Hospitals sue gov't over 5% state Medicaid cuts

Arizona's leading lobby for hospitals has filed suit against the U.S. Department of Health & Human Services and the state for approving recent cuts in Medicaid payments, reports The Arizona Republic.

The lawsuit, filed by the Arizona Hospital and Healthcare Association, is seeking to halt a 5 percent reduction in payments to hospitals approved by the Centers for Medicare & Medicaid Services late last month that will be applied retroactively to Oct. 1. That cut follows a similar 5 percent reduction enacted in April. Payment rates had previously been frozen for three years.

"We're asking the court to prevent an [Arizona Health Care Cost Containment System] cut that will otherwise force hospitals to attempt to shift costs to the purchasers of private health insurance," Laurie Liles, president and CEO of the Arizona Hospital and Healthcare Association, said in a statement. "The cost shift amounts to a hidden health-care tax on all consumers.

Attorneys argue that enacting the latest cut would mean Medicaid providers could no longer guarantee equal access to services and would therefore violate federal law. Peter Wertheim, vice president with the hospital association, claimed its members would be receiving just two-thirds of what it costs to provide care, according to the East Valley Tribune.

To learn more:
- read the Arizona Republic article
- read the East Valley Tribune article