HHS Owes Millions in Adjusted Medicare DHS Payments to Hospitals: Lawsuit

Dozens of safety-net hospitals owe hundreds of millions of dollars to the federal government for alleged delays in fixing Medicare Disproportionate Share hospital payments, the hospitals allege in a new lawsuit.

About four dozen hospitals in California, Arizona, Nevada, Hawaii and Minnesota filed a lawsuit Tuesday in Washington, D.C., federal court against Secretary of the Department of Health and Human Services Javier Becerra. While regulators acknowledged in 2010 that the DSH payment calculations were incorrect, HHS has delayed revised payments, the hospitals allege.

The complaint alleges, “The agency’s undue delay has cost Plaintiff Hospitals hundreds of millions of dollars in funds that should have been paid to them many years ago for higher costs of treating low-income patients.” ,

HHS did not immediately respond to a request for comment.

dsh payment Intended to offset expenses incurred by hospitals that primarily serve low-income patients. Following a 2008 ruling by a Washington, D.C., federal court that upheld a Massachusetts hospital’s challenge to its DSH payment method, HHS required HHS to send DSH payment appeals to the agency’s contractors who were tasked with making the hospitals complete .

But the agency’s contractors have not calculated those payment reschedulings nor paid any hospitals, the complaint alleges.

The hospitals’ lawsuit alleges that HHS improperly used a related lawsuit as justification for delaying revised payments. Minneapolis-based Allina Health Services filed a lawsuit against HHS in 2010 that focused on the use of Medicare Advantage patients in DSH payment calculations and related rule-making efforts. In 2019, the Supreme Court ruled in favor Of hospitalOrdering HHS to vacate the law and a more thorough process of notice-and-comment rulemaking.

According to the complaint, the Centers for Medicare and Medicaid Services said it did not complete the proper public notification process and thus delayed the revised payments.

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