The state of Illinois sued the federal government to reverse an order requiring repayment of about $145 million in long-ago reimbursements to two Chicago safety-net hospitals.
The CMS in 2016 required the Illinois Department of Healthcare & Family Services to repay the federal government $140 million in reimbursements to the University of Illinois Hospital and $4.5 million for payments to Mount Sinai Hospital, made between July 1996 and June 2000, according to the complaint.
During the four-year period in question, Illinois made about $338 million in payments to U of I Hospital and about $39 million to Mount Sinai. Such hospitals, also called disproportionate-share hospitals, receive additional payments to help cover the cost of serving high numbers of poor and uninsured patients.
The CMS' 2016 order followed a 2004 audit by the Office of Inspector General within the U.S. Department of Health & Human Services. Illinois appealed the order, but it was upheld in April 2018 by the Departmental Appeals Board, which said in its decision: "The process that Illinois used to calculate and apply the hospital-specific (disproportionate share hospital payment) limits did not follow the standards and methodologies in Illinois' Medicaid State plan."
The state sought reconsideration, but the board in January sustained its decision.
To cover the disputed payments, the CMS will collect about $20 million per quarter from the state, plus interest. The first payment was collected last summer.