CMS may owe $3 bil­lion

Pay­ments to set­tle law­suits in Medi­care pay deals

Modern Healthcare - - THE WEEK IN HEALTHCARE - Rich Daly

The CMS is ex­pected to owe at least $3 bil­lion to about 2,200 hos­pi­tals as part of on­go­ing Medi­care un­der­pay­ment set­tle­ment ne­go­ti­a­tions, ac­cord­ing to par­ties in­volved in the deal.

The pay­ments to hos­pi­tals will set­tle sev­eral sim­i­lar years-long fed­eral law­suits in which those providers al­leged CMS of­fi­cials erred in cal­cu­lat­ing pay-rate cuts needed to off­set an in­crease for ru­ral hos­pi­tals re­quired by a 15-year-old law, ac­cord­ing to a CMS of­fi­cial.

The final amount the CMS will pay the hos­pi­tals in­volved in the law­suits may never be known be­cause the agency is not re­quired to re­port it to ei­ther a court or the public, said ex­perts in­volved in the case.

The deal was signed April 5 and all pay­ments are ex­pected by June 30, ac­cord­ing to hospi­tal and CMS of­fi­cials.

The law­suits chal­lenged the man­ner in which the CMS cal­cu­lated the ru­ral floor pro­vi­sion of the Bal­anced Bud­get Act of 1997, which ad­dressed the fed­eral pro­gram’s com­pa­ra­ble ur­ban and ru­ral hospi­tal wage in­dexes within each state. The Dis­trict of Columbia Cir­cuit Court ul­ti­mately agreed with the hos­pi­tals’ po­si­tion in one of those cases, Cape Cod Hospi­tal v. Se­be­lius, that al­leged the CMS in­cor­rectly ap­plied the law’s bud­get neu­tral­ity re­quire­ment to hos­pi­tals’ ru­ral wage in­dex. Hos­pi­tals in­sisted for years that CMS of­fi­cials over­com­pen­sated with cuts to other hos­pi­tals when it tried to off­set the law’s in­creased pay­ments to ru­ral hos­pi­tals

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