What’s happening: CHA prevails in Kaweah Delta Health Care District, et al. v. Becerra, the legal challenge to the Centers for Medicare & Medicaid Services’ (CMS’) low wage index policy.
What else to know: CHA has supported this litigation on behalf of its members to reverse a policy that is harmful to all California hospitals.
The U.S. Court of Appeals for the 9th Circuit ruled in favor of the hospital plaintiffs in Kaweah Delta, finding that the U.S. Health and Human Services Secretary’s policy to increase the wage index for hospitals in low wage areas and the related reduction to the inpatient prospective payment system (IPPS) standardized amount are unlawful, and that the policy must be vacated. The policy has resulted in a payment reduction to all California hospitals paid under the IPPS of approximately $120 million across federal fiscal years (FFYs) 2020-2024.
Notably, following the similar Bridgeport Hospital, et al. v. Becerra decision made in favor of hospitals, CMS eliminated the low wage index policy for FFY 2025. The interim final rule was silent on how CMS will address the policy in FFYs 2020-2024.
CHA and its legal counsel will provide additional information on the Kaweah Delta decision and next steps in a future update. For more information on CHA’s legal challenge, members can visit CHA’s website.
