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Hospitals In 3 Southern States Sue Over Medicare
Reuters Health
July 7, 2004
Nearly 100 hospitals in Alabama, Louisiana and Mississippi on Wednesday said they filed suit against the U.S. Health and Human Services Department for $226.3 million in Medicare payments they claim they are owed.
The hospitals, organized by the Alabama Hospital Association, said the Health and Human Services Department uses an "arbitrarily developed" formula that overstates how much wages account for the total cost of each patient case.
The spokesman for the Centers for Medicare and Medicaid Services, an agency of the U.S. Department of Health and Human Services, was not immediately available to comment.
The hospitals took issue with two adjustments that Medicare officials use in calculating reimbursements for inpatient hospital service -- wages and wage-related costs.
According to the complaint, the Health and Human Services Department regulations illegally overstate the portion of the average cost per case that is attributable to the labor component. They also said the labor component illegally includes costs that are not wage or wage-related.
As a result, federal officials have not properly determined the reimbursable amount of wages and wage-related costs incurred by hospitals to deliver Medicare services, the hospitals said.
That has resulted in Medicare payments that do not fully cover reimbursable costs at hospitals in low-wage and rural areas, according to the Alabama Hospital Association.
"We found that hospitals in some areas of the country were getting paid twice as much as Alabama hospitals for the exact same procedure," said Gregg Everett, the association's general counsel.
Six hospitals in Mississippi, 13 hospitals in Louisiana and 78 hospitals in Alabama joined the lawsuit, filed Tuesday in the U.S. District Court for the District of Columbia.
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