Hospital groups threaten to sue over site-neutral payment cuts

Hospital groups threaten to sue over site-neutral payment cuts

The American Hospital Association (AHA) is threatening to file a lawsuit to challenge Medicare’s site-neutral payment cuts, which the Centers for Medicare and Medicaid Services (CMS) addressed in its newly released final rule to update Medicare's Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System for 2019.

  • In 2018, CMS paid hospital outpatient departments (HOPDs) $116 for routine clinical visits, while Medicare beneficiaries paid $23 copayments for the same type of visit
  • Under the final rule, CMS will reduce payments to off-campus HOPDs by 30 percent for routine clinical visits in 2019, resulting in $81 payments for such visits and $16 beneficiary copayments
  • The agency anticipates these changes will save Medicare $380 million in 2019 alone

Hospital groups, including the AHA, the AAMC and America’s Essential Hospitals, have spoken out against these updates, claiming the rule extends beyond the administration’s legal authority and fails to take into account the differences in overhead costs between physician practices and provider-based outpatient clinics. In the past, however, other physician groups, including the American Association of Family Physicians (AAFP) and the American College of Physicians (ACP), have voiced their support for site-neutral payments to bring greater consistency to health care.

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