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From Health Law Daily, August 7, 2017

Medicare reimbursement lawsuit not estopped by previous litigation

By Rebecca Mayo, J.D.

The District Court for the District of Columbia ruled that Allina Health Services is not judicially estopped from bringing its claims related to the Medicaid calculation under the Disproportionate Share Hospital (DSH) Medicare adjustment, despite previous litigation focused on the SSI/Medicare calculation. The court also decided there was sufficient subject matter jurisdiction for the case to continue (Allina Health Services v. Price, August 4, 2017, Contreras, R.).

Prior litigation. In previous litigation, Allina Health Services challenged a change in regulatory languages issued by the HHS Secretary, Thomas Price. The change removed the classification of patients who are enrolled in Medicare Part C as "entitled to benefits under Part A" from the SSI/Medicare fraction in the calculation of reimbursements to DSHs. After the matter was remanded back to HHS, the CMS decided to treat patients who are enrolled in Medicare Part C the same as patients "entitled to benefits under Part A" for the purposes of the calculating the DSH adjustment. In making this change, CMS effectively left patients enrolled in Medicare Part C out of the Medicaid fraction in the calculation of DSH adjustments. Allina is now challenging this change.

Judicial estoppel. Secretary Price moved for a motion to dismiss, arguing that Allina was judicially estopped from challenging the Medicaid fraction because in Allina’s previous litigation they focused their arguments on the SSI/Medicare fraction and those arguments were contradictory to their current arguments. The court held that there was no contradiction merely because Allina did not raise arguments related to both fractions previously.

Jurisdiction. Secretary Price also raised the issue of jurisdiction, claiming that because the claims related to the Medicaid fraction were not raised in the previous litigation, subject matter jurisdiction was never established and cannot be assumed. The court disagreed and explained that the court "understood interpreting the application of Part C days in connection with either the Medicaid fraction or the SSI/Medicare fraction would necessarily compel the result with regard to the other fraction."

The case is No. 1:16-cv-00150-RC.

Attorneys: Stephanie Ann Webster (Akin Gump Strauss Hauer & Feld LLP) for Allina Health System d/b/a Abbott Northwestern Hospital, Florida Health Sciences Center, Inc. d/b/a Tampa General Hospital and Henry Ford Health System d/b/a Henry Ford Hospital. Brian G. Kennedy, U.S. Department of Justice, for Thomas E. Price.

Companies: Allina Health System d/b/a Abbott Northwestern Hospital; Florida Health Sciences Center, Inc. d/b/a Tampa General Hospital; Henry Ford Health System d/b/a Henry Ford Hospital

MainStory: TopStory CaseDecisions IPPSNews CMSNews DSHNews MedicareContractorNews PaymentNews PartANews ProgramIntegrityNews

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