Court: HHS miscalculated hospital DSH payments

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The U.S Department of Health & Human Services will recalculate disproportionate share hospitals (DSH) payments for more than 100 hospitals, as well as pay interest on any additional amounts owed, according to an order from the U.S. District Court for the District of Columbia.

Last week, U.S. District Judge Emmet Sullivan ordered two cases be vacated and remanded to HHS for recalculation of reimbursement amounts for healthcare services rendered to low-income patients.

According to the judge, the additional proceedings must be consistent with Northeast Hospital Corp. v. Sebelius, in which the agency's decision to exclude Medicare Advantage patient days from the Medicaid fraction of DSH calculations prior to Oct. 1, 2004, violates the rule against retroactive rulemaking, AHA News Now reported.

The order represents a small win for hospitals and providers in their ongoing fight against retroactive rulemaking. California also claimed a victory last month, when a federal appeals court ruled the state can cut Medicaid provider reimbursements by 10 percent and those cuts can be applied retroactively to June 1, 2011.

The California court's decision also could have a ripple effect on other states planning to expand their Medicaid programs in the wake of the Affordable Care Act, FierceHealthFinance previously reported.

When it comes to DSH payments, the federal government is no stranger to miscalculations. Thanks to some bad math, five New Jersey hospitals that did not qualify for DSH payments received more than $100 million from the Medicare program.

For more:
- read the AHA News Now brief
- here's the order (.pdf)

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