U.S. Supreme Court Declines to Hear AHA Site-Neutral Case

July 01, 2021

In an extremely disappointing move, the U.S. States Supreme Court on June 28 opted not to take up a case brought by the American Hospital Association (AHA) against the United States Department of Health and Human Services (HHS) related to so-called "site-neutral payments."

As covered in previous issues of The Valued Voice, AHA had sued HHS under the Trump administration for site-neutral cuts made to hospital payments made initially in the 2019 Outpatient Prospective Payment System (OPPS) rule. WHA and many of its members joined a chorus of health care advocates across the country expressing frustration that these cuts are a clear violation of federal statute.

Section 603 of the Bipartisan Budget Act of 2015 explicitly exempted provider-based departments in operation prior to Nov. 2, 2015, from “site-neutral payment provisions.” Additionally, the 21st Century Cures Act, which was signed into law in December 2016 further grandfathered facilities that were in mid-build.

Nevertheless, the 2019 OPPS rule subjected off-site hospital outpatient departments to these site-neutral payments for hospital clinic visits, reducing payments by approximately $440 million over 10 years for Wisconsin hospitals.

AHA challenged the legality of these cuts and, and U.S. District Judge Rosemary Collyer initially ruled in favor of hospitals. However, HHS appealed, and the U.S. Court of Appeals overturned the prior decision, citing the Chevron deference doctrine, in which the courts give wide deference to federal agencies in administrative rulemaking so long as the court finds they are rational or reasonable. Hospitals had hoped the new makeup of the Supreme Court would prompt another look at this doctrine.

The Supreme Court did not comment on its decision not to hear this case, and it has yet to decide whether it will take up another related case on CMS cuts to 340B payments, so it is unclear whether Chevron might still get another look. Even so, it appears unlikely that a related case could impact the ability of the courts to undo the damage done by HHS on this policy.

Contact WHA Vice President of Federal and State Relations Jon Hoelter with questions.

This story originally appeared in the July 01, 2021 edition of WHA Newsletter