Texas, Pennsylvania hospitals lose lawsuit challenging Medicare payments

A federal court has dismissed a lawsuit filed by two hospitals against HHS challenging the constitutionality of adjustments made to Medicare payments. 

The lawsuit was brought by Moses Taylor Hospital in Scranton, Pa., and Tomball (Texas) Regional Center. The hospitals said HHS wrongly calculated their Medicare disproportionate share hospital payments for fiscal year 2015, using the wrong data. As a result, the hospitals appealed the DSH payment decision to the HHS provider reimbursement review board, where it was dismissed. In its dismissal, the review board said it lacked jurisdiction to consider the hospitals' objections to their payments.

Moses Taylor Hospital and Tombell Regional then sued HHS, alleging the dismissal of the appeal violated the Constitution and that the board does have jurisdiction under the statute.

In a Jan. 8 opinion, the U.S. District Court for the District of Columbia found that the HHS board lacked jurisdiction to consider the hospitals' objections to their payments, and thus properly dismissed their request for review. It also dismissed the hospital's constitutional challenge for failure to state a claim. 

"Given the insufficiency of the allegations concerning the deprivation of a liberty or property interest, the Court need not address the question of the nature of the process that would have been due, and Count II will be dismissed for failure to state a claim," the court opinion reads.

More articles on legal and regulatory issues:
115 hospitals sue HHS over Medicare payment calculation
Physician's False Claims Act suit against Mississippi hospital rejected
3 Tennessee providers pay $1.7M to settle false claims allegations 

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