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Coast Hospitals Sue State Division of Medicaid
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The Mississippi coast’s two largest health care systems are suing the state Division of Medicaid. MPB’s Evelina Burnett reports, the lawsuit is over what they say is a flaw in the funding formula for hospitals that provide care to uninsured patients and those with Medicaid.

Memorial Hospital at Gulfport in Harrison County and Singing River Health System in Jackson County say that together they will be underpaid more than $20 million this year.

Memorial's president and CEO, Gary Marchand, says the lawsuit stems from a new Medicaid hospital payment program enacted in 2015.

“Our expectation was that new law, that new payment program, would come along with a new payment model," he says. But, "as we’ve reached the end of the current fiscal year, we received confirmation from the Division of Medicaid that we are not going to be paid our full cost.”

In Memorial’s case, it learned it would be underpaid by $10 million. The lawsuit seeks to recover the underpaid Medicaid funds for 2016 and to change the formula to prevent underpayments in the future.

"We cannot go on being underpaid $10 million year after year after year, and think that it's not going to impact our ability to provide services," he says. "So we felt like the lawsuit -- given it was a new Medicaid program with a new payment model -- that the time was right to file a lawsuit to get these questions answered."

In a statement, the Division of Medicaid said it “follows state law and federal regulations set forth in the State Plan, which is approved by the Centers for Medicare and Medicaid Services."