Hospital coalition sues to block Medicaid limits

A coalition representing most of the hospitals in the U.S. has filed suit to block the enactment of new CMS regulations that would set limits on Medicaid payments. Congress had put a hold on these regulations previously, but that moratorium expires in late May. Now, the hospitals would like to see the regs blocked permanently.

The regs, which would require that Medicaid reimbursement doesn't exceed the cost of providing care, would make it very hard for hospitals with high volumes of such patients to offset the expense of caring for them, coalition members said. Many hospitals treating high volumes of the poor would lose big dollars if the change goes through. For example, Alameda County Medical Center of Oakland, CA would lose $85 million to $100 million per year from its operating budget, or about 20 percent of revenue, which might force it to cut trauma care, AIDS clinics and outpatient substance abuse and psychiatric treatment.

Federal authorities, for their part, note that the GAO has recommended this change since 1994, and that the existing situation merely inflates federal Medicaid payments without expanding the states' responsibility.

To learn more about the suit:
- read this Associated Press piece

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