A lawsuit filed by two Indiana hospitals over a Medicare payment calculation was properly dismissed by an HHS appeal board, the U.S. District Court for the District of Columbia ruled March 25.
The lawsuit, filed by Memorial Hospital in South Bend and Union Hospital in Terre Haute, challenged CMS' formula to calculate disproportionate share hospital payments in 2009. The hospitals argued that the inclusion of inpatient days for Medicare Part C patients in the DSH calculation reduced its payments. The two hospitals appealed the DSH payment amounts to an HHS appeals board.
After sitting on an appeal for 11 years, an administrative board for HHS dismissed the hospitals' challenge to the CMS formula in 2020, ruling that the formula couldn't be considered a final determination of payment as it rescinded the rule shortly after publication.
The district court agreed with the HHS board's determination, noting that the revised portions of the formula used to calculate hospitals' ultimate payments weren't published until three years later.