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Analysis

Site-Neutral Payment Judgment Reversed by Appeals Court

By Jack O'Brien  
   July 17, 2020

Chief Judge Sri Srinivasan wrote that the district court decision would be reversed since "we conclude that the regulation rests on a reasonable interpretation of HHS's statutory authority to adopt volume-control methods."

The U.S. Court of Appeals for the District of Columbia Circuit overturned a district court's ruling that the Centers for Medicare & Medicaid Services (CMS) overstepped its legal authority finalizing the site-neutral payment provisions in the Outpatient Prospective Payment System (OPPS) final rule for 2019.

In AHA v. Azar, the court ruled unanimously in favor of the Department of Health and Human Services (HHS), reversing U.S. District Judge Rosemary M. Collyer's ruling last September that CMS acted in a way that was "manifestly inconsistent with the statutory scheme" when it finalized the site-neutral payment as part of the OPPS final rule for 2019.

Related: 'Above the Law'? Judge Criticizes 2020 Rule on Site-Neutral Payments, Lets It Stand

In the opinion of the court, Chief Judge Sri Srinivasan, an appointee of President Barack Obama, wrote that the district court decision would be reversed since "we conclude that the regulation rests on a reasonable interpretation of HHS's statutory authority to adopt volume-control methods."

The ruling is viewed as a loss for hospitals and health systems, with at least one provider organization representative disheartened by the decision.

Bruce Siegel, MD, MPH, CEO of America's Essential Hospitals (AEH), issued a statement expressing his disappointment with the ruling.

"Allowing the Centers for Medicare & Medicaid Services to maintain its policy of deep cuts to payments for outpatient care will widen gaps in health care access in communities across the country," Siegel said. "Millions of people in the United States live in health care deserts and lack reliable access to health care services. With its ruling, the court leaves in place financial barriers to expanding outpatient care in our most underserved communities."

He added that AEH will call on both Congress and the Trump administration to "reverse course on this terrible site-neutral payment policy and restore access to care for all people."

In addition to the site-neutral case, the court upheld the Trump administration's expansion of short-term limited-duration insurance (STLDI) Friday morning.

Related: Court of Appeals for D.C. Circuit Upholds Trump's STLDI Expansion

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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