WHA Leads Delegation to D.C. to Urge CMS to Abandon Site-Neutral Cuts

Wisconsin congressional members join hospital leaders in voicing concern to CMS

October 02, 2018

WHA and its hospital and health system leaders were in Washington, D.C. again last week garnering support from Wisconsin’s Congressional Delegation in an effort to get the Centers for Medicare & Medicaid Services (CMS) to rethink its proposal on site-neutral payment reductions under the 2019 Outpatient Prospective Payment System (OPPS) rule. WHA had been in Washington earlier in September educating lawmakers on this issue and its impact to Wisconsin’s health care community. If not corrected in the final rule, these changes could reduce payments to Wisconsin hospitals by $30 million in 2019 and $440 million over the next ten years.

In its proposal, CMS cited authority under SSA 1833(t)(2)(F) to control unnecessary increases in the volume of outpatient department services as a rationale for cutting reimbursements to off-campus hospital outpatient departments. CMS has called this policy “site-neutral payments,” because hospitals would be reimbursed at the same level for certain services as other outpatient providers. But rather than simply propose this policy for only new providers, CMS proposed site-neutral payment cuts at all existing off-campus hospital outpatient departments, facilities that were intended to be exempted from such cuts by Congress. Specifically, the cuts would apply to all clinic visits and any new families of services provided at both new and previously grandfathered hospital outpatient departments. 

WHA noted in its comment letter (read more) that Congress did not intend for CMS to use such authority in a way that directly conflicts with not one, but two, Acts of Congress. The 2015 Bipartisan Budget Agreement specifically grandfathered existing off-campus hospital outpatient departments and exempted them from such cuts. In addition, the 21st Century Cures Act passed in December of 2016 exempted hospitals that were in the mid-build phase as of November 2, 2015. 

To line up support against this proposal, WHA led a letter from 27 impacted hospital leaders to CMS, which it submitted as official comments to CMS. In the letter, hospital leaders reminded CMS that the agency itself recognized in 2014 that there are legitimate reasons for the current payment levels to hospitals, such as the high costs related to running emergency rooms 24 hours a day, 7 days a week, and providing this life-saving care regardless of whether patients have health insurance or can pay their bills. 

The letter also thanked CMS for its other efforts to reduce unnecessary regulations on hospitals, and suggested the agency should take a similar approach in finding ways to improve the cost-effectiveness of Medicare—noting that Wisconsin has some of the highest quality marks in the country, while being in the lower tier of Medicare reimbursements. Wisconsin’s hospital leaders proposed CMS develop alternative solutions that reward and incentivize the delivery of high-value health care, rather than the proposed site-neutral cuts.

In addition to the member letter, WHA also sent out a Hospitals Education & Advocacy Team (HEAT) alert asking HEAT members to contact their elected officials and urge them to sign onto a letter spearheaded by WHA to express their concerns to CMS. Ultimately, HEAT members contacted all 10 of Wisconsin’s members of Congress, sending 262 individual messages of support.

These combined efforts from WHA and its members led to the Wisconsin Congressional Delegation sending a letter to CMS expressing lawmakers’ concern with the proposed site-neutral cuts.  They noted it would be unfair to change the rules mid-stream and requested CMS respect the clear language of the two previous Acts of Congress exempting existing facilities from these cuts. 

WHA thanks Senators Johnson and Baldwin, and Representatives Gallagher, Grothman, Pocan, Kind, and Moore for supporting Wisconsin’s hospitals and health systems on this issue.

This story originally appeared in the October 02, 2018 edition of WHA Newsletter