More than 600 hospitals sued HHS on Tuesday over an $840 million cut to Medicare inpatient hospital payments that they claim wasn't authorized by Congress.
HHS reduced inpatient hospital reimbursements by 0.7% in 2018 and 2019, but the hospitals claim Congress only approved the cuts for 2014 through 2017 to recover $11 billion of overpayments dating back to 2008.
Those extra two years of cuts amounted to $840 million annually, or around $200,000 per hospital, per year.
"Congress explicitly prohibited CMS from continuing any of the recoupment adjustments beyond (federal fiscal year) 2017," the complaint said.
The hospitals, including several Ascension locations and Rush University Medical Center, asked the U.S. District Court for the District of Columbia to reverse the payment reduction for 2019. Hospitals also want HHS to boost their 2018 and 2019 payments by 0.7%—plus interest—to offset their 2017 financial losses. That's in addition to a 0.5% payment increase for 2019 approved by Congress under the 21st Century Cures Act.
"CMS has conflated (the legislation) to justify its unlawful conduct, which resulted in massive savings for CMS and significant financial detriment to the plaintiffs," the complaint said.
The overpayments stemmed from changes to the inpatient prospective payment system methodology that led to widespread coding errors for inpatient hospital stays. Hospitals have opposed previous efforts to recoup the funds.
The CMS declined to comment on pending litigation.
Hall Render, the law firm representing the hospitals in the complaint, did not respond to a request for comment.