Hospital groups file lawsuit over site-neutral payment rule

The American Hospital Association, the Association of American Medical Colleges and three hospitals filed a lawsuit Nov. 4 against the Department of Health & Human Services alleging a recent Centers for Medicare & Medicaid Services’ final rule to cut Medicare payments to hospital outpatient departments exceeds the agency’s statutory authority. The rule finalizes a policy to phase-in, over two years, a reduction in payments for hospital outpatient clinic visits furnished in off-campus provider-based departments that are grandfathered in under Section 603 of the Bipartisan Budget act of 2015.

The plaintiffs allege the cuts undercut the clear intent of Congress to protect hospital outpatient departments because of crucial differences between them and other sites of care. Patients who receive care in a hospital outpatient department are more likely to be poorer and have more severe chronic conditions than patients treated in an independent physician office.