Dive Brief:
– A Texas district court has overturned a Biden administration regulation from 2023 tweaking how hospitals that serve a large low-income population are paid by Medicare.
– Baylor All Saints Medical Center in Fort Worth, Texas, and roughly a dozen other hospitals in the state sued the HHS in May arguing the change was illegal and would cost them a significant amount of their DSH revenue. On Thursday, a judge agreed the provision was illegitimate in striking it down.
– It’s a big win for hospitals in the state, more of which should qualify for add-on payments for disproportionate share hospitals as a result.
Dive Insight:
How the federal government divvies out DSH payments has been a major source of litigation in past years, with some cases reaching the Supreme Court. Many of the suits center on how the HHS should calculate DSH funding, which gives additional reimbursement to hospitals that serve disproportionately low-income populations.
The suit in Texas Northern District Court decided Thursday focuses on a 2023 hospital payment rule in which the HHS carved out a portion of low-income patients in the state from qualifying for DSH reimbursement.