A federal judge in Colorado ruled against Aurora-based Children's Hospital Colorado's challenge of a new Defense Department rule it said would cost the hospital millions of dollars, Colorado Politics reported April 18.
The health system filed a lawsuit in October after the Department of Defense issued a new rule that Tricare reimbursement rates are being changed to align with Medicare reimbursement as required by law. The system alleged that the department ignored how the rule is "completely impracticable" for children's hospitals.
Children's Hospital Colorado alleged 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 health system estimated its two facilities will lose between $11 million and $17 million in Tricare reimbursement annually because of the new rule, according to the report.
U.S. District Court Judge Nina Wang found that the Defense Department did not exceed its authority and it did not act arbitrarily in moving to the new reimbursement, according to the report. She said in her ruling that Children's Colorado essentially was asking her to rule that the government could never lower its payments to children's facilities.
A spokesperson for the health system said they are still evaluating long-term effects of lower reimbursements and will not turn away emergency room patients, but it "may have to arrange transportation for some patients to other venues of care," according to the report.
The spokesperson also said the system is continuing to advocate to Congress and other elected officials about the "dangerous consequences of this change and the implications for maintaining access to pediatric specialty care and preserving military readiness," according to the report.