New Hampshire federal court rejects CMS FAQs

The U.S. District Court for the District of New Hampshire yesterday permanently barred the Centers for Medicare & Medicaid Services from using FAQs 33 and 34 in calculating Medicaid Disproportionate Share Hospital payments for New Hampshire hospitals. The New Hampshire Hospital Association and several New Hampshire hospitals joined in challenging the CMS policy that reduced the amount of payment they were entitled to under the Medicaid Act and in violation of the Administrative Procedure Act. In her decision, U.S. District Judge Landya McCafferty held that CMS did not have the authority to make these kinds of substantive changes through FAQs on a website rather than notice-and-comment rulemaking. NHHA President Steve Ahnen said the ruling “ensures that long-standing policy with respect to the calculation of uncompensated care is upheld and maintained. As hospitals prepare to file and pay the Medicaid Enhancement Tax next month, projected to be $227 million this year, we hope this ruling provides the certainty that is needed to ensure the state continues to meet its obligations under the settlement agreement reached by the state and hospitals in June of 2014.”