In an opening brief before the Third Circuit Court of Appeals, representatives of HHS argued lawmakers did not intend for charity care to count in calculating disproportionate share payments, according to a Law360 report.
A district court ruled earlier this year a decision made by HHS Secretary Kathleen Sebelius to include patients participating in Medicaid pilot programs but not patients covered by Pennsylvania's General Assistance Program in DSH payment calculations was arbitrary, according to the report.
HHS is appealing the decision, arguing "The secretary certainly did not act irrationally in exercising the very authority that Congress had conferred upon her" as the law allows both Medicaid patients as well as patients in pilot projects to be included in DSH payment calculations, according to the report.
HHS attorneys further contended it made more sense for Secretary Sebelius to count patients in a program the federal government has control over, rather than a fully state-run program, according to the report.
Attorneys representing the hospital plaintiffs, Nazareth Hospital and St. Agnes Medical Center, both located in Philadelphia, declined to comment but will file an opposing brief, according to the report.
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