79 Hospitals Sue HHS Seeking Review of Reimbursement System Change

A group of 79 hospitals located over a dozen states filed suit against Xavier Beccera, Department of Health and Human Services Secretary, appealing from the decision of the Provider Reimbursement Review Board (PRRB). The suit concerns a new auditing process for determining reimbursement amounts for uncompensated care.

The plaintiffs argued that the agency was wrong to reject the hospitals’ appeal. While they said the PRRB rejected the appeal because “Congress precluded administrative or judicial review of the agency’s actions;” they countered that they do not seek review of a reimbursment decision itself but instead is seeking to to “ensure that the Centers for Medicare & Medicaid Services (CMS) lawfully implements changes under the Medicare Act and the Administrative Procedures Act.”

The hospitals argued that policy changes “which may impact a hospital’s payment” must be done through standard notice-and-comment rulemaking. They claimed that this process did not happen with recent changes; instead, new policies were put in place via Worksheet S-10 audits, which they argued lack “standard auditing principles and protocols.”

The program at issue is for Disproportionate Share Hospitals, which treat a “disproportionately large number of low-income patients,” the complaint said. Changes made via S-10 audits led to changes in payments, such as disallowance of bad debt and charity care charges, the hospitals said.

The hospitals specifically alleged violations of both the Medicare Act and the Administrative Procedures Act. They are represented by Hall Render Killian Heath & Lyman.