Hospital associations lost their last-ditch lawsuit against HHS last week to block a federal regulation that slashes what local public hospitals may charge Medicaid.
The regulation, which went into effect two days after the U.S. District Court in Little Rock, Ark., ruled in favor of the government, reduces the Medicaid "upper payment limit" city- and county-owned public hospitals can charge Medicaid to 100% of Medicare rates from 150%. It closes a loophole used by 32 states to inflate matching federal payments to their Medicaid programs. The change will cut federal Medicaid funding by $27 billion over the next 10 years.
National hospital associations said the ruling would hurt providers.
"Implementation of these rules will impede the ability of thousands of hospitals to continue providing necessary services to our most vulnerable citizens," said Richard Davidson, president of the American Hospital Association, which led the plaintiffs' group, along with the National Association of Public Hospitals and Health Systems.
The lawsuit helped the associations win two one-month delays that pushed back implementation of the regulation to May 15. The delays were worth a total of about $300 million more in federal payments to state Medicaid programs.
Legislation was introduced in the House and the Senate last week to overturn the regulation, but one hospital lobbyist requesting anonymity called the strategy a "long shot."