14 hospitals, systems sue HHS over graduate medical education payments

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A group of 14 hospitals and health systems, including Michigan Medicine in Ann Arbor and Hospital for Special Surgery in New York City, is suing HHS over a calculation used to determine payments for physician training programs, according to court documents.

In the July 26 lawsuit, the hospitals claim they have been underpaid for several years due to a regulation implemented by HHS.

The regulation at the center of the lawsuit changed the weight assigned to full-time equivalent residents and fellows in the calculation to determine direct graduate medical education payments. Under the regulation, if a resident's training time exceeds the number of years designated as the "initial residency period," the resident's time is weighted at 0.5. Additionally, the regulation established a cap on the number of full-time equivalents that a hospital may claim in a given fiscal year.

The plaintiffs argue the regulation decreased the number of residents they may claim and therefore reduced the payments.

The plaintiffs are asking the court to invalidate the regulation, recalculate their direct graduate medical education payments and pay attorneys fees, among other requests.

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