Becker's ASC Review

66 HEALTHCARE NEWS Supreme Court sides with hospitals in multibillion-dollar payment dispute By Ayla Ellison I n an opinion issued June 3, the U.S. Supreme Court ruled that HHS improperly failed to undergo formal notice-and-comment rulemaking before announcing a new Medicare rate calculation for disproportionate share payments to hospitals. At issue in the case, Azar v. Allina Health Services, is the federal government's decision to include Medicare Part C enrollees with Medicare Part A enrollees when calculating disproportionate share hospital payments. In 2004, 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. is differed from the proposed rule CMS issued in 2003 that excluded Part C days from the calculation. e 2004 rule was vacated aer hospitals filed legal action. e U.S. District Court held that the final rule violated the Administrative Pro- cedures Act because it was not a "logical outgrowth" of the proposed rule. e U.S. Court of Appeals for D.C. affirmed the decision. CMS issued a new rule in 2013 prospectively readopting the policy of counting Part C patients. In 2014, unable to rely on the prospec- tive 2013 rule or the vacated 2004 rule, CMS posted on its website the Medicare fractions for fiscal year 2012, noting that they included Part C patients. Hospitals sued over the change, arguing that the government vio- lated the Medicare Act's requirement to provide public notice and a 60-day comment period for any rule that establishes or changes a "substantive legal standard governing … the payment for services." e government argued it had no statutory obligation to provide notice and comment before adopting the policy because the APA's requirements are incorporated into the Medicare Act, and the policy of counting Part C patients in the Medicare fractions would be treated as interpretive rather than substantive under the APA. Counting Part C enrollees would reduce hospitals' payments by between $3 billion and $4 billion over a nine-year period, according to the government. e appellate court ultimately sided with the group of hospitals, led by Allina Health Services. e Supreme Court heard arguments in the case in January, and the high court sided with the hospitals in a 7-1 decision issued June 3. "In 2014, the government revealed a new policy on its website that dramatically — and retroactively — reduced payments to hospitals serving low-income patients," Justice Neil Gorsuch wrote in the ma- jority's opinion. "Because affected members of the public received no advance warning and no chance to comment first, and because the government has not identified a lawful excuse for neglecting its statutory notice-and-comment obligations, we agree with the court of appeals that the new policy cannot stand." n Massachusetts hospital to close in 2020 By Morgan Haefner U nion Hospital in Lynn, Mass., will close by May 2020, about eight months later than its expected closure in October 2019, according to CBS Boston. After the closure, the city of Lynn — which is about a 30-minute drive from Boston — will no longer have a hospital. In June 2015, Union Hospital's parent company, Boston- based Partners HealthCare, announced it would close Union Hospital to consolidate services in the North Shore region. The closure is part of Partners' restructuring ef- forts. As part of the restructuring, inpatient services at the Union Hospital campus will be consolidated at its sister fa- cility, North Shore Medical Center Salem (Mass.) Hospital. Salem Hospital will undergo renovations as part of the restructuring efforts, including expanded emergency room services. In a statement to CBS Boston, NSMC said: "North Shore Medical Center is significantly expanding not only in emergency care but also in behavioral health and other services in order to provide a healthcare facility bet- ter tailored to today's patients and their needs. These expansions, coupled with robust contingency options for peak periods, will ensure that patients in all of our communities continue to have access to high-quality care well into the future." n Why MBA programs are shutting down By Emily Rappleye A strong job market is suppressing demand for master's in business administration degrees, leading many universities to shutter their in-per- son programs in favor of online versions, The Wall Street Journal reports. From 2014-18, full-time, accredited MBA programs dropped 9 percent, while the number of online pro- grams doubled. Online offerings are popular because they are shorter, more specialized and often more af- fordable, according to the report. For example, working millennials with high levels of col- lege debt might be more likely to enroll in the University of Illinois at Urbana-Champaign's online MBA program, which costs $22,000 to complete — less than half the $58,000-plus sticker price of the traditional option. UIUC's traditional MBA program, one of the top 50 in the nation, is expected to lose $2 million this year. UIUC an- nounced it will end its on-campus MBA this year. n

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