Supreme Court upholds site-neutral pay cuts

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The U.S. Supreme Court on June 28 declined to hear an appeal challenging HHS' site-neutral payment policy, allowing reimbursement cuts to move forward, according to Bloomberg Law

In its final Outpatient Prospective Payment System rule of 2019, 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.

In an attempt to overturn the rule, the American Hospital Association and dozens of hospitals sued CMS, arguing that it exceeded its authority when it finalized the cuts in the rule.  

A federal judge initially sided with the AHA and other hospitals in 2019, ruling that CMS overstepped its authority when it expanded the site-neutral pay policy. But the U.S. Court of Appeals for the District of Columbia Circuit reversed that decision in July 2020. The appellate court found that HHS reducing the reimbursement rate for off-campus, provider-based departments' evaluation and management services falls within its authority to control increases in the volume of outpatient services. 

The AHA and other hospitals then asked the Supreme Court to take up the case while HHS asked the highest court to keep the payment cuts in place. 

The Supreme Court didn't elaborate on why it declined to hear the AHA's appeal. 

"We are disappointed that the U.S. Supreme Court has declined to hear the compelling arguments in our case on payments cuts for hospital outpatient visits," said Melinda Hatton, AHA's general counsel, in a statement emailed to Becker's. "These cuts to hospital outpatient departments directly undercut the clear intent of Congress to protect them because of the many real and crucial differences between them and other sites of care. Hospital outpatient departments are held to higher regulatory standards and are often the only point of access for patients with the most severe chronic conditions, all of whom receive treatment regardless of ability to pay. While we are disappointed, we will continue to fight to ensure the ability of all hospitals and health systems to continue to provide the essential services and programs their patients and communities need to realize their highest potential for health."

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