Hospital association sues over confiscated Medicaid funds

The Washington State Hospital Association (WSHA) is suing the state in order to prevent the diversion of $260 million in funds earmarked for the Medicaid and Apple Fund programs, the association announced.

The litigation could potentially have ripple effects elsewhere because Washington's hospitals raised the money by levying a tax on itself--a practice followed in California and other states.

The suit, filed in King County (Seattle) Superior Court, asks for the funds to be restored to the hospitals.

"We are going to court reluctantly. In 2010 our state's hospitals voluntarily agreed to tax themselves to maintain our health care system," said WSHA President and CEO Scott Bond in a news brief. "The tax was substantial--more than a quarter of a billion dollars in the last biennium. Now the state diverted that money and is using it for purposes that were never intended."

He added, "The legislature is violating an agreement we reached only one year ago. The consequences to the health care system are very serious, and we are confident this misguided and unconstitutional action will be reversed by the courts."

For more:
- read the WSHA news brief