The Department of Defense is being sued by Children's Hospital Colorado in Aurora over changes to insurance reimbursements, The Gazette reported Oct. 11.
The Department of Defense said in a new rule that reimbursement rates are being changed to align with Medicare reimbursement as required by law, the report said. It is expecting to offer temporary payments to hospitals essential to Tricare operations, according to its final rule.
But the hospital's lawsuit argues the DOD developed the model and ignored how the rule is "completely impracticable" for children's hospitals.
Reimbursement cuts will force the hospital to "dismantle years of work that has gone into building pediatric departments, center and service lines" for seriously ill children, the lawsuit alleges.
According to the lawsuit, Children's Hospital Colorado isn't able to determine from its own data whether it would qualify for payments, but the DOD said one of its locations wouldn't meet one of the criteria.
The hospital could lose $10 million annually even with the payments, the lawsuit said.
Greg Raymond, Southern region president at Children's Hospital Colorado, Colorado Springs, told the publication in a statement that "DHA's arbitrary reimbursement reductions will have a negative impact that will make it impossible to sustain our current pediatric health care services and programs that are available to our entire community."
The DOD didn't immediately respond to The Gazette's request for comment.