On June 28, the U.S. Supreme Court said it would not review a case brought forth by the American Hospital Association (AHA) and other hospital groups challenging a Centers for Medicare and Medicaid (CMS) rule that reduced by 60 percent the Medicare rate for hospital outpatient clinic visits provided at off-campus provider-based departments (PBDs) starting in 2019.
At the time, CMS argued a rule change was needed because the difference in payment rates was unnecessarily shifting services away from the physician’s office to the hospital outpatient department (HOPD) because of the higher payment that is made under the outpatient prospective payment system, as compared to payment under the physician fee schedule.
The AHA argued CMS exceeded its statutory authority because off-campus PBDs were exempted when “site neutral” policies were passed by Congress in November 2015.
A federal judge sided with the hospitals in the lawsuits, but the Trump Administration won on appeal before the D.C. Circuit Court of Appeals last summer.
The Supreme Court ruling could embolden CMS and policymakers to expand site-neutral policies, including by equalizing payment rates for services provided in the HOPD and ambulatory surgery centers (ASCs). If hospital payment rates were reduced to the lower rates paid to ASCs, that would suggest ASCs are being paid adequately for the services they are providing, which is not always the case. ASGE has encouraged policymakers to examine payment adequacy by site of service and avoid race-to-the-bottom payment policies that would ultimately harm both HOPDs and ASCs.