Centre County commissioners on Tuesday said they were “surprised” and “strongly disagree” with the federal government’s decision to strip Mount Nittany Medical Center of a special Medicare designation in a ruling that could cost the hospital more than $9 million a year.
Mount Nittany filed a lawsuit on Friday against the Center for Medicare and Medicaid Services and U.S. Department of Health and Human Services after the medical center was notified in April that its designation as a sole community hospital had been revoked.
Sole community hospitals receive higher rates of Medicare reimbursements and other financial protections because they are in geographically isolated areas with limited other options.
“I hope that with this lawsuit moving forward, this will be corrected because, in terms of what the designation criteria are, the hospital still meets them,” Commissioner Amber Concepcion said. “I’m hopeful it’ll be corrected. It’s certainly a serious mistake to withdraw that categorization from Mount Nittany hospital.”
Mount Nittany has held the designation since 2017 because it is 25 to 35 miles from the nearest “like hospital” and accounted for at least 75% of the total inpatient admissions of individuals residing in its service area. CMS canceled the designation after determining that Penn Highlands State College, which opened in 2024 as a campus of Penn Highlands Huntingdon, is a “like hospital” in the same geographic area.
But in its lawsuit, Mount Nittany says the agency wrongly combined data from the Penn Highlands State College campus and the main hospital in Huntingdon to make the determination.
A 260-bed facility, Mount Nittany offers more than 60 medical specialties and other services, most of which it says are not offered at Penn Highlands State College.
Penn Highlands State College advertises 18 inpatient beds, but the lawsuit says that state health department records indicate that as few as six are set up and staffed. Even at 18 beds, though, Penn Highlands State College could only total 5.5% of Mount Nittany’s total inpatient acute care days, below the 8% threshold needed to be considered a like hospital.
CMS, however, combined Penn Highlands State College’s inpatient days with those of the 71-bed Penn Highlands Huntingdon, which is about 33 miles away, to calculate a total of 23.1% of Mount Nittany’s inpatient days. That, according to the lawsuit, runs afoul of state and federal law, CMS regulations and the definition of sole community hospital, which is predicated on distance and time from the nearest like hospital.
Mount Nittany also says it has made efforts to protect the designation since 2024 and has provided voluminous materials and communications to its Medicare administrative contractor, but that none of its arguments were acknowledged or addressed in the April letter revoking the status.
Commissioner Mark Higgins said the commissioners were “surprised” by the agency’s ruling.
“We believe, according to the federal rules, Mount Nittany is still eligible for the sole community hospital designation. So we do strongly disagree with the federal ruling on this particular topic,” Higgins said.
Without the designation, Higgins said, Mount Nittany still needs to provide the same services to the same volume of Medicare patients, but do so with $9 million less annually.
“It’s kind of like a balloon. When you push one side, the other side’s going to get bigger,” he said. “So that $9 million is going to have to come from somewhere else. And whoever is going to end up paying for that nine million is probably going to be all the rest of us.”
He added that “Huntingdon County is not Centre County,” and that CMS needs to disaggregate the State College campus numbers from Penn Highlands Huntingdon.
Commissioner Steve Dershem said he found it “perplexing when you are being penalized for providing services in the case of Medicare to senior citizens.”
“I hope cooler heads will prevail and we work our way through this and get this resolved because I just hope that we can continue to provide a level of care and not impact other folks in the care system because of it,” he said.
U.S. Rep Glenn Thompson and Sens. John Fetterman and Dave McCormick “have worked really hard” to try to help Mount Nittany retain the designation, Higgins said. He encouraged residents to contact the offices of CMS Administrator Dr. Mehmet Oz and U.S. Health and Human Services Secretary Robert F. Kennedy Jr. to advocate for restoring Mount Nittany’s designation as a sole community hospital.
The county is not in a position to replace the funding for Mount Nittany, Higgins said, but the commissioners will advocate for the hospital.
“We’re very supportive of Mount Nittany,” Higgins said. “They have been a tremendous partner for the county and our affiliated agencies for decades now. And anything we can do to help the hospital on this, we’re happy to assist on.”
Mount Nittany is asking a federal district judge to reinstate its designation as a sole community hospital and vacate the CMS policy of combining data from main and remote hospital locations as unlawful. If that is not granted, the lawsuit alternatively asks for CMS, through the administrative contractor, to redetermine whether Penn Highlands State College is a like hospital using data solely for the State College campus and not combined with any other facility.
