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Hospital Groups Urge Supreme Court to Review Disproportionate Share Hospital Payment Formula

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Zara Nwosu
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Hospital Groups Urge Supreme Court to Review Disproportionate Share Hospital Payment Formula

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Six national hospital groups, led by the American Hospital Association (AHA), are urging the Supreme Court to review a case challenging the application of the Disproportionate Share Hospital (DSH) payment formula by the Department of Health and Human Services (HHS). This appeal to the highest court in the country stems from what the hospital groups regard as a flawed interpretation of the DSH formula, which they argue is inconsistent with the Supreme Court's own reasoning.

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The DSH Payment Formula Controversy

The DSH payment formula is a key element in the federal support for hospitals caring for a large number of low-income patients. The groups argue that the HHS's interpretation of the formula is inconsistent with the Supreme Court’s reasoning in the Becerra v. Empire Health Foundation case. They also argue that this inconsistency will result in hospitals losing more than a billion dollars each year in DSH funds. The importance of the DSH formula extends beyond just this financial aspect as it affects hospitals' eligibility for other federal benefits, including the 340B Drug Discount Program.

The Implications for Hospitals and the Healthcare System

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Given the substantial amount of funds at stake, the case has wide-reaching implications for hospitals, patients, and the American healthcare system at large. If the current interpretation of the DSH formula by the HHS is left unchallenged, it could result in significant financial strain for hospitals. This could, in turn, impact the quality of care and services provided to patients, particularly those from low-income backgrounds who rely heavily on the services offered by DSH eligible hospitals.

Medicaid and CHIP Payment and Access Commission's (MACPAC) Recommendations

In a related development, the Medicaid and CHIP Payment and Access Commission (MACPAC) has recommended seven changes to Medicaid managed care policy to better monitor denials and improve the appeals process. MACPAC also suggested potential approaches to improve transparency in Medicaid financing, including the requirement for the Centers for Medicare & Medicaid Services or states to publish provider-level data on provider taxes, fees, and other assessments used to finance state Medicaid programs. These recommendations could potentially enhance the efficiency and transparency of the Medicaid program, further strengthening the American healthcare system.

Conclusion

The appeal by the six national hospital groups for a Supreme Court review of the DSH payment formula interpretation is a significant development in the healthcare sector. The outcome of this case could have far-reaching implications for hospitals, especially those serving a large number of low-income patients, and the broader American healthcare system. As the issue unfolds, all eyes will be on the Supreme Court's decision, which could fundamentally impact the future healthcare landscape in the U.S.

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