Federal judge backs hospitals in decision on site-neutral pay cuts

A Washington, D.C., federal judge on Oct. 21 denied CMS' requests to modify and stay a previous court ruling on site-neutral pay cuts.

In September, U.S. District Judge Rosemary M. Collyer ruled in favor of the American Hospital Association, deciding that CMS exceeded its statutory authority in 2018 when it expanded a site-neutral pay policy that cut the reimbursement rate for evaluation and management services provided at off-campus provider-based departments. The 60 percent Medicare payment cuts for hospital outpatient visits, amounting to hundreds of millions of dollars, were made under the 2019 Medicare Outpatient Prospective Payment System final rule.

After the September decision, CMS asked the court to modify its ruling and asked for a 60-day stay of the order while it considered an appeal, according to the Oct. 21 ruling, which is posted on the American Hospital Association website. Judge Collyer denied CMS' requests.

"The court determined that CMS put forth an impermissible interpretation of the statutory scheme; no amount of new data or reasoning on remand can save its interpretation," she wrote in the eight-page decision.

Judge Collyer also said her Sept. 17 decision granting hospitals' motion for summary judgment was the appropriate decision and that "CMS has not established that a stay is appropriate at this time."

The most recent court decision comes after the American Hospital Association, the Association of American Medical Colleges and various U.S. hospitals sued HHS earlier this year, alleging HHS overstepped its authority in finalizing the site-neutral pay cuts.

The American Hospital Association said in a statement: "Now that Judge Collyer has ruled against both the government's motion to reconsider her opinion and the motion for a stay, the AHA expects CMS to comply with today's order and promptly repay the impacted hospitals to support the work they do for the patients they serve."


More articles on healthcare finance: 

UnitedHealthcare's policy will limit outpatient surgery payments to hospitals
Massachusetts governor unveils healthcare legislation to cut costs, boost care access for patients
New York law aims to end massive out-of-network hospital emergency charges

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