AHA will sue to stop CMS' site-neutral payment policy

CMS released its 2019 Medicare Outpatient Prospective Payment System final rule Nov. 2, and the American Hospital Association has threatened legal action over a few of the rule's provisions.

Under the final rule, CMS is making payments for clinic visits site-neutral by reducing the payment rate for hospital outpatient clinic visits provided at off-campus provider-based departments by 60 percent. Based on a two-year phase-in of this policy, half of the total reduction will apply in 2019.

The AHA said the payment cuts to hospital outpatient clinics are "based on unsupportable analysis" and will have negative consequences for patients in rural communities.

"Congress recognized the crucial role of hospital outpatient departments in the communities they serve and, in 2015, specifically protected existing facilities from unwarranted payment reductions," Tom Nickels, the AHA's executive vice president, said in a press release. "Today's final rule could stifle hospitals' ability to modernize care to meet the needs of their patients and communities."

Mr. Nickels said the OPPS rule also ignores the difference between hospital outpatient departments and other sites of care. He cited a study conducted by KNG Health Consulting that found patients treated in hospital outpatient departments are likely to be poorer and have more severe chronic conditions than those treated in independent physician offices.

"This new rule compounds the losses the administration has imposed on hospitals serving vulnerable communities by extending the nearly 30 percent cuts in payment for 340B drugs to even more sites of care," Mr. Nickels said. "These actions clearly exceed the administration's legal authority. The AHA, joined by the AAMC and member hospitals, intends to promptly bring a court challenge to the new rule's site-neutral provisions."

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