Twenty-nine hospitals are appealing a judge's ruling last year over outlier payments to hospitals for particularly expensive patients.
The hospitals had challenged regulations governing outlier payments for fiscal years 1997 through 2007, saying the HHS secretary's “flawed regulations and misguided enforcement” shorted them $350 million. They alleged HHS didn't properly account for the skewed data of the hospitals that “turbocharged,” a practice in which hospitals would improperly manipulate their charges to receive additional outlier payments.
Outlier payments are extra payments made to hospitals when the estimated cost of treating a patient exceeds the standard Medicare payment by a certain amount.
A federal judge sided with the CMS in September, rejecting the hospitals' challenges to the regulations. The judge, however, did tell the CMS to better explain its calculations behind the payment.
The CMS published a clarification in January standing behind its calculations and saying it would not recalculate outlier payments made to hospitals. In March, the judge ruled that the CMS' explanation was adequate.
The hospitals and systems—which include Banner Health, Denver Health and Hospital Authority and West Virginia University Hospitals, among others—are now appealing those decisions.
Stephen Nash, a partner with Squire Patton Boggs who is representing the hospitals, declined to comment on the case, as did the U.S.. Justice Department on Monday.
The case is one of a number brought by hospitals over the outlier payments.
In May 2015, a federal appeals court came to a similar conclusion in a separate case brought by 186 hospitals, District Hospital Partners v. Burwell. In that case, the hospitals alleged that Medicare underpaid them by more than $3 billion.