HHS is appealing a district court ruling that found CMS overstepped its authority last year when it expanded a site-neutral pay policy that cut Medicare payments for hospital outpatient visits by hundreds of millions of dollars, according to Bloomberg Law.
Under the 2019 Medicare Outpatient Prospective Payment System final rule, CMS made payments for clinic visits site-neutral by reducing the payment rate for evaluation and management services provided at off-campus provider-based departments by 60 percent.
In an attempt to overturn the rule, the American Hospital Association, the Association of American Medical Colleges and dozens of hospitals across the nation sued HHS. They argued CMS exceeded its authority when it finalized the payment cut in the OPPS rule. They claimed the site-neutral payment policy violates the Medicare statute's mandate of budget neutrality and Congress's directive that excepted provider-based departments be reimbursed at OPPS rates and not at lower payment rates CMS applies.
In September, a Washington, D.C., federal judge ruled in favor of the hospitals, concluding that CMS failed to follow the statutory process for setting Medicare rates when it finalized the OPPS rule.
HHS is now asking the U.S. Court of Appeals for the District of Columbia to review the decision, according to Bloomberg Law.
The American Hospital Association said the appeals court will likely come to the same conclusion as the lower court.
"We are confident an appeals court will affirm the district court's decision confirming congressional intent to protect these hospitals from punitive reductions in payment," Melinda Hatto, AHA general counsel, said in a release.
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