MemorialHospital and Singing River Health System in Pascagoula, Miss., have filed suit against the Mississippi Division of Medicaid, claiming that there is a fundamental flaw in the Medicaid reimbursement formula Medicaid used to pay hospitals for healthcare services.
According to a statement released Wednesday, the health systems claim the payment formula used to calculate reimbursement for services provided to uninsured patients and Medicaid beneficiaries underpaid them by more than $20 million in 2016. The lawsuit seeks to recover those funds and change the existing distribution formula.
"In their current form, Medicaid payments as well as prior formulas for indigent care have created a scenario of winners and losers with funds unevenly distributed among providers," Kevin Holland, CEO of SRHS, said in the prepared statement.
The Mississippi Division of Medicaid released a statement in response to the lawsuit. "Medicaid is a key component to healthcare access across the state. The agency follows state law and federal regulations set forth in the state plan, which is approved by CMS."