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CMS to pay hospitals millions in site neutral payments for 2019

The AHA is calling on CMS to "abandon further illegal cuts for 2020" that CMS says would save Medicare $800 million.

Susan Morse, Managing Editor

The Centers for Medicare and Medicaid Services is repaying hospitals for cuts made in site neutral payments the court has upheld as unlawful.

CMS will automatically reprocess calendar year 2019 claims for hospital outpatient services provided in off-campus provider-based departments that had been grandfathered under the Bipartisan Budget Act of 2015, the American Hospital Association said on Thursday.

Starting January 1, 2020, and over the next few months, the Medicare Administrative Contractors will automatically reprocess claims paid at the reduced rate.

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The payment cuts were successfully challenged in court by the AHA and hospital organizations.


At stake was an estimated $380 million in rate cuts for 2019 due to CMS deciding to pay off-campus hospital facilities at the same lower rate as physician practices.

The cuts were based on a final rule issued by CMS in November 2018 that did away with grandfathered higher payments to off-campus facilities that were acquired or built before November 2, 2015.

But the AHA, joined by the Association of American Medical Colleges and several member hospitals, filed a lawsuit against the Department of Health and Human Services, and won.


In September, a federal judge ruled in favor of the AHA and hospital organizations, saying that the CMS exceeded its statutory authority in implementing the cuts. In October,  Judge Rosemary Collyer reaffirmed her previous order to CMS to vacate the payment cut.

Despite the court ruling, in November, CMS said it would complete a two-year phase-in of site neutral payments. The final rule for the outpatient prospective payment system saves Medicare an estimated $800 million for 2020, CMS said.

"We do not believe it is appropriate at this time to make a change to the second year of the two-year phase-in of the clinic visit policy," CMS said at the time. "The government has appeal rights, and is still evaluating the rulings and considering, at the time of this writing, whether to appeal from the final judgment."

The AHA said Thursday its general counsel is calling on CMS to "abandon further illegal cuts for 2020."


AHA General Counsel Melinda Hatton said the association was pleased that "at our urging, CMS will be repaying affected hospitals the full OPPS rate for 2019 to support the critical work they do for the patients and communities they serve. Now that a federal court has sided with the AHA and found these outpatient clinic visit cuts exceed the Administration's authority, we continue to call on CMS to abandon further illegal cuts for 2020 and to pay the full OPPS rate going forward."

Twitter: @SusanJMorse
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