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TX hospital joins dozens to sue HHS for reimbursement

A group of Texas hospitals recently joined others from Florida, Georgia, Alabama, Tennessee, and other states where the United States Health and Human Services (HHS) did not expand Medicaid to demand payment. The hospitals state they did not receive payment for care provided because they treated a disproportionate share of low-income patients.

What is the problem?

The issue stems back to the Affordable Care Act (ACA). In 2012, the Supreme Court stated the HHS could not make states expand Medicaid. This led to issues with which states the HHS would recognize as having an expanded Medicaid population and provide adequate payment.

As a result, representatives for the hospitals involved in the lawsuit state they received lower reimbursement for three years, 2014, 2015 and 2016, even though they treated the same number of low-income patients as other states with expanded Medicaid.

What are the hospitals hoping to gain?

It is important to point out that the hospitals are not suing for payment from Medicaid. Instead, they are suing for payment from Medicare. The 32 hospitals involved in the lawsuit claim the government should deem the patients at issue as “low-income patients” as needed to determine the Medicare disproportionate share hospital adjustment.

The hospitals argue that the HHS Secretary’s move to deny payment goes against the purpose of the ACA. The hospitals had attempted to resolve the matter with the HHS without litigation. However, they state they HHS took a long delay before providing a response and neither granted nor denied the payment request. As a result, they felt this was the only option to get the payment they are entitled for the treatment provided.

If successful, this would result in payment from Medicare because the hospitals provide services for a disproportionate number of low-income patients. The hospitals have also requested interest.