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Letting hospitals be both rural and urban

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Some regulatory experts believe that a federal appeals court decision over hospital classifications could save millions of dollars for hospitals across the country.

The 2nd U.S. Circuit Court of Appeals has invalidated a Medicare regulation that says certain hospitals can’t be classified as both rural and urban.  Many hope that  the decision, combined with an earlier similar one in a different circuit, will inspire the government to change the regulation across America so that hospitals, according to their financial needs, can be termed over time both rural and urban.

In 2000, HHS Secretary Donna Shalala issued a  “reclassification rule” that barred hospitals that had been reclassified from urban to rural from then getting an additional reclassification as urban.

But three-judge panel on  Feb. 4  invalidated that regulation, saying that it didn’t fit the plain language of the law and exceeded the HHS secretary’s authority.

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