Federal Judge Blocks Medicaid Rule on Safety Net Facilities
Judge James Robertson of the U.S. District Court for the District of Columbia on Friday delayed the implementation of a rule that would reduce Medicaid reimbursements to safety net hospitals and clinics by about $5 billion over the next five years, the AP/Washington Post reports (AP/Washington Post, 5/24).
The case involves a lawsuit filed by a national coalition of hospitals that includes Alameda County Medical Center, the National Association of Public Hospitals and Health Systems, the American Hospital Association and the Association of American Medical Colleges.
The rule, which would apply to hospitals funded by local governments, would require that federal Medicaid reimbursements do not exceed the cost of care provided by the facilities.
According to the plaintiffs, the rule would limit the ability of the hospitals to offset the cost of care for uninsured patients through higher Medicaid reimbursements. A congressional moratorium on the rule expired on May 25.
The lawsuit asked the court to prevent implementation of the rule after the moratorium expires (California Healthline, 3/12).
According to Robertson, Congress passed the bill that established the moratorium on May 24, 2007. However, before President Bush signed the legislation, HHS Secretary Mike Leavitt "rushed a typo-ridden final rule" to the Office of the Federal Register for publication (AP/Washington Post, 5/24).
Because CMS did not submit a required notification to Congress until May 25, 2007 -- the day that the law took effect -- the rule violated the moratorium, Robertson said (Reichard, , 5/23).
In his decision, Robertson wrote, "In this case, the court is asked to decide whether a maneuver by the Executive Branch deliberately designed to outfox a clear directive of Congress was successful. The answer is no" (Russell, San Francisco Chronicle, 5/24).
The decision requires CMS to republish the rule, which would take effect after a 60-day comment period (Rosetta, Salt Lake Tribune, 5/24).
The delay allows Congress time to pass a supplemental war appropriations bill (HR 2642) that would extend the moratorium until April 2009 (CQ HealthBeat, 5/23).
Amy Weitz, a spokesperson for the California Association of Public Hospitals and Health Systems, said, "Basically, the court is saying that the Bush administration and CMS acted improperly," adding, "But it doesn't stop them from implementing the rule two months from now. We still need Congress to act quickly to extend the moratorium" (Bohan, Bay Area/San Jose Mercury News, 5/26).
Larry Gage, president of the National Association of Public Hospitals and Health Systems, said that Congress should "move ahead swiftly to extend the moratorium" on the rule.
CMS spokesperson Jeff Nelligan said that "we are still reviewing the decision," adding that Robertson ruled on a "technicality" related to the effect of the moratorium and "did not rule against us on the substance of the rule." In addition, he said, "We remain convinced that the rule will ultimately be upheld on its merits by the judge."
On Thursday, Leavitt said that CMS voluntarily would delay the effective date of the rule, as well as a second regulation related to Medicaid reimbursements for hospitals, until Aug. 1 (CQ HealthBeat, 5/23).