Hospitals sue Obama administration for refusing Medicare payments

The American Hospital Association (AHA) is suing the Obama administration over Medicare payments it says are owed its members.

Four hospital systems joined the AHA in the suit, filed Thursday. The groups argue that the Department of Health and Human Service breaks the law when it demands that hospitals repay Medicare for services that could have been provided on an outpatient basis.

"What the federal government is doing is wrong, unfair and a clear violation of federal law,” said Rich Umbdenstock, president and CEO of the AHA, in a statement.  

At issue are government auditors who judge whether hospitals should have admitted Medicare patients or arranged their care on an outpatient basis. If an auditor decides that a hospital did not need to admit a Medicare patient, the hospital must return the money it received for that patient's care.

The AHA asked the court to overrule this policy and return money to hospitals.

"Doctors and nurses provide the best care possible using their medical judgment and training," Umbdenstock said. "Allowing government auditors to second-guess these difficult medical decisions about where to best treat a patient years later based on a cold record and then refuse to pay for that care is indefensible."

The suit was filed in the U.S. District Court for the District of Columbia.

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