AHA asks appeals court to reconsider decision in off-campus PBD payment cut case

The American Hospital Association (AHA) asked the U.S. Court of Appeals for the District of Columbia to rehear a July 17 decision in favor of CMS’ site-neutral payment policy, the AHA announced September 1. The July decision was reached by a three-judge panel and in its petition the AHA is requesting that the entire court rule on the case.

In July, a three-judge panel determined that CMS has the authority the implement a controversial policy finalized in the 2019 Outpatient Prospective Payment System (OPPS) final rule. Under Section 603 of the Bipartisan Budget Act of 2015, CMS was required to implement a site-neutral payment policy that reduced reimbursement to most off-campus provider-based departments (PBD). Reimbursement reductions to most off-campus PBDs were rolled out in the 2018 Outpatient Prospective Payment System (OPPS) final rule. Certain off-campus PBDs were grandfathered in under Section 603 and exempt from the reimbursement reductions. In the 2019 OPPS, CMS finalized a policy that applied a 50% total reduction in payment to grandfathered off-campus PBDs as if these sites were paid the Medicare Physician Fee Schedule (MPFS) rate for services described by HCPCS code G0463 (hospital outpatient clinic visit for assessment and management of a patient). This effectively paid providers 70% of the OPPS rate for 2019. For 2020 and subsequent years, CMS will reimburse the grandfathered off-campus PBDs at the MPFS rate, which would equal 40% of the Outpatient Prospective Payment System (OPPS) rate. Notably, the reductions were not budget-neutral, meaning the savings were not redistributed within the OPPS.

In its petition for a rehearing, the AHA argues that although the panel relied on legal theory in Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc. (1984), the panel failed to address questions raised by Chevron. The AHA also contends that Chevron does not apply to this case.