One health system has already filed a lawsuit, could it happen to you?
The Supreme Court’s reversal of the so-called Chevron case could impact many healthcare organizations’ revenue cycle operations.
Under the initial ruling made in 1984, judges would defer regulatory disputes to federal agency interpretations of a law. With the Supreme Court voting 6-3 to roll back this decision, the healthcare sector may see a wave of litigation around reimbursement and insurance eligibility.
On June 3, the same day the Chevron deference was overturned, Hackensack Meridian Health filed a lawsuit against the Centers for Medicare and Medicaid Services (CMS). The New Jersey-based health system claims the low reimbursement rates for Medicaid Disproportionate Share Hospital payments have cost three of its hospitals—University Medical Center, Jersey Shore University Medical Center, and Raritan Bay Medical Center—almost $600,000.
In a statement on the system’s website, health system leaders claim that CMS “deprived hospitals of some of reimbursements they are due and the data to check their reimbursement rates.”
“The lawsuit also challenges CMS’ refusal to enable hospitals to effectively employ the congressionally mandated procedures for obtaining relief from these underpayments,” the statement said.
In addition to increasing its DSH payments, as part of the lawsuit, the system wants the interpretation of a low-income patient to be broadened.
Hackensack Meridian Health’s lawsuit could be the first of many to challenge CMS’ reimbursement rules. With more flexibility around the interpretation of a law, providers have some leverage when beginning legal proceedings.
However, the odds aren’t entirely in their favor. Judges may opt to ignore federal agency interpretations of laws in favor of exercising independent judgement, which could mean inconsistent rulings for similar cases.
The overturning of the Chevron deference may make it harder for HHS’ future efforts—which could have a negative effect on public health. Proposed rules for minimum staffing requirements in nursing homes and the development of new programs are now prone to being challenged.
Jasmyne Ray is the revenue cycle editor at HealthLeaders.
KEY TAKEAWAYS
The healthcare sector may see a wave of litigation around reimbursement and insurance eligibility.
Hackensack Meridian Health filed a lawsuit against CMS shortly after the ruling, claiming three of its hospitals have suffered losses due to low reimbursement rates.