State's hospitals could lose millions through payment loophole

Minnesota's Hospital Association said the state's larger hospitals and medical systems could lose millions of dollars through some call a loophole in the federal health care law.

The association says 51 hospitals would lose a total of $8.1 million annually because of a complex change in Medicare payment formulas that will lower payments to some states and raise payments to others, such as Massachusetts, which stands to gain an estimated $275 million per year.

The Medicare payment system is deeply flawed, said Lawrence Massa, who heads the Minnesota Hospital Association,

"It's overly complex. There are these regulations that, quite frankly, can be gamed," Massa said. The U.S. Department of Health and Human Services released a statement to MPR News that said the recent payment rule simply implements the statute.