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Analysis

Hospital Stakeholders File Suit to Block Outpatient Payment Cuts

By John Commins  
   January 14, 2020

AHA, AAMC seek preliminary and permanent injunctions to block $800 million in cuts.

Hospital stakeholders have filed suit in federal court to block the Centers for Medicare & Medicaid Services' plans to cut about $800 million from outpatient services at off-campus, hospital-based departments in 2020.

Arguing that the nation's hospitals would suffer "concrete and imminent" harm if the cuts are applied, the American Hospital Association, the Association of American Medical Colleges, and three hospitals called for a preliminary and permanent injunction against CMS.

"If the 2020 Final Rule is left in place, Plaintiff-Hospitals and Plaintiffs AHA’s and AAMC's members face the prospect of serious payment reductions for affected services, and may have to make difficult decisions about whether to reduce services in response to the lowered payment rate," the plaintiffs wrote in their 26-page complaint, filed with the U.S. District Court for the District of Columbia.

A federal judge in December ruled that CMS had exceeded its authority when it reduced 2019 off-campus outpatient services that were grandfathered in by Congress in 2015, but she stopped short of blocking the cuts for 2020.

CMS said last month it will press ahead with the 2020 cuts, while it appeals the decision and reprocesses the 2019 payments to comply with the decision, resulting in back pay for hospitals that had their payments reduced.  

The final rule completes the two-year phase-in of the site-neutral rate, which is 40% of the OPPS rate provided for grandfathered off-campus clinics in 2020.

CMS says the site-neutral policy will reduce cost-sharing by Medicare beneficiaries to $9, saving them about $14 for each off-campus clinic visit in 2020.

“If the 2020 Final Rule is left in place, Plaintiff-Hospitals and Plaintiffs AHA’s and AAMC's members face the prospect of serious payment reductions for affected services, and may have to make difficult decisions about whether to reduce services in response to the lowered payment rate.”

John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.


KEY TAKEAWAYS

A federal judge in December ruled that CMS had exceeded its authority when it reduced 2019 off-campus outpatient services that were grandfathered in by Congress in 2015, but she stopped short of blocking the cuts for 2020.

CMS said last month it will press ahead with the 2020 cuts, while it appeals the decision and reprocesses the 2019 payments to comply with the decision, resulting in back pay for hospitals that had their payments reduced. 


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