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Memorial Hospital and Singing River Health System file second lawsuit over Medicaid underpayments

Memorial Hospital at Gulfport and Singing River Health System (SRHS) have filed a second lawsuit in Hinds County Chancery Court following a denial of their appeal to the Division of Medicaid (DOM) regarding underpayments that occurred in State Fiscal Year (SFY) 2014. The lawsuit claims that DOM has a payment methodology   that is contrary to state law. The lawsuit seeks recovery of the underpayments and legal fees. Harrison County has the second highest population of uninsured residents in the state (approximately 35,000) and Jackson County has the fourth highest population of uninsured residents in the state (approximately 25,000).

Memorial and SRHS are both public, not-for-profit health systems that serve as safety net providers for their communities and deliver critically needed care to all residents. The hospitals filed suit against DOM in late June for underpayments related to SFY 2016. Two days later, the hospitals were notified that their appeal for underpayments in SFY 2014 was denied. An appeal within the DOM for SFY 2015 underpayments remains outstanding. The outcome of this lawsuit will resolve underpayments for services provided to Medicaid beneficiaries and uninsured patients in 2014      and 2015.

“With recent actions taken by the Division of Medicaid to deny payments, coupled with a recently announced plan to phase in any further payment adjustments over a 10-year period, important services are now at risk. For Memorial, the key services are mental health and access to primary care for the uninsured,” said Gary G. Marchand, President and Chief Executive Officer of Memorial Hospital.

“It is critical that hospitals such as Singing River and Memorial are appropriately funded for the level of uninsured and underinsured services that we provide to our communities. We are optimistic that our challenges to the current funding methodology will help redistribute these statewide funds to the places that are delivering the highest levels of uninsured and underinsured care in our state,” Kevin Holland, Chief Executive Officer for SRHS, commented.

SRHS reports total underpayments of $21 million since the Division began underpaying for services provided to Medicaid beneficiaries and the uninsured. Memorial reported that underpayments have totaled $25 million.

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