- The American Hospital Association and the American Association of Medical Colleges (AAMC) are suing HHS over Medicare site-neutral payment rules that will go into effect next year, saying the regulation will harm the most vulnerable Medicare beneficiaries.
- Contained in the final Outpatient Prospective Payment System rule from CMS, the policy will equalize payments for office visits regardless of whether they're in a hospital-owned outpatient or a traditional doctor's office. CMS said in November the policy will save Medicare $380 million in 2019.
- The lawsuit, filed in the U.S. District Court for the District of Columbia, argues that the rule violates a Congressional mandate that all payment policies targeting specific services, such as office visits, must be budget neutral. "CMS may not contravene clear congressional mandates merely because the agency wishes to make cuts to Medicare spending," the complaint reads.
By filing the official complaint, AHA is following up on the vow it made to sue over site neutrality on the day the OPPS rule was finalized. CMS Administrator Seema Verma said in a statement at the time that the rule helps create "a level playing field" for providers and removes "unnecessary and inefficient payment differences so patients can have more affordable choices and options.”
AHA and AAMC are arguing that CMS' intent to create affordability and choice for patients is misguided, and that site neutral reimbursements will actually harm beneficiaries.
The "ill-advised and unlawful payment reduction," AHA said in a statement, "threatens access to care and hospitals' and health systems' ability to continue to meet the needs of their patients, especially those with the most complex needs and those in vulnerable communities."
Physician groups, many of which continue to be absorbed by large health systems, have supported site neutrality. A 2015 JAMA study found that payments for office visits in a hospital-owned setting were $68 higher than for those at stand-alone offices.
In its comments on the proposed OPPS rule, the American Association of Family Physicians (AAFP) said it "strongly supports site-neutral payment policies," and encouraged CMS to finalize the proposal as it was.
AHA and AAMC assert in the complaint that the OPPS rule makes hospitals and their most vulnerable patients "face concrete and imminent harms –– both economic and noneconomic."
"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," Rick Pollack, CEO of AHA, said in a statement. "In addition, only hospitals provide 24/7 access to care for patients, regardless of their ability to pay, hospitals are held to far higher regulatory requirements, and hospital outpatient departments in inner cities and rural areas are often the only sites of care that provide the services they do."
In all, the OPPS rule — site-neutral payments considered — raises reimbursement 0.6%, for nonprofit hospitals and 1% for for-profit hospitals, according to CMS. The proposed rule contained higher site-neutral cuts and would have created a net negative for nonprofit hospitals, but the final rule spreads those cuts out over two years.
The lawsuit follows on the heels of a separate lawsuit AHA and other industry groups filed against HHS in September over the 340B drug pricing program. Last week, HHS finalized a rule in response to the lawsuit that AHA and its fellow plaintiffs lauded.