The AAMC joined the American Hospital Association, the Federation of American Hospitals, and the Children’s Hospital Association in filing an amicus brief (PDF) on June 17 to the 5th U.S. Circuit Court of Appeals in a Medicaid financing and provider tax case filed by Texas against the Department of Health and Human Services (HHS) and the Centers for Medicare & Medicaid Services (CMS).
The lawsuit challenged a 2023 CMS Information Bulletin (PDF) and provisions in the CMS’ 2024 Medicaid managed care rule that prohibit certain voluntary redistribution agreements among private parties participating in a Medicaid provider tax program. The Texas District Court set aside provisions in the CMS’s 2024 rule and the 2023 information bulletin, enjoining the agency from enforcing the CMS policy that expanded the regulatory definition of a provider tax “hold harmless” to prohibit these arrangements. The amicus brief advocates that the District Court ruling should be affirmed. Specifically, the brief argues that the CMS and the HHS improperly expanded the scope of what constitutes a prohibited “hold harmless” arrangement by disregarding a portion of the federal statute on guaranteed arrangements for payments.