PORTLAND — Eight hospitals in Maine have filed a lawsuit against the secretary of the U.S. Department of Health and Human Services over payments to care for the elderly, poor and disabled.

The lawsuit was filed Friday in U.S. District Court against Kathleen Sebelius, the head of the federal agency.

In the 11-page lawsuit, the hospitals contend Sebelius arbitrarily ruled against them in a dispute over payments the federal government makes to hospitals that treat a disproportionate share of low-income patients.

The lawsuit seeks to recoup millions of dollars the hospitals had to repay, The Associated Press reported.

The hospitals are Maine Medical Center and Mercy Hospital in Portland, Central Maine Medical Center in Lewiston, Mid Coast Hospital in Brunswick, Eastern Maine Medical Center in Bangor, Northern Maine Medical Center in Fort Kent, Southern Maine Medical Center in Biddeford and MaineGeneral Medical Center in Augusta.

The lawsuit centers on subsidies that hospitals have used for more than 20 years to help offset the cost of providing care to patients who cannot pay their bills. The goverment’s interpretion of the payments has been the subject of frequent litigation.

In general, the more Medicaid patients that a hospital includes in its inpatient tally, the bigger the extra payments will be, the hospitals said in the lawsuit.

The hospitals said they followed a 1997 ruling on how payments should be calculated and made “significant economic operational decisions” based on that ruling, according to the lawsuit.

The ruling was changed in 2005, causing the extra payments to be reduced and the hospitals to repay the funds.

The hospitals then appealed to an independent Medicare review board. That board issued a decision in March 2013 that was mixed for the hospitals and decided that the hospitals should be repaid some funds.

Then, Sebelius reviewed the decision by the board and made determinations that were unfavorable to the hospitals.

The hospitals argued that Sebelius’ decision “was arbitrary, capricious, an abuse of discretion and otherwise not in accordance with law generally,” the lawsuit said.

The hospitals want a federal judge to review Sebelius’ decision and direct her to have the hospitals repaid the money that they contend was improperly recouped from them.

 

Jessica Hall can be contacted at 791-6316 or at jhall@pressherald.com