376 Mass. 569 | Mass. | 1978
In 1972 the Brockton Hospital (hospital) received a cost rebate, called a nursing salary cost differential (NSD), from the Federal government on account of services rendered to Medicare patients in 1969,1970, and 1971. The Rate Setting Commission (commission) ruled that Blue Cross, which reimburses the hospital on a cost basis, was entitled to share in the rebate. In an appeal pursuant to G. L. c. 176A, § 5, the hospital seeks review of that ruling. We uphold the decision of the commission.
We summarize the facts established by the pleadings and by stipulation of the parties. The hospital has been a provider of hospital services under Medicare and Medicaid programs governed by Federal statutes. It has also
Blue Cross, Medicare and Medicaid all pay for care on the basis of the lower of the hospital’s reasonable costs or its charges, and costs are normally lower than charges. Before 1971 nursing salary costs were allocated among the three by their ratio of patient days. For periods prior to July 1,1969, Medicare paid an allowance of 2% in lieu of unrecognized costs, and no deduction on that account was made from the costs of Blue Cross. In 1971, the Secretary of Health, Education and Welfare (Secretary) promulgated the NSD regulation, retroactive to July 1,1969. 36 Fed. Reg. 12,606 (July 2,1971), as amended, 20 C.F.R. § 405.430 (1977). The Secretary’s theory was that aged patients, "on the average, receive inpatient routine nursing care that is more costly on an average per day basis than the average of the remainder of the adult nonmaternity patient population.” 20 C.F.R. § 405.430 (c)(1) (1972). The differential was fixed at 8%%, and resulted in payment to the hospital of $63,809 in 1972.
The hospital seems to argue that Federal law somehow required the double reimbursement, quoting a Federal regulation providing that “costs attributable to other patients of the institution are not to be borne by the [Medicare] program.” 20 C.F.R. § 405.402 (a) (1977). We should be reluctant to attribute to the Federal authorities a re
Finally, the hospital contends that the Medicare payments in issue were attributable to fiscal 1969,1970, and 1971, and that there was error in making the adjustment with respect to 1972 rates alone. It is clear that an adjustment of the allocation of costs among Blue Cross, Medicare, and Medicaid for one year might result in different dollar amounts from those resulting from an adjustment for another year. But we are not informed as to the calculations, and we have no way of knowing whether the difference would be significant. Absolute precision in such matters is likely to cost more than it is worth, and we think no abuse of the commission’s discretion has been shown. Cf. Employers’ Commercial Union Ins. Co. v. Commissioner of Ins., 362 Mass. 34, 42 (1972) (downward adjustment of current insurance rates to distribute past excess profits).
Decision affirmed.
"5. Cost Differential Adjustment Factors. If the principles of reimbursement or the definition of reimbursable cost applicable to any third party making payment to the provider recognize cost differentials attributable to hospital services which are specifically required, or are required in greater degree than the average, by such third party or by persons on whose behalf such third party makes payment, reduction in the relevant cost item shall be made for other third party payors to assure that reimbursement for such cost item shall not exceed the total costs incurred by the provider for that item.”
The regulation number 405.430 makes it clear that "Medicare” rather than "Medicaid” was intended.