Mount Nittany Medical Center Lawsuit Over Medicare Status Loss
Mount Nittany Medical Center has filed a lawsuit against the U.S. Department of Health and Human Services over the loss of its sole community hospital designation. The Centers for Medicare & Medicaid Services revoked this status effective April 1, attributing the decision to the establishment of Penn Highlands State College, deemed a comparable facility in the area.
The hospital claims this revocation threatens its financial stability, projecting a potential annual loss of approximately $9 million. This figure accounts for nearly 15% of Mount Nittany's net income, which reported a $61.2 million profit in 2024. The reduction in funding may impact the hospital's ability to sustain current services and hinder further expansions.
Since 2017, Mount Nittany has operated under the sole community hospital program, receiving additional Medicare reimbursements for serving isolated areas. Recent modifications to eligibility criteria, which now factor in proximity and patient admissions, prompted the revocation following Penn Highlands’ classification as a similar facility.
In its legal action, Mount Nittany argues that the designation of Penn Highlands diminishes its critical role in the community. Unlike Penn Highlands' smaller 10-bed emergency department, Mount Nittany offers extensive services as a Level IV trauma center with over 60 specialties.
The hospital seeks either reinstatement of its designation or interim relief during the appeals process. Mount Nittany has undertaken a thorough engagement with federal agencies, providing detailed documentation and participating in discussions with senior leadership.
Simultaneously, Mount Nittany is negotiating a new collective bargaining agreement with a union representing around 950 employees. The union supports the hospital's financial concerns, advocating for sustained investments in workforce and community services.
Despite the financial challenges posed by changes in Medicare funding, Mount Nittany Health is advancing with major capital projects. These include a $350 million patient tower and other expansions aimed at improving healthcare services in the region, reflecting the health system’s commitment to the community's well-being.