Hospitals worried federal bill would void $50M settlement
Murray Klein of Reed Smith law firm said Friday the bill contains language that appears to retroactively change a Medicaid funding formula used in determining the settlement in October.
“We have a concern that if the feds appeal the case, they may try to use this to reverse the outcome,” Klein said.
The hospitals sued the federal government and successfully argued that it paid them less than they were due because it used an incorrect formula from 1994 through 1999 to calculate the Medicare Disproportionate Share Hospital adjustment.
Under the old formula, these hospitals were not receiving reimbursement for treatment of TennCare patients who would not be eligible for Medicaid. The formula was adjusted in 2000 to include these patients.
The bill would limit the number of hospitalization days covered, “effective as to the date of their respective promulgations.”
That wording is what worries plaintiff lawyers in the case — they believe it could be interpreted by Medicaid officials to be retroactive and apply the new rule to the disputed reimbursements.
However, Matt Lehigh, a spokesman for Senate Majority Leader Bill Frist, R-Tenn., said Thursday the deficit-reduction bill, if passed, would not retroactively affect any ongoing lawsuit.
Frist and Sen. Lamar Alexander, R-Tenn. both voted for the measure.
“There doesn’t seem to be anything to do but wait and see what happens,” Klein said.
Most of the 15 hospitals are in East Tennessee: University of Tennessee Medical Center in Knoxville, Sycamore Shoals Hospital in Elizabethton, Saint Mary’s Health System in Knoxville, Fort Sanders Regional Medical Center in Knoxville, Fort Sanders Parkwest Medical Center in Knoxville, Fort Sanders Loudon Medical Center in Loudon, Methodist Medical Center of Oak Ridge, Johnson City Medical Center and Blount Memorial Hospital.
The plaintiff hospitals in Middle Tennessee are Cookeville Regional Medical Center, Gateway Health System in Clarksville, Middle Tennessee Medical Center in Murfreesboro, Vanderbilt University Medical Center and St. Thomas Hospital in Nashville.
The only plaintiff in West Tennessee is Jackson-Madison County General Hospital.
The deficit reduction bill stalled in the House on Thursday meaning Republican leaders were forced to postpone completion of the promised package curbing the growth of federal programs like Medicare and Medicaid.
It passed the Senate on Wednesday with Vice President Dick Cheney casting a tie-breaking vote. But Senate Democrats maneuvered to make minor changes in the bill, forcing it back to the House for another vote.
House Democrats said they will not let the nearly $40 billion spending reduction package go without a fight.
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On the Net: http://www.senate.gov/