AHA files another challenge to CMS site neutral payment policy

By | January 14, 2020

Dive Brief:

  • The American Hospital Association is once again suing HHS over its policy reducing payments to off-campus hospital outpatient departments.
  • In a lawsuit filed Monday in the U.S. District Court for the District of Columbia, AHA, the Association of American Medical Colleges and three individual hospitals made the same argument that won over the court four months ago, saying the department exceeded its statutory authority in making the change and ignored congressional budget neutral requirements.
  • The hospitals are asking the court vacate the 2020 Outpatient Prospective Payment System final rule, bar CMS from enforcing it and require the agency to provide immediate payments of any amounts withheld.

Dive Insight:

Monday’s filing is the latest in an ongoing battle as hospitals fight tooth and nail against CMS’ intent to bring payments to outpatient clinics in line with those not operated by hospitals.

Judge Rosemary Collyer agreed with hospitals in September that the site neutral policy implemented in the 2019 outpatient payment rule went beyond CMS’ authority, but the agency still included the provision in its 2020 payment proposal anyway.

CMS did agree after that ruling to reprocess some of claims paid to hospitals at the reduced rate, but it’s not clear how much will be paid out as a result. The agency has also appealed the September decision.

Last month, Collyer determined she could not strike down the 2020 regulations because her decision was limited to the 2019 rule, but said CMS “clearly disregarded the substance” of the court’s earlier finding.

Hospitals agreed, and on Monday took the formal steps necessary to attempt to nix the 2020 payment rule’s site neutral policy as well. “The 2020 Final Rule is no less an impermissible flex of regulatory authority than the 2019 Final Rule, and should meet the same fate,” the plaintiffs argued in the filing.

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AHA also argues the site neutral policy is unlawful because it ignores a distinction Congress previously made between excepted hospital outpatient departments in the Medicare statute.

Hospitals say the proposal could force facilities to “make difficult decisions about whether to reduce services in response to the lowered payment rate” and warn it would reduce access to care for the most vulnerable populations.

CMS said the policy would save $ 800 million in 2020 and would make it so patients are “better able to receive care that is provided safely and is clinically appropriate.”

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