CMS pushes back against Missouri ruling on Medicaid DSH payments

Kelly Gooch -

CMS is challenging a Missouri judge's decision to ban the agency from using a 2017 final rule and two Frequently Asked Questions documents to determine Medicaid Disproportionate Share Hospital payments, according to the American Hospital Association.

The case, initially brought by the Missouri Hospital Association, stems from a final rule CMS issued in March 2017. Under the hospital-specific DSH limit, federal financial participation is limited to a hospital's uncompensated care costs. The final rule stipulated uncompensated care costs include only those costs for Medicaid-eligible individuals that remain after accounting for payments made to hospitals by or on behalf of Medicaid-eligible individuals, including Medicare and other third-party payments.

In February 2018, the U.S. District Court in Missouri permanently barred CMS from enforcing the final rule and two Frequently Asked Questions documents that included private insurance and Medicare payments in determining Medicaid DSH payments, according to the AHA. U.S. District Judge Brian Wimes concluded the Medicaid Act was "unambiguous that the calculation of a DSH hospital's HSL [hospital-specific limit] does not involve consideration of private insurance or Medicare payments, and a DSH hospital's total uncompensated costs of care for calculating the HSL is reduced only by the total of other Medicaid program payments."

A federal court in Washington, D.C., subsequently voided the final rule in March 2018, and the final rule does not apply at a national level, according to the AHA. The federal government can still appeal in that case.

Ayla Ellison and Morgan Haefner contributed to this report.

 

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