Health Law Scan

In the complex world of Medicare reimbursement, there are a multitude of payment formulae, mathematical adjustments, and reimbursement calculations that translate congressional policy into operational payments for hospital providers. But sometimes the Centers for Medicare and Medicaid Services (CMS) doesn’t get the math right. Recently, the US District Court for the District of Columbia found that academic medical centers have been subject to one such calculation error that implicates the amount such teaching hospitals receive as payment in support of direct graduate medical education (GME). Milton S. Hershey Med. Ctr. v. Xavier Becerra, Civ. Action No. 19-2680 (May 17, 2021). Based on the court’s reasoning, teaching hospitals operating above their full-time equivalent (FTE) resident cap may have been systematically underpaid as a result of the regulatory payment formula for determining the weighted FTE amount of residents used to calculate the GME payment. Other hospitals have recently followed Hershey Medical into the DC District Court seeking similar decisions.

Our labor and employment team recently published a LawFlash analyzing the US Departments of Treasury, Labor, and Health and Human Services and Office of Personnel Management’s Requirements Related to Surprise Billing; Part 1.

Healthcare is a highly regulated space, and regulators are continuing to issue new policies and regulations to address the critical needs for goods and services to combat the coronavirus (COVID-19), while also protecting the public health. Companies beyond just healthcare and life sciences should be aware of the relevant regulatory and legal requirements to avoid enforcement and liability requests.