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Inside Health Policy Reports: CMS to Repay Hospitals for 2019 Site-Neutral Pay Cut

On Dec. 11, 2019, Inside Health Policy reported that the Centers for Medicare & Medicaid Services (CMS) "plans to repay hospitals that sued over 2019 pay cuts from the agency’s so-called site-neutral policy. The agency has also updated the 2019 pay rates for clinic visits at certain off-campus hospital facilities to remove the cut in light of a federal court decision that said the agency didn’t have the authority to implement it."

In September 2019, a Federal Washington, D.C., District Court judge found that CMS exceeded its authority in introducing these cuts in the 2019 Hospital Outpatient Prospective Payment System (HOPPS) rule. Several stakeholder organizations filed suit against CMS in response to the final 2019 (HOPPS) rule's provision that established a new reimbursement rate for off-campus hospital outpatient department clinic visits that aligned the payment rate with that under Medicare's Physician Fee Schedule. The 2019 HOPPS rule extended these payment cuts to providers that were specifically exempted from these site-neutrality reimbursement reductions by the Bipartisan Budget Act of 2015.

Inside Health Policy reports that the "American Hospital Association, Association of American Medical Colleges and others that sued CMS over the cuts say in a Dec. 9 court notice that some hospitals 'recently received payments for claims processed over the past few weeks at the pre-2019 OPPS Rule payment rates for challenged services.' "

Inside Health Policy further reports that: "the [court] notice says that hospitals haven’t been reimbursed for claims from previous months in 2019 and the government has not 'receded from its stated intention to continue to implement in 2020 the same plan this court already vacated.' "

CMS told Inside Health Policy that it began paying hospitals the higher reimbursement rate as of Nov. 4, and that Medicare Administrative Contractors will reprocess claims previously subject to the cut during the first few months of 2019.

ACCC's policy team will provide more information when it becomes available.

Posted 12/12/2019