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New District Court Ruling in Site Neutral Lawsuit

December 19, 2019

New District Court Ruling in Site Neutral Lawsuit

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Ivy Baer, Senior Director and Regulatory Counsel

The U.S. District Court for the District of Columbia Dec. 16 issued an opinion that failed to extend to 2020 an earlier decision which applied to 2019 cuts to site neutral payments that had been proposed by the Centers for Medicare and Medicaid Services (CMS). The earlier decision had determined that CMS did not have the authority to cut payment rates to certain off-site outpatient departments due to certain administrative requirements that must first be met [see Washington Highlights, Sept. 20]. 

On Nov. 1, CMS made the same cuts to the 2020 payment rates that it had made in 2019 to grandfathered off-site outpatient departments when it finalized the 2020 Outpatient Prospective Payment System rule [see Washington Highlights, Nov. 8]. In the Dec. 16 ruling, the judge determined that the plaintiffs must make a claim for payment before the Court can rule on whether to extend the 2019 ruling to the 2020 payment rates.

The decision was in response to a motion filed by the AAMC and the American Hospital Association asking the Court to strike down the 2020 payment cuts prior to their effective date of Jan. 1, 2020 [see Washington Highlights, Dec. 7, 2018].

In issuing the ruling, the Court noted that  “CMS clearly disregarded the substance of the Court’s decision in American Hospital Association, et al, v. Azar I when it relied on the same ultra vires reasoning to justify its 2020 reimbursement rates” and that the Agency’s argument against the Court extending the order to 2020 “appears to set the agency above the law.” Once the plaintiff hospitals have submitted claims for payment for services in 2020, it is anticipated a new motion will again ask the Court to issue a ruling.

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