“The U.S. Supreme Court June 3 ruling that the Health and Human Services Department improperly changed Medicare payment rates without notice should be of interest to anyone who interacts with Medicare, including benefits, payment policy, and providers of care under Medicare.”
“In Azar v. Allina Health Services, the issue was not the policy, but whether, under the relevant provisions of the Medicare Act, 42 U.S.C. §§1395hh(a)(2) & (a)(4), the HHS was permitted to change the disproportionate share hospital (DHS) calculation formula without notice-and-comment rulemaking.”
“The ruling does not stop good, bad, or indifferent policy from being implemented. However, it does ensure transparency when a substantial change in Medicare policy is proposed by the HHS’s Centers for Medicare & Medicaid Services (CMS), and stakeholders will be able to provide information about how a proposed policy will impact Medicare providers and patients in real terms.”
“History
In 2004, the CMS issued a final rule that included a new methodology for DSH payments that counted Medicare Part C inpatient days, in addition to Part A days in its calculation. This differed from the proposed rule the CMS issued in 2003 that excluded Part C days from the calculation. The rule was vacated after hospitals filed legal action.”
“A federal court held that the final rule violated the Administrative Procedures Act (APA) because it was not a “logical outgrowth of the proposed rule. The U.S. Court of Appeals for District of Columbia affirmed the decision. The CMS issued a new rule in 2013 prospectively readopting the policy of counting Part C patients. In 2014, unable to rely on the prospective 2013 rule or the vacated 2004 rule, the CMS posted on its website the Medicare fractions for fiscal year 2012, noting that they included Part C patients…” Read the full article here.
Source: Supreme Court Rules HHS Cannot Take Shortcuts in Rulemaking – By Stephanie Kennan, June 20, 2019. Bloomberg Law.
