The court system has once again stepped into a seemingly clear case of abuse. It is common knowledge that Medicaid often pays providers less than the cost of their services and that hospitals are burdened with the cost of providing care for indigent uninsured patients who are unable to pay. In fact, the federal government provides funding to hospitals that have a large number of low-income and uninsured patients. Called Disproportionate Share Hospital (DSH) reimbursement, the formula pays those hospitals with the largest burden a greater reimbursement. In submitting requests for reimbursements, the rules had allowed hospitals to omit third-party payments that they might have received for these patients.
In 2017, the federal government introduced a policy that established that payments from Medicare and private insurers had to be considered and that under no circumstances could hospitals receive more than they spend for these patients under the DSH reimbursement rules.
Incredible to me, eight hospitals joined together to sue – alleging that Centers for Medicare & Medicaid Services (CMS) overstepped its authority – and a D.C. federal judge agreed. Thankfully, the U.S. Court of Appeals overturned the ruling earlier this week and upheld the requirement that all reimbursement be considered.
As I consider this, I think about system waste and abuse. Put this whole process in that basket. And who is going to pay for it? The patients or taxpayers – like we do for everything.