Govt. Responds to Hospital Groups’ Previous Notice to the Court Re: Additional Disclosure Required In 2021 IPPS Final Rule

VIA CM/ECF

Mark Langer
Clerk of Court
U.S. Court of Appeals for the D.C. Circuit
333 Constitution Ave. N.W.
Washington, D.C. 20001

RE: American Hospital Association, et al. v. Azar, No. 20-5193 (argument scheduled October 15, 2020)

Dear Mr. Langer:

The recent Department of Health and Human Services (HHS) rule cited in plaintiffs’ 28(j) letter does not support plaintiffs.

That rule announces a new methodology (effective in FY2024) for calculating certain Medicare rates. 85 Fed. Reg. 58,432 (Sept. 18, 2020). Under the Medicare statute, reimbursement amounts for Medicare Severity diagnosis-related groups depend in part on a “weighting factor,” “which reflects the relative hospital resources used” for treating patients within a group. 42 U.S.C. § 1395ww(d)(4)(A)-(C). Under the new rule, HHS will calculate the weighting factor utilizing the median rates hospitals have negotiated with Medicare Advantage organization payers, reported by Medicare diagnosis-related group, and will reduce its reliance on chargemaster charges. 85 Fed. Reg. at 58,880-83. To implement this new methodology, the rule requires hospitals, in their Medicare cost reports, to provide to HHS their median negotiated charges with Medicare Advantage organization payers, grouped by Medicare Severity diagnosis-related group. Id. at 58,877. View details under key resources.