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Hospitals are suing HHS over Medicare payments

Illustration of a statue of Justice wearing a doctor's coat and a stethoscope
Illustration: Sarah Grillo/Axios

Hundreds of hospitals are suing the Department of Health and Human Services, claiming in a pair of lawsuits that they've been shortchanged on Medicare payments.

Why it matters: Medicare is full of highly technical payment policies that change every year, and hospitals are trying to recoup billions of taxpayer dollars in these cases.

Details: Both lawsuits were filed this week.

  • Lawsuit #1: A group of more than 600 hospitals argued HHS illegally allowed a 0.7% cut to inpatient services to continue in 2018 and 2019 when it should've stopped, by law, in 2017. They said the cuts cost the industry $840 million, and they want that money back, plus interest.
  • Lawsuit #2: Dozens of hospitals are saying HHS is not abiding by a recent Supreme Court decision that said the federal government was incorrectly calculating supplemental Medicare payments that help hospitals that treat larger numbers of low-income patients. Hospitals contend they are owed at least $4 billion in underpayments.

Between the lines: Hospitals have not been shy lately to use the courts as a vehicle to halt payment policies they believe are unlawful.

  • But most hospital systems, which have consolidated heavily over the years, have remained financially strong despite these cuts and alleged underpayments.