48 hospitals lose legal challenge over DSH payments

A district court judge ruled against 48 hospitals that sued HHS over a change in how it determined disproportionate share hospital payments. 

Specifically, the lawsuit centered on HHS' decision to rely on worksheet S-10, a specific data report, to calculate a hospital's uncompensated care and resulting reimbursement for serving a large portion of low-income patients. 

The hospitals claimed that they had their worksheet S-10 audited in fiscal year 2015 and that the audits resulted in changes that "reduced or otherwise altered the amounts of payments made by CMS." 

The hospitals took their initial complaint to a CMS administrative review board, which sided with HHS.

The hospitals then turned to the court for a ruling. The 48 hospitals argued in a 2020 lawsuit that "the inappropriate data has eviscerated the purpose of assisting hospitals who treat a disproportionate amount of indigent patients."

However, Chief Judge Beryl Howell of the U.S. District Court for the District of Columbia on Aug. 30 also sided with HHS. The judge said a specific portion of the Medicare Act prohibits administrative and judicial review of how the department arrived at its calculations.

"​​Where the ultimate relief sought is recalculation of the estimates used to determine DSH payments — which are themselves precluded from review — the statute precludes review regardless of whether the challenge is characterized as substantive or procedural, or whether the estimates themselves are directly challenged," the judge's opinion reads.

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