4 hospitals sue HHS seeking to invalidate Medicare supplemental pay ruling

Four hospitals, including Emory University Hospital Midtown in Atlanta, are suing HHS, hoping to invalidate a CMS ruling that they say hinders their ability to contest the amount of disproportionate share hospital payments they received.

The complaint, filed May 24 in the U.S. District Court for the District of Columbia, argues against CMS ruling 1739-R, which requires the Provider Reimbursement Review Board to remand certain DSH payments challenges to a Medicare contractor. The CMS ruling only applies to appeals involving the Medicare Part C days component of DSH calculations.

"Under this Ruling, the pertinent administrative appeals tribunal must remand each qualifying appeal to the appropriate Medicare contractor," according to the 2020 CMS rule. "CMS and the Medicare contractors will calculate DSH payment adjustments on remand in accordance with CMS’s forthcoming rule."

The plaintiff hospitals say that the CMS ruling "unilaterally, arbitrarily, and otherwise unlawfully" renders proper appeals moot and remands them for recalculation using criteria set by a proposed rule that has not been finalized, among other claims. 

"[The CMS] Ruling deprives the right of the hospitals to challenge the DSH payments at issue and seek statutory interest," the suit alleges. "Although the hospitals will have the separate right to challenge the final rule, the hospitals may not be able to pursue that challenge with regard to the payments at issue, which the hospitals have the statutory right to appeal."

Without a legal stop to the ruling, the hospitals say they "will suffer economic harm because their DSH payment will likely be lower than those to which they are entitled under the law."

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