Robert Wanerman Quoted in “Supreme Court to Hear Arguments in DSH Formula Case”

POLITICO Pro Health Care

Robert E. Wanerman, Member of the Firm in the Health Care & Life Sciences practice, in the firm’s Washington, DC, office, was quoted in POLITICO Pro Health Care, in “Supreme Court to Hear Arguments in DSH Formula Case,” by Rachel Roubein.

Following is an excerpt:

The Supreme Court will hear arguments Tuesday in a major case on Medicare payments that pivots around a 2017 ruling that Brett Kavanaugh wrote while he was a circuit court judge.

At issue in Azar v. Allina Health Services is whether HHS should have solicited public comment before changing the formula for reimbursing mostly non-profit hospitals that treat a large number of poor patients. HHS argues upholding Kavanaugh’s ruling could “substantially undermine” its ability to administer the huge health program.

The nonprofits refute that argument, saying Medicare law requires the agency to seek feedback when it wants to make big changes, such as when it cut disproportionate share, or DSH, payments to the hospitals for 2012. …

Kavanaugh ruled HHS should have gone through a notice-and-comment period and is recusing himself from Tuesday’s arguments. That creates the possibility of a 4-4 high court split that would leave the D.C. Circuit Court decision in place without setting further precedent.

If this decision stands, the federal government contends CMS would have to go through more frequent lengthy rulemaking processes, specifically concerning instructions to contractors — and that this would then slow down its work on Medicare.

The hospitals say the ruling won’t lead to a significant administrative burden and require as much rulemaking as HHS claims. The case doesn’t affect the current DSH payments, which are made using a formula that went through a notice-and-comment process. …

But the D.C. Circuit ruled that Medicare law is much stricter and doesn’t include all the Administrative Procedure Act’s exceptions for notice-and-comment periods. It acknowledged it was breaking with several other appeals courts when Kavanaugh reversed a district court decision that sided with the government. …

A ruling for the hospitals could also spark more legal challenges from providers. That’s because it would give “a lot more muscle” to stakeholders who want to sue when CMS makes a unilateral decision to change the Medicare program, said Robert Wanerman, a partner with Epstein Becker Green.