December 5, 2016

The federal government owes St. Anthony Regional Hospital an additional $1.5 million to help offset losses from a year in which hospital admissions dropped, the hospital alleges in a lawsuit it filed last week.

Under Medicare — the federal health insurance program for those who are 65 years or older — rural hospitals like St. Anthony are entitled to an additional payment if there is at least a 5-percent decrease in the number of patients it serves in a given year.

St. Anthony had a 7-percent decrease in fiscal year 2009, and it sought a total payment of close to $2 million.

But a federal administrator determined the hospital was owed just $440,000.

The dispute centers on how to classify some of the hospital’s expenses for that year.

Medicare reimburses hospitals for losses in “fixed or semifixed” costs. The federal administrator determined that much of what the hospital claimed was fixed or semifixed was actually variable, including: laundry service, food service, drugs, operating room supplies and others.

Last year, St. Anthony appealed the administrator’s decision to the Provider Reimbursement Review Board, which decided in August the payment should be about $1.7 million. However, the federal administrator argued the board improperly calculated the payment.

So St. Anthony filed the federal lawsuit in the northern district of Iowa to have a judge decide who is right.

The hospital seeks about $1.5 million, which is the difference between what St. Anthony thinks it is owed for 2009 and the actual payment it received.

It’s unclear when the lawsuit will conclude.