Sequestration cuts — a 2 percent across-the-board cut in Medicare provider payments — took effect in April 2013 under the Budget Control Act of 2011. In October of last year, Highmark informed hospitals it was going to cut payments by 2 percent as part of sequestration.
The issue in the lawsuit is whether Highmark is permitted to pass along the 2 percent reduction.
In their lawsuit, the hospitals allege Highmark has been improperly under-reimbursing them by 2 percent for Medicare Advantage patients since the beginning of 2014, which is a breach of contract, as none of Highmark’s contracts with the hospital permit the reduction, according to the report
However, Highmark has defended its action and said insurers across the country are passing along the sequestration cuts to healthcare organizations, according to the report.
The lawsuit was filed in the Allegheny County Court of Common Pleas by the following hospitals: Butler (Pa.) Memorial; Conemaugh Memorial Medical Center in Johnstown, Pa.; Greensburg, Pa.-based Excela Health; New Castle, Pa.-based Jameson Health; St. Clair Hospital in Pittsburgh; Windber (Pa.) Hospital; Washington (Pa.) Hospital; and Indiana (Pa.) Regional Medical Center.
More articles on healthcare industry lawsuits:
7 latest healthcare industry lawsuits, settlements
HCA faces class-action lawsuit over 2011 IPO
Banks Jackson Commerce Medical Center, cardiologist pay $500k for alleged Anti-Kickback, Stark Law violations
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
