Hospitals win back $666M from Medicare

In a deal that marks one of the largest settlements ever paid by the federal government to healthcare providers, CMS has agreed to pay out $666 million to 667 hospitals that sued for back payments. The dispute dates back to shifts in Medicare reimbursement policies from the 1980s. In 1986, the Reagan administration changed reimbursement rules to exclude some low-income patients from disproportionate-share payment calculations. A number of hospitals sued to have the rule changed, and succeeded in 1997. Following the reversal, one hospital sued for back payments for treatment in the 1990s, and eventually attracted a total of 667 hospitals seeking reimbursement as well--most of which were nonprofits treating largely the poor. The hospitals won in federal court, and the federal government lost its appeal, then got rejected for a hearing by the Supreme Court.

To learn more about the case:
- read this piece from The Wall Street Journal (sub. req.)
- read this Modern Healthcare article (reg. req.)

Related Articles:
Hospital coalition sues to block Medicaid limits. Report
AMA fights physician Medicare cuts. Report
Medicare reimbursement policies examined. Report

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.