Hospitals sue HHS for ‘tens of millions of dollars in long-overdue DSH payments

Hospitals sue HHS for ‘tens of millions of dollars in long-overdue DSH payments, a lawsuit was filed in the name of HHS Secretary Xavier Becerra by forty hospitals from five different states. The case was related to long-due payments to the hospitals in fixing Medicare’s disproportionate share of hospital payments. This has cost the hospitals millions.

Against HHS Secretary Xavier Becerra, 45 safety-net facilities—26 of which are operated by Dignity Health—filed a case on March 14 in the U.S. District Court for the District of Columbia. Hospitals affiliated with the lawsuit are located in California, Arizona, Nevada, Hawaii, and Minnesota.

Hospitals with a significant percentage of low-income patients are intended to benefit from DSH funding. The action is based on a 2008 court judgment and subsequent 2010 binding acquiescence ruling from HHS, when the agency agreed to revise the methodology for DSH payments to hospitals for fiscal years 2005 and earlier. According to the complaint, the recalculation and restitution would apply to fiscal years dating all the way back to 1988 for some of the plaintiff institutions.

Approximately 12 years after the consent, the hospitals claim that HHS has not reimbursed the amount to them. The continuous delay has also been justified by HHS, according to their legal counsel, who cited a 2020 moratorium on payment decisions made in accordance with a 2019 Supreme Court judgment over DSH payment formulas.

It was stated in the complaint that the hold is invalid. It should not affect the pre-2004 cost years at issue here, among other things, and the agency’s previous consent to that choice for the years before 2004. The court should issue an order requiring the payment activities that have been illegally withheld and unnecessarily delayed.

The hospitals contacted the Office of General Counsel at HHS to resolve their grievances without resorting to litigation, according to the legal counsel for the hospitals. The office responded, according to the lawsuit, that HHS’s contractors had been told not to make the necessary updated payment decisions.

Due to the revised Supplemental Security Income (SSI) fractions addressed in the 2008 lawsuit and 2010 capitulation, the additional DSH amounts are included in those adjustments.

For the different cost reporting periods indicated by each plaintiff in the case, the hospitals are asking for fast payment determinations with these SSI fractions and interest on any additional amounts owed due to the SSI fraction revisions and legal expenses.

The complaint also asserts that HHS is illegally delaying withholding payments because of the case Azar v. Allina Health Services.

More than 20 of the litigants are connected to Dignity Health, a San Francisco-based organization. Several news agencies asked the company for their comments on the litigation blame but they refused to make any comment.

The hospital’s counsel stated in the defense:

“The agency’s unreasonable delay has cost the plaintiff hospitals tens of millions of dollars in funds that should have been paid to them many years ago for the higher costs that they incurred to treat low-income patients more than a decade ago”.

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