In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
Nos. 14-2420 & 14-2546
SAINT CATHERINE HOSPITAL OF INDIANA, LLC,
                                       Plaintiff-Appellant,

                                 v.

INDIANA FAMILY AND SOCIAL SERVICES ADMINISTRATION,
                                      Defendant-Appellee.
                    ____________________

        Appeals from the United States District Court for the
        Southern District of Indiana, New Albany Division.
          No. 4:13-cv-183 — Sarah Evans Barker, Judge.
                    ____________________

   ARGUED JANUARY 21, 2015 — DECIDED AUGUST 28, 2015
                ____________________

   Before BAUER, FLAUM, and WILLIAMS, Circuit Judges.
    WILLIAMS, Circuit Judge. St. Catherine Hospital had to pay
a Hospital Assessment Fee (“HAF”) as part of an Indiana
program designed to increase Medicaid reimbursements to
eligible hospitals. St. Catherine was required to pay its HAF
in two installments, but after it failed to pay its HAF, the In-
diana Family and Social Services Administration (“FSSA”)
began withholding Medicaid reimbursements. On June 19,
2012, St. Catherine filed for bankruptcy under Chapter 11.
2                                      Nos. 14-2420 & 14-2546

After this date, FSSA continued to withhold reimbursements
in satisfaction of St. Catherine’s HAF debt.
    St. Catherine filed an adversary complaint against FSSA
claiming that the HAF was a pre-petition claim subject to the
automatic stay. The bankruptcy court granted St. Catherine
summary judgment on this claim, ruling the HAF was an
“act to collect, assess, or recover a claim against the debtor
that arose before the commencement of the case” pursuant
to 11 U.S.C. § 362(a)(6) and was subject to the automatic stay.
FSSA was ordered to repay St. Catherine the full amount it
had withheld. FSSA appealed to the district court, which re-
versed the bankruptcy court’s judgment as to the HAF for
fiscal year 2013 (the “2013 HAF”). St. Catherine now appeals,
arguing the 2013 HAF, like the 2012 HAF, is a pre-petition
claim subject to the automatic stay. We agree and reverse the
decision of the district court.
                     I. BACKGROUND
    St. Catherine is a regional health care facility in
Charlestown, Indiana. The hospital is classified as a general
acute care facility, which treats Medicare and Medicaid pa-
tients. Like other hospitals in the state, it receives reim-
bursement from the state and federal governments for its
treatment of Medicaid patients. Specifically, the U.S. De-
partment of Health and Human Services Center for Medi-
care and Medicaid Services (“CMS”) provides two dollars of
funding for every one dollar provided by the state govern-
ment.
   On April 29, 2011, Indiana’s General Assembly adopted
Public Law 229–2011, Section 281 (“Section 281”), a measure
designed to facilitate increased reimbursement for hospitals
Nos. 14-2420 & 14-2546                                                    3

providing care to Medicaid patients. The law provided that
an assessment—known as the Hospital Assessment Fee
(“HAF”)—would be levied on eligible Indiana hospitals to
create a fund from which the state would reimburse those
hospitals for their treatment of Medicaid patients. Under the
law, all eligible hospitals were to be assessed during the “fee
period” running from between July 1, 2011 to June 30, 2013.
This fee was calculated one time, but hospitals were re-
quired to pay their fee in two installments—one for fiscal
year 2012 and the other for fiscal year 2013. The amount each
individual hospital was to contribute to the fund was deter-
mined based upon the hospital’s cost reports from May 1,
2010 to April 30, 2011, and other financial information on file
as of February 28, 2012.
    Collection of the HAF could not commence until the pro-
gram received approval from the federal government. CMS
issued its approval of Section 281 on May 21, 2012. The next
day, FSSA issued Provider Bulletin BT201217 to all Indiana
hospitals informing them of the timeline that would govern
the HAF assessments and the agency’s collection methods.1
Thereafter, FSSA began assessing the HAF on hospitals, ret-
roactively dated to July 1, 2011.
    St. Catherine was subject to a HAF. Based on the hospi-
tal’s cost reports, the FSSA determined that it owed
$1,107,038.51 for fiscal year 2012 and roughly the same
amount for fiscal year 2013. On May 29, 2012, FSSA sent St.
Catherine the bill for fiscal year 2012. FSSA then began
withholding Medicaid reimbursements from St. Catherine to


    1This bulletin is available at http://provider.indianamedicaid.com/
ihcp/Bulletins/BT201217.pdf (last visited July 17, 2015).
4                                      Nos. 14-2420 & 14-2546

recover the approximately $1.1 million that St. Catherine
owed retroactive to July 1, 2011.
    On June 19, 2012, St. Catherine filed a voluntary petition
for relief under Chapter 11 of the Bankruptcy Code. After
this date, FSSA continued its withholdings in service of St.
Catherine’s fiscal year 2012 HAF debt for two more weeks.
On July 28, 2012, FSSA issued St. Catherine a bill for fiscal
year 2013, totaling $1,127,296.44. Again, the hospital did not
pay. As a result, after July 1, 2013, FSSA began withholding
Medicaid reimbursements in satisfaction of this debt as well.
All told, FSSA withheld $989,738.78 in satisfaction of the fis-
cal year 2013 HAF. These withholdings were made after St.
Catherine had filed its bankruptcy petition.
    On March 14, 2013, St. Catherine filed an adversary com-
plaint against FSSA seeking an injunction against further col-
lection of the HAF and recovery of sums withheld by FSSA
both before and after its Chapter 11 filing. The bankruptcy
court granted St. Catherine’s motion for a preliminary in-
junction and issued an order enforcing the automatic post-
petition stay. St. Catherine then moved for summary judg-
ment, seeking recovery of the $615,912.64 withheld by FSSA
before its bankruptcy petition in service of the fiscal year
2012 HAF and the $989,738.78 withheld post-petition in ser-
vice of the fiscal year 2013 HAF. The bankruptcy court ulti-
mately granted St. Catherine summary judgment on all of its
claims, ruling that the pre-petition withholdings constituted
preference payments under 11 U.S.C. § 547 and were not
subject to the exemption for payments made in the ordinary
course of business. As to the post-petition withholdings, the
court concluded that both the 2012 and 2013 HAFs constitut-
ed “act[s] to collect, assess, or recover a claim against the
Nos. 14-2420 & 14-2546                                            5

debtor that arose before the commencement of the case”
pursuant to 11 U.S.C. § 362(a)(6), and were thus subject to
the automatic stay. FSSA was ordered to repay St. Catherine
the full amount it had withheld. FSSA appealed to the dis-
trict court, which affirmed as to other causes of action, but
reversed the bankruptcy court’s judgment as to the fee im-
posed for fiscal year 2013, deeming it a post-petition claim.
This appeal followed.
                         II. ANALYSIS
   A.     The Automatic Stay and the Conduct Test
    The “automatic stay” is a statutory injunction against ef-
forts outside of bankruptcy to collect debts from a debtor
who is under the protection of the bankruptcy court. 11
U.S.C. § 362. It bars any “act to collect, assess, or recover a
claim against the debtor that arose before the commence-
ment of the case.” 

362(a)(6). At issue in this appeal is
whether the 2013 HAF constitutes a “claim” against St.
Catherine that arose prior to the commencement of its bank-
ruptcy, and is therefore subject to the automatic stay.2 We
review the district court’s finding on this question de novo. In
re Davis, 

, 553 (7th Cir. 2011).
    There is no dispute that the 2013 HAF is a “claim.” The
Bankruptcy Code (the “Code”) defines a “claim” as any
“right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, ma-
tured, unmatured, disputed, undisputed, legal, equitable,
secured, or unsecured.” 11 U.S.C. § 101(5)(A). What we must


   2 It is undisputed that the 2012 HAF (for the period July 1, 2011
through June 30, 2012) is a pre-petition claim.
6                                       Nos. 14-2420 & 14-2546

determine then is the date on which the 2013 HAF arose for
purposes of classifying it as a pre- or post-petition claim. To
make this determination, virtually all courts now apply
some version of the “conduct test.” Under this approach, the
date of a claim is determined by the date of the conduct giv-
ing rise to the claim. See Watson v. Parker (In re Parker), 

, 1269 (10th Cir. 2002) (ruling malpractice claim
arose on date malpractice allegedly occurred); Grady v. A.H.
Robins Co., 

, 203 (4th Cir. 1988) (ruling tort claim
arose on date tortious conduct allegedly occurred). By con-
trast, under the outmoded “accrual theory,” the date of a
claim was determined pursuant to the state law under which
liability for the claim arose. See In re Grossman's Inc., 

, 119–121 (3d Cir. 2010) (overruling accrual test under
which “the existence of a valid claim depends on: (1) wheth-
er the claimant possessed a right to payment; and (2) when
that right arose as determined by reference to the relevant
non-bankruptcy law”) (citations omitted).
    Because the conduct test includes both contingent and
unmatured claims, it is thought to be in accordance with the
broad definitions of “debt” and “claim” in the Code. See Par-

(adopting conduct test over accrual test
as “the one more in tune with the plain language and the
policy underlying the Bankruptcy Code”); 

(“[T]he legislative history shows that Congress intended
that all legal obligations of the debtor, no matter how remote
or contingent, will be able to be dealt with in bankruptcy.”);
see also 11 U.S.C. § 101(12) (defining “debt” as “liability on a
claim”); 

101(5)(A). Some courts, however, expressing
concern that the conduct test may be overly broad, require a
“prepetition relationship” between the parties, “such as con-
tact, exposure, impact, or privity, between the debtor’s prep-
Nos. 14-2420 & 14-2546                                         7

etition conduct and the claimant.” In re Piper Aircraft Corp.,

, 627 (Bankr. S.D. Fla. 1994) aff’d, 

(S.D. Fla. 1994), aff’d as modified sub nom. Epstein v. Official
Comm. of Unsecured Creditors of Estate of Piper Aircraft Corp.,

(11th Cir. 1995). This pre-petition relationship
requirement “ameliorates the problem often attributed to the
conduct test—that a bankruptcy proceeding cannot identify
and afford due process to claimants” with unmatured or
contingent claims. In re 

(citing
Barbara J. Houser, Chapter 11 as a Mass Tort Solution, 31 LOY.
L.A. L.REV. 451, 465 (1998). While we have never explicitly
endorsed any approach, bankruptcy courts in this jurisdic-
tion commonly apply the conduct test, see e.g., In re Papi, 

, 465–66 (Bankr. N.D. Ill. 2010); In re Bonnett, 

, 127 (Bankr. C.D. Ill. 1993), and we adopt it today. We
decline to decide whether a pre-petition relationship is al-
ways required, but note that the parties here had one.
   B.     2013 HAF Subject to Automatic Stay
    With this in mind, we turn to the claim at issue in this
appeal. The parties agree that the conduct test should apply;
however, they quarrel over what conduct gave rise to the
2013 HAF. St. Catherine characterizes the relevant conduct
as Indiana’s enactment of Section 281, CMS’s approval of
that law, and the meeting of the state’s hospital assessment
fee committee for purpose of calculating the HAF. All of this
conduct occurred before the hospital’s petition for bankrupt-
cy was filed on June 19, 2012. St. Catherine also emphasizes
that the calculation of its HAF (for both 2012 and 2013) was
based entirely on cost reports produced on or before Febru-
ary 28, 2012, well before the bankruptcy filing.
8                                              Nos. 14-2420 & 14-2546

    FSSA characterizes the conduct giving rise to the 2013
HAF as St. Catherine’s continued operations as an eligible
hospital under Section 281 until July 1, 2012. It argues that
pursuant to Provider Bulletin BT201217, any hospital that
ceased its operations or failed to qualify as an “eligible hos-
pital” prior to July 1, 2012 (the first day of the 2013 HAF as-
sessment period) would not be liable for the 2013 HAF.3
Based on this, FSSA concludes that its claim for the 2013
HAF arose on July 1, 2012.
    The determination of what conduct gives rise to a claim
will vary depending on the nature of the liability, be it tort,
contract, or tax. See Matter of Chicago, Milwaukee, St. Paul &
Pac. R. Co., 

, 781 (7th Cir. 1992). The difficulty
here is that the HAF does not fit neatly into any of these cat-
egories. St. Catherine submits that Section 281 “is the func-
tional equivalent of a two-year contract between the FSSA
and the Debtor.” Since contractual liability is generally
thought to arise on the date a contract is signed, see In
re Rosteck, 

, 696 (7th Cir. 1990) (post-petition as-
sessments were to be treated as pre-petition debts where
they emanated from pre-petition contract between debtor
and condominium association), St. Catherine concludes that
the HAF liability arose on the date Section 281 was passed
(or, at the latest, approved by CMS). Of course, the contract


    3 Provider Bulletin BT201217 explains that only those hospitals li-
censed under Indiana Code § 16-21-2 are eligible to pay the HAF fee and
advises that any hospital that loses its eligibility must notify the state
agency within 30 days. Based on this, the district court found that alt-
hough the Bulletin does not say so explicitly, if St. Catherine had ceased
to be an eligible acute care hospital before July 1, 2012, it would not have
been subject to the 2013 HAF.
Nos. 14-2420 & 14-2546                                        9

analogy fails for various reasons, the most obvious being
that St. Catherine played no role whatsoever in the legisla-
tive process that gave rise to Section 281.
    By contrast, FSSA argues that Section 281 was “akin to a
tax” levied annually on eligible hospitals. It furthers this
analogy by pointing out that FSSA issued hospitals separate
bills for fiscal years 2012 and 2013. But this analogy is also
flawed. As FSSA concedes, the HAF is not, in fact, a tax. And
it operated very differently from one. The HAF was not cal-
culated on an annual basis, as are taxes typically. Nor was
the HAF a fundraising device for the state. Rather, it was a
fee imposed on hospitals for the purpose of increasing Medi-
caid reimbursements for those same hospitals.
    Admittedly, the claim at issue here is one that does not
“lend[] itself to governance by formula.” Fogel v. Zell, 

, 962 (7th Cir. 2000). But we are not persuaded by
FSSA’s argument that Section 281 gave rise to two separate
liabilities, one for fiscal year 2012 and the other for fiscal
year 2013. The statute made clear that there was one HAF for
one “fee period,” and that the entire HAF was set pre-
petition. Nor is it of particular significance that FSSA sought
to collect this fee in two installments and issued two sepa-
rate bills. Home loans, for example, are assessed over time,
but that does not mean that a home loan is many individual
debts.
    Here, the 2013 HAF was assessed based upon the activi-
ties reflected in St. Catherine’s cost reports from May 1, 2010
to April 30, 2011, and other financial information on file as of
February 28, 2012. These activities—along with the passage
of Section 281 and CMS’s approval of that law—all occurred
before St. Catherine filed for bankruptcy. Since all of the
10                                      Nos. 14-2420 & 14-2546

conduct that could have given rise to the 2013 HAF occurred
pre-petition, we find that the claim is subject to the automat-
ic stay.
    That St. Catherine’s continued operation as an eligible
hospital on July 1, 2012 may have been required in order for
the 2013 HAF to be assessed does not change our analysis.
This fact would simply make the claim “contingent” upon
the hospital’s continued eligibility on July 1, 2012. A “con-
tingent” claim is one conditioned upon some future event
that is uncertain. See In re 

(quoting

) (defining contingent as “[p]ossible
but not assured; doubtful or uncertain; conditioned upon
some future event which is itself uncertain or question-
able …. impl[ying] that no present interest exists, and that
whether such interest or right will ever exist depends upon a
future uncertain event”). And as noted above, the Code’s
definition of “claim” explicitly includes any “right to pay-
ment, whether or not such right is … contingent” upon some
future event, which may or may not happen after the filing
of a bankruptcy petition. See 11 U.S.C. § 101(5)(A). Thus, as-
suming FSSA’s reading of Provider Bulletin BT201217 is ac-
curate, it would simply mean that had St. Catherine ceased
to be an eligible hospital prior to the beginning of the fiscal
year 2013, a contingency for its 2013 HAF liability would not
have been met. It would not mean that the underlying claim
did not already exist.
   To conclude, we note that under most circumstances,
finding that a claim arose “at the earliest point possible” will
best serve the policy goals underlying the bankruptcy pro-
cess. See Matter of 

. This is because do-
ing so enables the bankruptcy court to bring before it as
Nos. 14-2420 & 14-2546                                         11

many claims against the debtor as possible, and from there
to “equitably distribute property [among the creditors] and
assure the debtor a fresh start.” 

is “little
benefit” to be “gained by allowing a person who knows it
has a claim to pursue the claim outside of bankruptcy or to
sit on the claim until after bankruptcy”). To be sure, there
are exceptions to this rule—mostly notably, where the
claimant is the victim of pre-petition tortious conduct, but
does not realize he or she has been a victim until some harm
manifests after the bankruptcy. In these situations, a court
may be less inclined to conclude that the party had a claim
or contingent claim dischargeable in bankruptcy (i.e., subject
to the automatic stay), because to do so would forever bar
that party from raising the claim against the individual
debtor, reorganized company, or its successors. 

v. Consol. Rail Corp., 

, 940–44 (3d Cir.
1985), cert. denied, 

(1985)). But this exception
does not apply here, as FSSA was aware of its claims against
St. Catherine—for both fiscal years 2012 and 2013—well be-
fore it filed for bankruptcy.
                      III. CONCLUSION
    The judgment of the district court is REVERSED, and this
case is REMANDED for further proceedings consistent with
this opinion.