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RECENT SUCCESSES
On March 11, 2008, the federal government agreed to settle the In re Medicare Reimbursement consolidated litigation, the latest round of lawsuits challenging CMS's
administration of the Medicare disproportionate share (DSH) payment adjustment enacted by Congress in 1986. CMS agreed to pay the plaintiff hospitals $666,125,000
to dismiss their lawsuits with prejudice. This settlement has been reported to be the largest ever entered between hospitals and the Medicare system. CMS's execution
of the Settlement Agreement signified the conclusion of almost two years of negotiations between a group of plaintiffs' counsel, including Sanford Pitler of Bennett
Bigelow & Leedom, and counsel for the Department of Justice and the Office of General Counsel of The Department of Health ad Human Services.
A significant number of individual lawsuits became consolidated under the In re Medicare Reimbursement banner, including Bennett Bigelow & Leedom's Slidell v.
Thompson litigation. Bennett Bigelow & Leedom filed its lawsuit back in February of 2003 on behalf of twenty-three hospitals located in Oregon, Louisiana, Florida,
Illinois, and Texas. Bennett Bigelow & Leedom's lawsuit, like all individual lawsuits consolidated in the In re Medicare Reimbursement case, sought a court
order requiring Medicare Fiscal Intermediaries to reopen all cost reports finalized within three years of the February 27, 1997 effective date of CMS's Ruling 97-2.
By this Ruling CMS (then known as HCFA) acquiesced to the decisions of numerous federal courts invalidating CMS's prior interpretation of the DSH Medicaid fraction
as only including inpatient days paid for by a state Medicaid program. Ruling 97-2 made clear that all inpatient days attributable to Medicaid eligible patients
had to be included in the DSH calculation regardless of whether Medicaid paid for the day or service. Bennett Bigelow & Leedom participated in the seminal case
in the DSH area, Jewish Hosp., Inc. v. Dept. of HHS, 19 F.3d 270 (6th Cir. 1994); Bennett Bigelow & Leedom handled outright many of the other cases that led to
CMS's renunciation of its DSH paid days interpretation including: Baptist Hospital v. Shalala (Tennessee - Settled)); Legacy Emanuel Hosp. & Health Ctr. v. Shalala,
97 F.3d 1261 (9th Cir. 1996); Incarnate Word Health Services Fort Worth Healthcare Corp. v. Shalala, No. 3:95-CV-0851-R (N.D. Tex., Oct. 10, 1996); Baptist Memorial
Hospital System v. Shalala, No. H-97-1764 (S.D. Tex. April 2, 1998); and Anadarko v. Shalala, CIV-97-288-A (W.D. Okla. April 13, 1998).
The Plaintiff counsel team, including Bennett Bigelow & Leedom's Sandy Pitler, not only worked on the negotiation of the federal settlement, but also worked with
others to assist the 666 hospitals in reaching agreement upon an appropriate allocation of the global settlement amount. The Plaintiff counsel team also drafted
the various settlement documents used with the plaintiff hospitals, as well as drafted and negotiated the terms of the settlement agreement with the responsible government
attorneys. Even though these negotiations presented extremely complex issues, and became protracted, the Plaintiff counsel team and the larger group of hospital counsel,
consultants, and representatives maintained a unity of function and purpose. One hospital consultant described Mr. Pitler as a driving force in the group through his leadership, work and effort.
Should you have questions regarding the In re Medicare Reimbursement litigation settlement, or questions regarding any aspect of the Medicare DSH calculation, please feel
free to contact Sandy Pitler of Bennett Bigelow & Leedom at (206) 622-5511 or pitler@bbllaw.com
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