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AHA 'Disappointed' SCOTUS Won't Hear Site-Neutral Appeal

Analysis  |  By John Commins  
   June 29, 2021

The suit was in response to the 2018 site-neutral final rule that paid hospitals the same reimbursement for some inpatient and outpatient services. 

The American Hospital Association expressed dismay this week with news that the U.S. Supreme Court declined -- without comment -- to consider the hospital lobby's appeal of a lower court ruling upholding Medicare's site-neutral payments.

The suit by the AHA and other provider stakeholders was in response to the 2018 Trump-era Outpatient Prospective Payment System final rule by the Department of Health and Human Services that paid hospitals the same reimbursement for some inpatient and outpatient services.   

"We are disappointed that the U.S. Supreme Court has declined to hear the compelling arguments in our case on payment cuts for hospital outpatient visits," AHA General Counsel Melinda Hatton said Monday.

"These cuts to hospital outpatient departments directly undercut the clear intent of Congress to protect them because of the many real and crucial differences between them and other sites of care," she said.

OPPS had reduced reimbursement rates for clinic visits at hospital-owned outpatient provider departments by 40%, to match the rates paid under the Medicare Physician Fee Schedule for office visits. CMS estimates that the OPPS final rule could save the Medicare program about $760 million annually.

The Trump administration – and now the Biden administration -- has maintained that CMS has the authority to impose payment cuts under the Bipartisan Budget Act of 2015 to reduce unnecessary and costly increases in hospital procedures.

The AHA had argued that the site-neutral cuts undercut the intent of Congress to protect hospitals.

A federal appeals court had twice ruled that HHS exceeded its statutory authority when it reduced these payments. In July 2020, however, a three-judge appeals panel unanimously reversed those decisions.

"Hospital outpatient departments are held to higher regulatory standards and are often the only point of access for patients with the most severe chronic conditions, all of whom receive treatment regardless of ability to pay," Hatton said.

"While we are disappointed, we will continue to fight to ensure the ability of all hospitals and health systems to continue to provide the essential services and programs their patients and communities need to realize their highest potential for health."

LUGPA Cheers

The Large Urology Group Practice Association, one of the few medical associations that filed a friend-of-the-court brief supporting HHS, cheered SCOTUS' decision.  

"We believe the Supreme Court made the right decision to reject the hospital industry's challenge to the site-neutral payment rule," said LUGPA President Jonathan Henderson, MD.

"The court's denial of the AHA's petition sends a clear message the argument had no merit, and more importantly, it's an acknowledgment of the value of independent practices as a crucial counterbalance to monolithic health care systems," Henderson said.

Henderson said his association would keep pushing "to level the playing field for independent physicians to fairly compete with hospitals systems to increase quality and access to care for all Medicare patients across the country."

“These cuts to hospital outpatient departments directly undercut the clear intent of Congress to protect them because of the many real and crucial differences between them and other sites of care.”

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

Photo credit: Close up of the columns of the Supreme Court building with an American flag and the US Capitol in the background. By Dan Thornberg / Shutterstock


KEY TAKEAWAYS

OPPS had reduced reimbursement rates for clinic visits at hospital-owned outpatient provider departments by 40%, to match the rates paid for clinic visits in physician offices.

CMS estimates that the OPPS final rule could save the Medicare program about $760 million annually.

The Trump administration – and now the Biden administration -- has maintained that CMS has the authority to impose payment cuts under the Bipartisan Budget Act of 2015.

The AHA had argued that the site-neutral cuts undercut the intent of Congress to protect hospitals.

A federal appeals court had twice ruled that HHS exceeded its statutory authority when it reduced these payments.

In July 2020, however, a three-judge appeals panel unanimously reversed those decisions.


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