Washington hospital to move forward with expansion as payment cuts loom

Port Angeles, Wash.-based Olympic Medical Center will maintain primary care and specialty services in Sequim, Wash., despite CMS' plans to continue cutting Medicare reimbursement rates for hospital outpatient clinic visits provided at off-campus provider-based departments, OMC CEO Eric Lewis told the Sequim Gazette.

Mr. Lewis told the newspaper OMC is budgeting to complete the expansion of the Olympic Medical Cancer Center in Sequim in 2020 and, despite the cuts, plans to add three primary care exam rooms that are needed to meet current patient needs.

"We have planned for this and we will be maintaining all services that we have in the Sequim campus and all throughout OMC," he said.

Mr. Lewis told the Gazette the hospital is also planning for the next cancer center expansion and has moved services at a clinic in Port Angeles to the hospital's main campus to offset costs.

But the CEO highlighted how the planned cuts will affect OMC and rural areas over time.

He told Becker's Hospital Review: "OMC can manage this cut in 2020, but this policy over the next decade will cost OMC $47 million. Consequently, this creates a big problem in our ability to meet the growing needs of our community over the next 10 years."

"This policy really hurts safety-net hospitals in rural communities by reducing access to essential physician services," he added.

The CEO's remarks come amid a legal battle over cuts to Medicare reimbursement rates for off-site clinics.

Earlier this year, the American Hospital Association, the Association of American Medical Colleges and dozens of U.S. hospitals, including OMC, sued the federal government, alleging CMS overstepped 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 were made under the 2019 Medicare Outpatient Prospective Payment System final rule, with a two-year phase-in for this policy.

On Nov. 1, CMS announced it will finish phasing in the policy, after a Washington, D.C., federal court ruled Sept. 17 in favor of the American Hospital Association and backed that decision in an October ruling. CMS can still appeal. 


More articles on healthcare finance: 

Florida hospital board recoups an additional $1.3M from CMS tied to pre-HCA lease
CMS finalizes home health payment rule for 2020: 8 things to know
Miami safety-net health system hopes upgrades will draw insured patients

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