CMS to Repay Hospitals for 2019 Site-Neutral Payment Cuts

But HHS appealing court decision, and proceeding with cuts for 2020

December 19, 2019

The Centers for Medicaid & Medicare Services (CMS) has quietly announced it will begin paying back hospitals who were impacted by site-neutral cuts in the 2019 Outpatient Prospective Payment System (OPPS) rule. In that rule, CMS cut payments for clinic visit services at off-campus hospital outpatient departments (HOPDs) to be in line with payments under the physician fee schedule. This represented an estimated loss of about $440 million over 10 years for approximately 40 Wisconsin hospitals.

CMS’ actions to repay hospitals comes in response to a lawsuit filed by the American  Hospital Association (AHA) and a decision from U.S. District Judge Rosemary Collyer, who ruled in September that the cuts were unlawful. WHA supported this lawsuit and also spearheaded an effort to gain support from Wisconsin’s Congressional Delegation pushing back at CMS, as Congress had previously exempted existing HOPDs from any site-neutral payment policy.

While this is welcome news for impacted hospitals, CMS has also announced they are appealing the court decision and will continue the planned two-year phase-in of these site-neutral cuts for FY 2020. While the AHA had urged the federal court to apply its recent ruling to block the FY 2020 cuts, the judge announced on Dec. 16 that hospitals would have to file a separate lawsuit in 2020. That means this litigation will continue to play out well into next year. WHA is continuing to keep a close watch on this issue and will provide updates as the issue progresses.

For more information, contact WHA Director of Federal & State Relations Jon Hoelter or visit WHA’s OPPS page.

This story originally appeared in the December 19, 2019 edition of WHA Newsletter