North Carolina hospitals sue over DSH payments

Seven North Carolina providers are suing the federal government over the Affordable Care Act's (ACA) cuts to disproportionate share hospital (DSH) payments, according to the Triad Business Journal.

The ACA altered the DSH payment model, tying the reimbursements to each hospital's share of uncompensated care within a national pool. The law was written with the assumption that Medicaid expansion would offset any cuts, but many states, including North Carolina, have refused to expand their programs.

The hospitals dispute the payments they received, claiming in the lawsuit that they should have received larger amounts under the revised formula. The organizations filed an appeal of payments with the lawsuit, claiming Health and Human Services Secretary Sylvia Mathews Burwell provided insufficient access to data used to calculate the new payments and information on CMS' methodology

In a statement to the press about the lawsuit. Greensboro's Cone Health said that because of the "vague and general drafting of legislation, and the ACA in particular, [the Centers for Medicare & Medicaid Services] is given discretion over a lot of technical calculations that can have a large impact on provider payments." The organization claims in the lawsuit it is owed $2.2 million. 

"As we understand it, CMS' goal is to interpret these calculations in a way that minimizes Medicare outlays. This means that healthcare systems, as a routine matter, challenge these interpretations to ensure transparency, rigor, and a collective provider voice in these determinations. And the vehicle to do this is typically group appeals such as this."

In addition to Cone Health, the plaintiffs include Wilkes Regional Medical Center; Scotland Memorial Hospital; Stanley Regional Medical Center; Cleveland Regional Medical Center; Kings Mountain Hospital; and Carolinas HealthCare System.

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