The federal government owes dozens of safety-net hospitals tens of millions of dollars for alleged delays in correcting Medicare’s disproportionate share of hospital payments, the hospitals accused in a new lawsuit.
Nearly four dozen hospitals in California, Arizona, Nevada, Hawaii and Minnesota filed a lawsuit Tuesday against Health and Human Services Secretary Xavier Becerra in a federal court in Washington, DC. While regulators admitted in 2010 the DSH billing calculations were incorrect, HHS delayed the revised payments, the hospitals allege.
“The agency’s unreasonable delays have cost plaintiff hospitals tens of millions of dollars that should have been paid to them years ago to offset the higher costs they incurred to treat their patients. lower-income patients than a decade ago,” the lawsuit alleges. .
HHS did not immediately respond to a request for comment.
DSH payments are intended to offset costs incurred by hospitals that primarily serve low-income patients. Following a 2008 ruling by a Washington, DC federal court that affirmed the Massachusetts hospital’s challenge to the DSH payment method, HHS was required to submit appeals for DSH payment to the agency’s contractors, who tasked with completing the entire hospital.
But the agency’s contractors did not perform calculations that redefine that payment nor did it pay any hospitals, the complaint alleges.
The hospital’s lawsuit alleges HHS unfairly used a related lawsuit to justify delaying the revised payments. Minneapolis-based Allina Health Services filed a lawsuit in 2010 against HHS, focusing on the use of Medicare Advantage patients in DSH billing calculations and related rule-making efforts. In 2019, the Supreme Court ruled in favor of hospitalasked HHS to repeal the law and implement a more thorough notice and comment rule-making process.
According to the complaint, the Centers for Medicare and Medicaid Services said it had not completed the appropriate public notice process and therefore had to delay the revised payments.
