Washington, DC, March 7, 2002 -- To overturn federal regulations that jeopardize heath care services for the poor, uninsured and disabled, the National Association of Public Hospitals and Health Systems (NAPH), the American Hospital Association (AHA) along with the National Association of Children's Hospitals, and the Association of American Medical Colleges and hospitals and hospital associations in California, Florida, Georgia, Arkansas and New York -- today filed suit against the U.S. Department of Health and Human Services (HHS).

The suit seeks an injunction to halt arbitrary and capricious Medicaid UPL rules that result in disabling cuts to the Medicaid program - totaling $27 billion over ten years. If allowed to go forward in their present form, these rules would "cause a massive financial devastation of the nation's public hospitals," according to NAPH president Larry S. Gage. Medicaid funds, provided through a special public hospital payment, help hospitals that provide necessary services to hundreds of thousands of Americans who lack access to health care.

The lawsuit outlines the immediate adverse impact on low-income working families, the disabled and uninsured, including curtailed services, shortened clinic hours and fewer new patient admissions for inpatient and outpatient care. Late in 2001, Congress specifically requested that the Administration carefully consider the impact of any change in special public hospital payments, and not act precipitously to eliminate them. Despite this Congressional directive, the Administration moved ahead with these regulations.

AHA president Dick Davidson added, "America's hospitals are the essential foundation of our nation's health care system. They are an indispensable partner in the public health infrastructure. They ensure access to care to our most vulnerable citizens. And they are the providers of trauma care in many communities. Now, in this time of economic uncertainly, is the wrong time to restrict crucial health care services to our nation's neediest citizens or impose further financial burdens on state Medicaid budgets and financially fragile hospitals."

The suit, filed in United States District Court for the Eastern District of Arkansas Court in Little Rock, Arkansas, asserts primarily that HHS violated the Administrative Procedures Act (APA), in promulgating the final UPL rules and, in doing so, made an arbitrary and capricious decision that will cause irreparable harm to the nation's public hospitals and the patients they serve.

"We have repeatedly made the case that this program is essential to the financial stability of the nation's public health infrastructure," said Gage. "Even the Congress asked HHS to consult with hospitals, consumer groups, and the Hill before making radical changes to these Medicaid funds," he continued, "but HHS has given the hospitals and the Congress short shrift and pushed these funding cuts through in violation of the APA."

"With all of the pressures on the nation's economy and the nation's public hospitals, including major cuts in Medicare and Medicaid funding in prior years and increasing numbers of uninsured Americans, and with the renewed emphasis on the role of public hospitals in disaster preparedness, these new cuts place the future of America's healthcare safety net in jeopardy," said Gage.

# # #

# # #

The Association of American Medical Colleges is a not-for-profit association representing all 130 accredited U.S. and 17 accredited Canadian medical schools; nearly 400 major teaching hospitals and health systems, including 68 Department of Veterans Affairs medical centers; and nearly 90 academic and scientific societies. Through these institutions and organizations, the AAMC represents 125,000 faculty members, 70,000 medical students, and 104,000 resident physicians. Additional information about the AAMC and U.S. medical schools and teaching hospitals is available at www.aamc.org/newsroom.

Contact Us    © 1995-2008 AAMC    Terms and Conditions    Privacy Statement