Washington, DC (March 12, 2002) -- The U.S. Department of Health and Human Services (HHS) today conceded that the rule eliminating the Medicaid Upper Payment Limit (UPL) cannot go into effect on March 19 as previously planned. Medicaid UPL helps hospitals provide crucial health care services to low-income working families, the uninsured and disabled. Cuts to this program will be devastating to America's hospitals.

This afternoon, HHS announced that the cuts will now go into effect on April 15, 2002. A Federal Register notice will be published shortly announcing that new effective date.

The American Hospital Association, the National Association of Public Hospitals and Health Systems, the Association of American Medical Colleges, and other hospital groups had argued in a lawsuit filed in Arkansas last Thursday (March 7, 2002) that, by law, a major rule such as this can take effect no earlier than 60 days after it is published in the Federal Register, or after a report is received by Congress, whichever comes later. The lawsuit clearly laid out the statutory basis for the assertion that the March 19th effective date was in violation of the Congressional Review Act. HHS attorneys agreed and informed the court that the effective date would be delayed.

"While it does not solve the problem in the long run, this first victory is welcome," said NAPH president Larry S. Gage, "because at the very least it will delay by almost a month the onset of extreme financial hardship for many safety net hospitals. A permanent injunction against implementation of the new regulation remains our primary goal and is essential to protect the patients and communities served by these hospitals."

"As we emphasized last week, litigation is a last resort," said AHA President Dick Davidson. "Planned cuts to the Medicaid UPL program jeopardize health care services for the needy and that's why we filed our lawsuit. While today's delay announcement is a positive development, a permanent injunction is necessary to avert fraying the health care safety net."

In addition, the lawsuit asserts primarily that HHS violated the Administrative Procedures Act (APA) and other laws, 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. 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.

List of Plaintiffs
Ashley County Medical Center, Crossett, AR
Delta Memorial Hospital, Dumas, AR
Alameda County Medical Center, Oakland, CA
Arkansas Hospital Association, Little Rock, AR
American Hospital Association, Washington, DC
Association of American Medical Colleges, Washington, DC
National Association of Children's Hospitals, Alexandria, VA
National Association of Public Hospitals and Health Systems, Washington, DC
California Association of Public Hospitals and Health Systems, Berkeley, CA
California Children's Hospital Association, San Diego, CA
Florida Hospital Association, Orlando, FL
Georgia Hospital Association, Marietta, GA
Healthcare Association of New York, Rensselaer, NY

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