: "under most circumstances, finding that a claim arose 'at the earliest possible' will best serve the policy goals underlying the bankruptcy process." (*10, citation omitted.)
- Bauer, Flaum, and Williams, Circuit Judges
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