- The American Hospital Association (AHA) and the Association of American Medical Colleges (AAMC) have filed a lawsuit against the Trump Administration advocating against the site-neutral payment rule included in the 2019 Outpatient Prospective Payment Schedule (OPPS) final rule. Site-neutral payments threaten patient access to care, the plaintiffs argue.
Site-neutral payments create payment parity between physician offices and outpatient hospital clinics that deliver similar “check-up” services, according to the rule, which was finalized in November 2018. Currently, outpatient hospital clinics receive larger payments for these types of visits, a move the previous administration said came because outpatient hospital clinics need more funds to operate.
The current HHS administration says both sites deliver the same type of care and therefore should receive similar payments. Making site-neutral payments will give patients the freedom to seek whichever care site they choose without large financial implications for the Medicare program.
The change could also have a positive impact on patients, who stand to save nearly $150 on copayments for visits to outpatient hospital clinics, HHS reported.
But that is not the reality, AHA and AAMC contend in the lawsuit. These payment cuts threaten patient access to care, especially for vulnerable patients who manage multiple chronic illnesses and who experience adverse social determinants of health.
Additionally, the plaintiffs argue that HHS is acting outside of the law to implement those payment changes.
“These cuts directly undercut the clear intent of Congress to protect hospital outpatient departments because of the real and crucial differences between them and other sites of care,” said Rick Pollack, president and CEO of the AHA. “For example, 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.”
Full OPPS payments are essential for hospital outpatient clinics, which Pollack said must meet certain demands when delivering care.
“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,” he explained.
AAMC president and CEO Darrell G. Kirch, MD, agreed, stating that hospitals need more resources to meet the needs of the populations who seek care in hospital outpatient clinics. As noted above, these patients often management multiple chronic conditions and an adverse set of social determinants of health.
“It is alarming that CMS continues to propose cuts that will harm the teaching hospitals that provide care to the most vulnerable patients, including Medicare beneficiaries. Patients who seek care at teaching hospital off-campus outpatient departments often can only find care at these institutions,” Kirch said in a statement. “Successfully managing the complex medical needs of these patients requires considerable resources and coordination, and hospital outpatient departments are best positioned to provide that level of care.”
These threats to patient care access are at the crux of AHA and AAMC’s issue with the 2019 OPPS final rule, but the lawsuit centers on agency overreach.
“Congress also has established a clear structure for CMS to make annual changes to payments for covered hospital outpatient services under Medicare,” the lawsuit says.
“Changes to payments that target only specific items or services must be budget neutral. And yet in an unprecedented assertion of the agency’s authority, the Final Rule purports to do precisely what Congress has expressly prohibited: CMS seeks to reduce total payments for covered hospital outpatient services for calendar year (CY) 2019 by hundreds of millions of dollars by targeting a select group of services for non-budget-neutral payment adjustments. CMS cannot exercise its limited authority in a manner so flagrantly inconsistent with the Medicare statute.”
AHA and AAMC are joined in the lawsuit by member hospitals Olympic Medical Center in Port Angeles, Washington, Mercy Health in Muskegon, Michigan, and York Hospital in York, Maine.
AHA and AAMC have long advocated against the site-neutral payment provision, which was initially included in HHS’s proposal for the 2019 OPPS rule.
Following the rule’s finalization, AHA’s executive vice president Tom Nickels said the rule was “misguided” and would negatively impact patients.
“This rule, which phases in over two years payment cuts to hospital outpatient clinic visits, is based on unsupportable analyses and erroneous policy rationales,” Nickels said in a statement. “These ill-advised cuts will hit patients in rural and vulnerable communities especially hard. Congress recognized the crucial role of hospital outpatient departments in the communities they serve and, in 2015, specifically protected existing facilities from unwarranted payment reductions. Today’s final rule could stifle hospitals’ ability to modernize care to meet the needs of their patients and communities.”
AAMC issued a similar statement following the rule’s finalization, previewing its joint legal action with AHA.
“The AAMC is extremely disappointed that CMS exceeded its regulatory authority and ignored feedback from a bipartisan group of nearly 200 members of Congress and stakeholder opposition by finalizing the expansion of flawed site-neutral payment policies,” Kirch wrote. “By finalizing proposals to cut reimbursements to excepted off-campus provider-based departments, CMS disregards congressional intent. Consequently, the AAMC, joined by the American Hospital Association and member hospitals, will promptly bring a court challenge to the new rule’s site-neutral provisions.”