WILLMAR -- Rice Memorial Hospital has received a $500,000 settlement as part of a successful class-action suit against the U.S. Centers for Medicare and Medicaid Services.
The suit alleged that Medicare miscalculated its payment rates for sole community hospitals, resulting in underpayments from the federal health care program for at least the past five years.
Word of the settlement was shared this past week with the hospital board's finance committee.
The $500,000 lump-sum payment is "a one and done kind of thing," said Bill Fenske, chief financial officer.
But as a result of the settlement, Rice and the other sole community hospitals that were part of the class action also will be receiving a higher reimbursement rate, he said. "We will continue to see a $110,000 increase to our Medicare rate each and every year."
Rice was one of three sole community provider hospitals in Minnesota that were part of the lawsuit.
About 2,000 hospitals in the United States have sole community provider status. About 1,000 joined the class-action suit, which was initiated about four years ago, Fenske said.
Rice is also part of two other class actions involving reimbursement rates that haven't yet been settled, he said. "We expect those lawsuits will continue in a similar fashion with similar results."