OUTLIER PATIENTS: Additional Payments To Hospitals Ordered
A federal judge this month ordered the federal government to make extra Medicare payments to a group of hospitals to compensate for underpaying them in 1985 and 1986, Modern Healthcare reports. The group of 211 hospitals sued the Department of Health and Human Services in 1993 for underpaying them for "outlier patients" -- those "with unusually long or costly stays." Medicare agreed to pay hospitals extra for those patients when "it went to a prospective payment system in 1984." The most recent court case asked whether the amount HHS pays to hospitals for outlier costs should be based on actual costs or projected estimates. U.S. District Court Judge Stanley Harris ruled in favor of the hospitals, which contended that payments should be "based on actual fiscal year" prospective payment systems. He wrote, "The (HHS) Secretary is obligated to make additional payments to hospitals to ensure ... the entire outlier pool is paid to hospitals."
Rolling In The Dough?
The decision "could open up the Medicare coffers to hospitals nationwide," reports Modern Healthcare. Jorge Lopez, an attorney with Akin Gump Strauss Hauer & Field, said, "If every hospital in the country were to receive these retroactive payments, the total liability for Medicare could be up to $341 million for that ('85-'86) period." However, legal observers predict "the government will almost surely appeal Harris' decision" (Hallam, 1/26 issue).