Judge Rules Against HHS Regulation, Ensuring Continued Support for Low-Income Hospitals, But Is This Really a Win?
Judge Rules Against HHS Regulation, Ensuring Continued Support for Low-Income Hospitals, But Is This Really a Win?
A Texas district court has struck down a regulation issued by the Biden administration’s Department of Health and Human Services (HHS) in 2023.
The rule aimed to modify the payment formula for hospitals serving low-income populations under Medicare under the Disproportionate Share Hospital (DHS) program. Texas argued that this would have drastically reduced the revenue for hospitals that serve impoverished communities.
The regulation in question altered how hospitals qualify for additional payments under the DSH program. Since 2006, Texas hospitals were permitted to include patients covered under Medicaid in their DHS percentage calculation.
This enabled the state to create a pool of funds to help hospitals cover uncompensated healthcare costs, thereby ensuring that low-income patients would be accounted for in the DSH payment formula.
However, in August 2023, the HHS issued a new rule that “excluded patients receiving benefits from that pool from the DSH percentage calculation,” according to Healthcare Dive. In response, Baylor All Saints Medical Center in Fort Worth and a dozen other Texas medical facilities filed a lawsuit alleging that the rule change was illegal it would cut into their DSH revenue.
The court ruled in favor of the plaintiffs, noting that “the HHS doesn’t have the discretion to carve out patients from the calculation that the statute allows to be included.”
Judge Mark Pittman hammered home this point, arguing that since the HHS had previously approved Texas’ project, “any beneficiaries should be included in the DSH calculation.”
This ruling means Texas hospitals will continue to receive financial support for low-income patients as they will remain eligible for the higher payments associated with the DSH program.
The court’s ruling appears to be at least a temporary win for Texas hospitals. But it also illustrates the ongoing problems with managing healthcare funding for low-income populations and how putting the government in such a prominent role related to healthcare has become even more problematic.
Government involvement in healthcare has ballooned costs for medical services, placing a gargantuan burden on the backs of consumers struggling to afford to stay healthy. The crux of the matter is that consumers have very little control over their healthcare decisions.
Higher costs, along with a broken healthcare system, have created an environment in which insurance corporations, pharmaceutical companies, and the government exert a staggering level of control over how people get their healthcare.
Digging ourselves out of this morass requires a multifaceted approach that eventually gets the government out of the healthcare market. Policies that leverage Health Savings Accounts (HSAs) are a good start. By allowing people to fund these accounts without limits they can empower the individual to decide where and how they will get their treatments.
Health Savings Accounts mean that people can take care of their out-of-pocket medical expenses without requiring the approval of an insurance company. They can simply shop around for the best and most affordable treatments.
Lifting the caps on HSAs will begin the process of taking this power out of the hands of corporations and government agencies and placing it where it belongs: With the consumer.
In so doing, this will lessen dependency on the state for healthcare, which is the end result many of us want.
To sum it up, while the Texas court ruling might appear to be a critical victory for hospitals, it does little to empower the consumer. Of course, this is precisely the outcome that big government advocates desire: A band-aid solution that does nothing for the people in the long run.