April 1998 Bulletin

Supreme court approves reaudit of teaching hospitals GME costs

The Supreme Court ruled 6 to 3 that the Department of Health and Human Services can reaudit teaching hospitalsí costs used as a basis for reimbursement for physician training programs.

Regionals Medical Center (formerly St. Paul-Ramsey Medical Center, Inc.) St. Paul, Minn, challenged the Department of Health and Human Servicesí authority to reaudit, saying the hospitalís GME costs were reduced to $5.49 million from $9.98 million. From 1966 to 1985, GME expenses were reimbursed on a "reasonable cost" basis. In 1986, Congress enacted a statute that set a new methodology for future GME. By that time, the reopening period for determining 1984 GME costs under the prior methodology had expired for many hospitals. The regulations authorized a reaudit of hospitalsí 1984 base year GME costs.

Government lawyers said in the federal appeals courts case that the amounts at stake in pending legal cases exceed $100 million. The government said the reaudit was not intended to recoup overpayments made in fiscal year 1984, but to prevent future overpayments and to recoup overpayments for years in which reimbursements are not yet final.

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