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Fifth Circuit Affirms Inclusion of Medicare and Private Insurance Payments in Medicaid DSH Calculation; Children’s Hospitals Petition Similar D.C. Circuit Holding to U.S. Supreme Court

This Bulletin is brought to by AHLA’s Regulation, Accreditation, and Payment Practice Group.
  • May 15, 2020
  • Janus Pan , Bradley Arant Boult Cummings LLP

In April 2020, the Children’s Hospital Association of Texas and several other children’s hospitals submitted a Petition for a Writ of Certiorari to the U.S. Supreme Court to review Children’s Hospital Association of Texas v. Azar (CHAT), a case decided by the D.C. Circuit in August 2019. CHAT held that the Centers for Medicare & Medicaid Services (CMS) could deduct Medicare and private insurance payments from hospitals’ calculations of their Medicaid Disproportionate Share Hospitals (DSH) costs, thereby lowering such hospitals’ Medicaid DSH entitlements. CHAT’s inclusion of Medicare and private insurance payments in Medicaid DSH cost calculations accords with a line of other circuit court cases, including the Eighth Circuit’s Missouri Hospital Association v. Azar (Missouri Hospital Association) decision in November 2019 and the Fifth Circuit’s Baptist Memorial Hospital – Golden Triangle, Inc. v. Azar (Baptist Memorial Hospital) in April 2020.

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