Seven hospitals and health systems in North Carolina have sued the federal government claiming they should have received additional disproportionate share payments last year, according to a Triad Business Journal report.
Greensboro, N.C.-based Cone Health is one of the hospitals suing the federal government. The system claims it should have received $2.2 million more last year from CMS under the disproportionate share formula.
Based on the assumption of increased health coverage, the Affordable Care Act reduced disproportionate share hospital payments. The ACA reduces DSH payments by 75 percent, or $49.9 billion, by 2019. In addition, under the ACA, disproportionate share payments are tied to each hospital's share of uncompensated care as it relates to a national pool of hospitals, according to the report.
"Because of the vague and general drafting of legislation, and the ACA in particular, CMS is given discretion over a lot of technical calculations that can have a large impact on provider payments," Cone Health said in a statement about the lawsuit, according to the report. "As we understand it, CMS' goal is to interpret these calculations in a way that minimizes Medicare outlays. This means that healthcare systems, as a routine matter, challenge these interpretations to ensure transparency, rigor, and a collective provider voice in these determinations. And the vehicle to do this is typically group appeals such as this."
The following North Carolina healthcare organizations joined Cone Health in challenging the payments: Charlotte-based Carolinas HealthCare System, Wilkesboro-based Wilkes Regional Medical Center, Kings Mountain (N.C.) Hospital, Laurinburg-based Scotland Memorial Hospital, Albemarle-based Stanly Regional Medical Center and Shelby-based Cleveland Regional Medical Center.
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