Virginia Hospitals & Physicians File Federal Lawsuit Over Medicaid Rate Cut For Potentially Preventable Emergency Department Visits & Readmissions

On July 31, 2020, Virginia hospitals and health care trade associations for medical professionals sued the state Department of Medical Assistance Services (DMAS) over a new policy that automatically cuts Medicaid reimbursement for potentially preventable emergency department visits and hospital readmissons. The policies went into effect on July 1, 2020. DMAS created a list of 790 diagnoses that it considers preventable with proper primary care.

The plaintiffs are the Virginia Hospital & Healthcare Association (VHHA), The Medical Society of Virginia (MSV), and Virginia College of Emergency Physicians (VACEP). They are challenging two budget measures implemented in April 2020 that affect . . .