WHA Joins Other Hospital Associations in Medicare DSH Amicus Brief

December 27, 2018

WHA joined several other state hospital associations in submitting a joint amicus brief to the United States Supreme Court in a case impacting payments to Medicare Disproportionate Share Hospital (Medicare DSH) program hospitals across the country, including 44 hospitals in Wisconsin.  

The case, Azar v. Allina Health Services, involves a change in the formula utilized by the federal Department of Health and Human Services (HHS) for calculating Medicare DSH program reimbursement adjustments for fiscal year 2012 that occurred without notice and opportunity for comment. Specifically, in 2014, HHS directed its fiscal intermediaries to utilize a revised Medicare DSH program reimbursement formula for 2012 that would result in reduced reimbursement for all Medicare DSH hospitals in 2012.  

The joint hospital association brief argues that the D.C. Circuit Court of Appeals’ opinion—written by then-Circuit Judge Brett Kavanaugh—was correct in holding that the 2012 rate change is invalid because HHS did not utilize rulemaking procedures, including public notice and comment procedures.  

“As the D.C. Circuit has repeatedly observed, the rule at issue in this case itself may have an enormous financial impact on these institutions. Yet, notwithstanding the importance of the program, the effect of changes to it are not always intuitive,” wrote Attorney Chad Golder, Munger, Tolles & Olson LLP, in the joint hospital association brief.

“The combination of these two factors…underscores a key point that amici respectfully ask this Court to bear in mind as it considers this case: when it comes to the DSH program, notice and comment procedures are an essential component of rulemaking,” states the amicus brief. “Without notice-and-comment, [HHS] may fail to fully understand the range of consequences that a rule-change will have on hospitals. Put simply, notice-and-comment is vital to the successful administration of the DSH program.”

It is expected the U.S. Supreme Court will issue an opinion on the case sometime in 2019.

This story originally appeared in the December 27, 2018 edition of WHA Newsletter