On Friday, September 25, 2020, the U.S. District Court for the Northern District of Illinois held that the Centers for Medicare and Medicaid Services (CMS) improperly disallowed claims for $140 million in Medicaid reimbursements, because the method used by Illinois to adjust the particular payments was a reasonable interpretation of the Illinois state Medicaid plan. 

The court found that the state plan’s disproportionate share hospital plan provision in question could be interpreted as requiring Illinois to employ either a prospective or retrospective method to calculate the amount of supplemental payments to hospitals that serve a higher number of low-income patients.