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Lawsuit Challenges Site-Neutral Rule, Asserts CMS Overreach

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The American Hospital Association, Association of American Medical Colleges and three hospital plaintiffs filed suit against the U.S. Department of Health and Human Services challenging the 2018 final CMS Outpatient Prospective Payment System rule implementing "site-neutral payments" for clinical services at protected hospital outpatient departments (HOPDs). This rule dramatically reduces Medicare payments for clinic services delivered at all hospital-based, off-campus clinics and will result in about $750 million in cuts to HANYS' members over 10 years.

The AHA/AAMC suit asserts that CMS violated the Medicare statute's budget neutrality requirement by failing to adopt any payment increases to offset the reduction in hospital payments. Plaintiffs also assert that CMS deliberately ignored the statutory requirement that excepted and non-excepted HOPDs should be treated differently and paid at different rates. The Bipartisan Budget Act of 2015 clearly protects off-campus PBDs billing Medicare for outpatient services on or before Nov. 2, 2015, from site-neutral payment reductions.

HANYS fully supports this litigation and is actively engaging with New York Congressional Delegation members in the House and Senate to push back on the extremely harmful impact this rule would have on New York's hospitals and health systems over the next decade. Contact: Cristina Batt

Published December 7, 2018