Health Systems

Parkland One of 622 Hospitals to Sue HHS for Reimbursement Reduction

Parkland Hospital and Health System is one of 622 hospitals suing the Health and Human Services Department for cutting hospital reimbursement by around $840 million per year nationwide. For each hospital that participates in Medicare reimbursement, the suit alleges a loss of about $200,000 per year.

An adjustment to the way HHS paid hospitals in 2008 resulted in overpayments to providers, and the government made adjustments to the reimbursement rates to recoup $11 billion from the hospitals between 2014 and 2017.  The suit says that the law required that the reimbursement cuts be reversed in 2017, but the suit alleges that those lower rates continued into fiscal year 2018 and 2019.

In total, the plaintiffs claim that the reduced rate resulted in $124.4 million in lost funds for hospitals involved in the suit, with $840 million in losses for all hospitals that participate in Medicare.

Texas hospitals are especially sensitive to the loss of federal funds, as Texas is one of the states that has not expanded Medicaid. Local facilities need generous reimbursement rates to cover the costs of uncompensated care provided to residents who can’t pay for care and don’t insurance. Dallas is one of the most expensive places to receive healthcare in the nation and has the worst uninsured rate in the nation for big cities,. The local hospital association is in favor of expanding Medicaid.

The suit says the HHS has committed “unlawful conduct, which resulted in massive savings for CMS and significant financial detriment to the Plaintiffs.”

Read the full complaint here.

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