The Greater New York Hospital Association filed a long-promised lawsuit against HHS to reverse new Medicare regulations determining how hospitals are reimbursed for local labor costs. The complaint on behalf of 76 New York hospitals was filed in U.S. District Court in New York. It charges that the CMS "capriciously and arbitrarily" established new metropolitan service areas, which are used to adjust Medicare reimbursement for area wage differences. Under new regulations that went into effect Oct. 1, hospitals in three New Jersey counties were moved into the New York wage-index area, ultimately costing New York hospitals $53 million in fiscal 2005 and $980 million over the next 10 years, GNYHA said.
The association filed an appeal with CMS' Provider Reimbursement Review Board in September to exhaust administrative remedies. GNYHA will file a motion for summary judgment within the next three weeks, said Susan Waltman, the association's senior vice president and general counsel. "It's a very significant impact," she said of the changes. "We have to move very fast." -- by Cinda Becker