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May 23, 2008

Judge Orders HHS to Vacate Medicaid Rule

A U.S. District Judge today ordered the U.S. Department of Health & Human Services to vacate a regulation on imposing a cost limit on Medicaid payments to governmental providers. The order was the result of a lawsuit filed by a coalition that included the American Hospital Association, the National Association of Public Hospitals and Health Systems, and the Association of American Medical Colleges. The suit claimed that:

1. HHS overstepped its authority in dictating to states the governmental status of entities within their jurisdiction;
2. Congress barred the agency from imposing a cost limit on Medicaid payments to governmental providers; and
3. HHS improperly issued the rule on the very day (May 25, 2007) that a Congressional moratorium blocking the rule took place. 

In vacating the rule, the judge remanded the matter back to the agency. The judge did  not rule on the merits of the rule itself, saying it was premature.

To see the judge's ruling, click here.