• Thirty-eight hospitals recently filed a complaint challenging a final rule issued by the Centers for Medicare and Medicaid Services (“CMS”) that expanded its site-neutral payment policy to grandfathered, off-campus hospital departments. This follows on the heels of a lawsuit filed in December 2018 by the American Hospital Association and several other parties.
  • Under the final rule, starting on January 1, 2019, and phasing in over a two-year period, Medicare will begin paying the departments for clinical visits under the Physician Fee Schedule. Previously, Medicare often paid more for clinical visits in the hospital outpatient setting than in the physician office setting.
  • The plaintiff hospitals argue CMS exceeded its authority under the Medicare Act and directly contravened congressional intent in expanding the site-neutral payment policy to the excepted departments. “The Secretary’s unlawful rate cut directly contravenes clear congressional directives and will impose significant harm on affected off-campus hospital outpatient departments and patients they serve,” the complaint states.
  • According to the Department of Health and Human Services (“HHS”), the policy will save beneficiaries and the Medicare program an estimated $380 million in 2019 and $760 million in 2020.