The GW Hospital is suing Secretary of Health and Human Services Alex Azar, alleging that his department has shortchanged the hospital with Medicare funding.

In a 17-page complaint filed in the U.S. District Court for D.C. Thursday, the hospital alleges that Azar improperly penalized the hospital by withholding Medicare funding because the hospital trained too many fellows. The hospital claims Azar’s department violated both the Social Security Act, which includes the statute establishing Medicare, and the Administrative Procedure Act, which governs the way federal agencies create regulations, according to the complaint.

GW Hospital spokeswoman Susan Griffiths did not immediately return a request for comment.

The complaint states that under the Medicare program, the federal government reimburses hospitals both for costs they incur in treating Medicare beneficiaries and for Medicare’s share of hospitals’ direct graduate medical education, or DGME, costs, up until the reimbursement reaches the statutory cap.

Many hospitals train fellows, physicians continuing their medical education beyond the length of time needed for certification from a board, which are part of DGME costs, the complaint states. The Medicare program reimburses hospitals for Medicare’s share of DGME costs for fellows but at a discount, according to the complaint.

The hospital alleges that a new regulation issued by the U.S. Department of Health and Human Services violates the “plain meaning” of the Medicare statute by reducing the Medicare reimbursement to hospitals operating at the cap proportional to the number of additional fellows the hospital is training, rather than leaving the reimbursement at the cap, according to the complaint.

“Under the Medicare statute, GWU Hospital should be reimbursed for its costs in training fellows to the full extent permitted by the statutory cap,” the complaint states. “But under the Secretary’s fellow penalty regulation, the Medicare program actually reduced GWU Hospital’s direct graduate medical education programs reimbursement for each fellow it trains.”

The hospital seeks the invalidation of the regulation and the “proper calculation” of Medicare funding owed to it by the federal government in fiscal year 2015, the financial period in question, according to the complaint.

“If a hospital is training residents in excess of its cap, and some of its residents are fellows, under the regulation each fellow the hospital reports in excess of its cap will actually reduce its overall DGME reimbursement,” the complaint states. “That is, the regulation inexplicably imposes a ‘fellow penalty.’”

Azar’s office did not immediately return a request for comment.