A U.S. District Court in Missouri Friday permanently barred the Centers for Medicare & Medicaid Services from enforcing in Missouri a 2017 final rule and two Frequently Asked Questions documents that included private insurance and Medicare payments in calculating the Medicaid shortfall component of the hospital-specific limit on disproportionate share hospital payments. In his opinion, U.S. District Judge Brian Wimes concludes that the Medicaid Act “is unambiguous that the calculation of a DSH hospital’s HSL does not involve consideration of private insurance or Medicare payments, and a DSH hospital’s total uncompensated costs of care for calculating the HSL is reduced only by the total of other Medicaid program payments.” The case was brought by the Missouri Hospital Association. Federal district courts in Tennessee and New Hampshire last year barred CMS from using the FAQs in calculating Medicaid DSH payments for Tennessee and New Hampshire hospitals. CMS then issued a final rule incorporating the policy into regulation.

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