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From Health Law Daily, September 7, 2017

Court has jurisdiction to consider disproportionate share hospital reimbursement

By Paige Arnold, J.D.

A federal district court in Washington ruled that it had subject matter jurisdiction to consider claims related to the Medicaid calculations under the Disproportionate Share Hospital (DSH) Medicare adjustment. The court found subject matter jurisdiction existed based on the expedited judicial review decision by the Provider Reimbursement Review Board (PRRB) and that the issue in dispute related to the validity of the interpretation of federal regulations (Empire Health Foundation v. Price, September 1, 2017, Peterson, R.).

Background. Empire Health Foundation (the hospital), participated in the federal health insurance program as a provider of short-term acute care to Medicare eligible patients. The hospital challenged the HHS Secretary’s interpretation of the DSH adjustments for provider reimbursement of hospitals serving a large amount of low-income patients. Specifically, the hospital disagreed with the HHS policy on the treatment of unpaid Medicare Part A days and alleged that "unpaid Medicare Part A days" should not be "entitled to benefits under part A for purposes of the DSH social security (SSI) and Medicaid fractions."

The hospital challenged the Part A portion of the DSH formula and the accounting of "dual-eligible days" for benefit entitlement for the 2008 fiscal year. The PRRB issued a determination stating that the PRRB lacked authority to review validity of the DSH payment regulation and granted the Hospital’s request for expedited judicial review. The hospital filed a cause of action in federal court and the HHS Secretary filed motion to dismiss the complaint for lack of subject matter jurisdiction.

Subject matter jurisdiction. Federal district courts have jurisdiction over Medicare provider reimbursement disputes in which the PRRB determined it lacked authority. Here, the PRRB determined it lacked authority to establish policy related to the calculation of DSH reimbursement under the regulation. The court rejected the Secretary’s argument that two matters in dispute were outside the scope of the court’s jurisdiction. Specifically, the Secretary argued that the court lacked jurisdiction to determine the "validity of the Secretary’s policy regarding the identification of Medicare patients ‘entitled to supplementary security income benefits’" and that the Secretary, in an unrelated case, vacated an area of dispute in the regulation (see Medicare reimbursement lawsuit not estopped by previous litigation, August 7, 2017). The court did not even consider the Secretary’s latter argument because the Secretary’s later decision in the unrelated case, had invalidated the Secretary’s argument.

The case is No. 16-CV-209-RMP.

Attorneys: Teresa Ann Sherman (Paukert & Troppmann PLLC) for Empire Health Foundation. James Owen Bickford, U.S. Department of Justice, for Thomas E. Price.

Companies: Empire Health Foundation

MainStory: TopStory CaseDecisions CMSNews DSHNews MedicaidPaymentNews PaymentNews ProgramIntegrityNews WashingtonNews

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