488 U.S. 204 (1988)
Bowen v. Georgetown University Hospital is the modern cornerstone for the proposition that federal agencies cannot impose retroactive legislative rules unless Congress has clearly and expressly authorized them to do so.
Does the Secretary of Health and Human Services have statutory authority to promulgate a Medicare reimbursement regulation with retroactive effect, thereby altering payment obligations for past cost-reporting periods, absent an express grant of such authority from Congress?
Retroactivity is disfavored; agencies may not impose retroactive legislative rules absent express statutory authorization. Medicare's "retroactive corrective adjustments" provision permits provider-specific accounting true-ups, not global retroactive rulemaking.
No. HHS lacked authority to promulgate a retroactive Medicare reimbursement regulation. The 1984 rule's retroactive application was invalid because Congress had not clearly authorized retroactive rulemaking; the Medicare Act's "retroactive corrective adjustments" language did not furnish such authority.
Bowen is the leading case barring retroactive legislative rulemaking absent an express statutory grant. It entrenches a clear-statement rule for agency retroactivity, fortifies reliance interests, and prevents agencies from using retroactivity to cure prior rulemaking defects or to recoup payments after judicial invalidation of earlier rules. The decision also clarifies the difference between agency adjudication (where some retroactive application of new principles may be permissible) and rulemaking (which is inherently prospective unless Congress says otherwise). For law students, Bowen is essential for understanding the interaction among the APA, statutory interpretation, separation of powers, and the presumption against retroactivity.