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Appeal from the United States District Court For the Western District of Texas

Sid Peterson Memorial Hospital (SPMH) appeals the district court’s grant of summary judgment in favor of Tommy Thompson, acting in his official capacity as the Secretary of Health and Human Services (the “Secretary”). SPMH filed this case is federal court pursuant to Title XVIII of the Social Security Act, 42 U.S.C. � 1395oo(f)(1), challenging the Secretary’s decision denying the hospital’s claim for reimbursement of interest expenses on certain capital indebtedness attributable to the purchase of its hospital facility on various grounds. The district court ruled that the interest expenses incurred by SPMH were not “proper,” and therefore not reimbursable, because the hospital borrowed the underlying capital from the Hal and Charlie Peterson Foundation (the “Foundation”), a related-party as defined by the Medicare Regulations. We hold that the �� 413.153 and 413.17 of the Medicare Regulations, defining related-parties and control, are consistent with the text of the Medicare statute. We also hold that the Secretary’s interpretation of these regulations was reasonable and that substantial evidence supported his determination that the loan from the Foundation to SPMH for the purchase of the hospital facilities was a related-party transaction. In addition, we conclude that there is no equitable exception to the denial of reimbursement under the Medicare regulations.

I.

 
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