Hundreds of Hospitals Sue HHS to Stop Medicare Pay Cuts

More than 600 hospitals sued the Health and Human Services Department in a District of Columbia federal court to force the agency to end a Medicare pay cut that they say cost them about $124.4 million per year in 2018 and 2019.

Hospitals from all over the country accused the HHS of going beyond Congressional directives on a program to recoup Medicare overpayments caused by a change in the Inpatient Prospective Payment System.

The Centers for Medicare & Medicaid Services’s 0.7% payment reduction to offset overpayments was supposed to end in 2017, but CMS continued it through 2018 and 2019, the complaint filed in the U.S. District Court for the District of Columbia Nov. 19 said.

Hospitals’ Medicare increased following a 2008 administrative change in the methodology for calculating reimbursements under the IPPS, the complaint said. To address the increase, Congress authorized CMS to calculate and recoup the overpayments through temporary reimbursement rate adjustments in specific years, it said.

In 2013, Congress authorized adjustments for 2014 through 2017 to recover about $11 billion in overpayments made in 2010 through 2012, the complaint said. Congress expressly prohibited CMS from continuing the adjustments beyond 2017, it said.

Causes of Action: Administrative Procedure Act, Medicare Act, and other laws.

Relief: Declaration that CMS’s actions are unlawful; order directing CMS to apply a positive adjustment to 2018 and 2019 to offset the negative recoupment adjustment; damages, interest, costs, and attorneys’ fees.

Response: The agency doesn’t comment on pending litigation.

Attorneys: Hall, Render, Killian, Heath & Lyman PC represents the hospitals.

The case is Adcare Hosp.-Worcester v. Azar, D.D.C., No. 1:19-cv-3482, filed 11/19/19.