Hospital associations, hospitals challenge 0.2% Medicare cut for FFY 2015

The AHA today joined four other hospital associations and four hospital organizations in challenging as unlawful a 0.2% reduction in Medicare payment rates to hospitals for inpatient services furnished in Federal Fiscal Year 2015. According to the complaint, filed in the District of Columbia federal court, the Centers for Medicare & Medicaid Services built its past errors into the FFY 2015 reimbursement rates by starting with FFY 2014 payments that were reduced because of an invalid 0.2% cut taken to offset CMS-projected effects of its two-midnights policy. “It was arbitrary and capricious for CMS to impose the 0.2% cut on hospitals in FFY 2014, and it was just as arbitrary and capricious for CMS to use those flawed amounts as the basis for this year’s calculations,” the complaint states. The court has not yet ruled on the group’s challenge that the FFY 2014 payment reduction violates both Medicare law and the Administrative Procedure Act. In addition to AHA, the plaintiffs include the Greater New York, New York State, New Jersey and Pennsylvania hospital associations; Phoenix-based Banner Health; Einstein Healthcare Network in Philadelphia; Wake Forest University Baptist Medical Center in Winston-Salem, NC; and The Mount Sinai Hospital in New York.