Becker's Hospital Review

12 CFO / FINANCE Hospitals barred from suing over $840M pay cut By Ayla Ellison A group of more than 680 hospitals can't revive a lawsuit saying they lost $840 million in payments because of adjustments made by federal regulators to make up for a Medicare shortfall, according to Bloomberg Law. On Feb. 9, the U.S. Court of Appeals for the District of Colum- bia held that federal law bars the hospitals' lawsuit. At issue was whether HHS unlawfully extended a program to make up an $11 billion Medicare shortfall. Medicare was facing an $11 billion shortfall in 2013, and Congress gave HHS a mission to recoup the funds by the end of fiscal year 2017. To recoup the payments, HHS said it would gradually reduce the base rate paid for inpatient care. Though hospitals initially expected to face a net reduction of 3.2 percent in 2017, HHS announced a 3.9 percent reduc- tion — 0.7 percent more than planned — after reviewing the 2017 budget. HHS allowed the 0.7 percent reduction in Medicare reim- bursement to continue into fiscal year 2018. The hospitals ar- gued that by carrying over the cut into 2018, HHS exceeded its statutory authority and cost hospitals $840 million in lost payments. The district court dismissed the case for a lack of jurisdiction, and the hospitals filed an appeal. The appellate court held Feb. 9 that a section of the TMA, Ab- stinence Education, and QI Programs Extension Act expressly prohibits judicial review of adjustments to Medicare pay to hospitals. "We do not doubt that the hospitals felt a 'significant financial impact' from the -0.7% adjustment," the appellate court said. "But such matters are not ours to resolve. Instead our limited role is to read and apply the law th[at] policymakers have or- dained, and here our task is clear." n CMS cuts payments to 774 hospitals over patient complication rates By Ayla Ellison C MS will trim 774 hospitals' Medicare payments in fiscal year 2021 for having the highest rates of patient injuries and infections. Five things to know: 1. Created under the ACA, the Hospital-Acquired Con- ditions Reduction Program aims to prevent harm to pa- tients by providing a financial incentive for hospitals to prevent hospital-acquired conditions. Under the pro- gram, a hospital's total score is based on performance on several quality measures, including rates of infec- tions, blood clots, bedsores and other complications that occur in hospitals and might have been prevented. 2. Each year, Medicare cuts payments by 1 percent for hospitals that fall in the worst-performing quartile. The fiscal year 2021 penalties are based on patients who stayed in the hospital between mid-2017 and 2019, ac- cording to Kaiser Health News. 3. In February, CMS identified the 774 hospitals that will have their Medicare payments reduced for patients dis- charged in fiscal year 2021. The penalties will be applied as hospitals submit claims for Medicare reimbursement. 4. The hospital industry has argued the program's de- sign causes hospitals that do the best job of testing for infections to appear among the worst based on statis- tics, while those with less thorough testing might ap- pear better than they should. 5. The Hospital-Acquired Conditions Reduction Pro- gram is in its seventh year. Seventy-seven hospitals have been penalized all seven years, Kaiser Health News reported. n Nonprofit linked to medtech company would buy Mercy Hospital for $1, change its name By Alia Paavola I nsight Chicago, a nonprofit affiliated with a Flint, Mich.-based biomedical technology company, offered to purchase Mercy Hospital & Medical Center in Chicago for $1, a March regulatory filing revealed. Mercy Hosptial filed for Chapter 11 bank- ruptcy Feb. 10, but in the first week of March secured a nonbinding purchase agreement with Insight Chicago. e proposed deal comes just months before the hospital is slated to close its doors. e deal is subject to regulatory approval, but if it goes through, it would keep the 170-year- old safety-net hospital open. According to the March filing, if the deal is approved, Mercy Hospital would seek per- mission from the bankruptcy court to dis- miss the Chapter 11 proceedings and instead transition the facility to Insight Chicago. Insight Chicago said in its application that it doesn't plan to add or cut services at Mercy Hospital, but it would make changes aer talking to community stakeholders. It also plans to change the hospital's name and stop running the hospital as a Catholic facility, according to NPR affiliate WBEZ e purchase agreement comes aer months of protests from physicians, healthcare advocates and community organizers, who said that closing the hospital would create a healthcare desert on Chicago's South Side. n

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