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November 14, 2018

6th Circuit Affirms District Court Ruling On Medicaid DSH FAQs While Upholding Underlying Policy

On November 14, 2018, in a 2-1 decision, the 6th Circuit affirmed a summary judgment ruling that CMS Medicaid DSH third party payer FAQs are procedurally invalid, while holding that CMS has the statutory authority to require the inclusion of Medicare and commercial payments in the calculation of the Medicaid disproportionate share hospital (DSH) limit if done through notice and comment rulemaking. The case before the 6th circuit was initiated before CMS promulgated a 2017 final rule adopting the policy in the FAQs, so the validity of that rule was not at issue. This judgment stands apart from all the other rulings across the country that have enjoined the FAQs and/or CMS’ final rule on substantive grounds, determining that CMS does not have the authority to promulgate the policy.