Judge denies CMS bid to preserve site-neutral payment cuts while awaiting appeal

Court judgement money
A federal judge denied the Centers for Medicare & Medicaid Services' request to stave off having to repay hospitals affected by site-neutral payment cuts. (Getty/LIgorko)

A federal judge denied the Trump administration's bid to delay repaying hospitals affected by $380 million in site-neutral payment cuts 

U.S. District Court Judge Rosemary Collyer said in an opinion delivered Monday that the Centers for Medicare & Medicaid Services (CMS) hasn’t given sufficient reason for a 60-day stay of her September ruling against the agency’s regulation on site-neutral payments. 

Collyer’s original ruling vacated the $380 million in cuts to off-campus providers that went into effect Jan. 1, 2019, as part of the Outpatient Prospective Payment System (OPPS). She called for CMS to determine how to repay hospitals to make up for the cuts and wanted a status report Oct. 1.

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However, CMS said in a court filing earlier this month that the ruling wasn’t justified because “there remains considerable doubt over the correct legal outcome.” If CMS is required to pay off-campus clinics “at a higher payment rate now and then ultimately prevails on any appeal” then the agency has no practical way to recoup the overpayments, the filing said.

RELATED: Physician groups call court ruling on site-neutral payments 'bad news'

CMS also argued that Collyer struck down the methodology for making the correct payment to providers when she struck the affected portion of the OPPS.

CMS said if Collyer disagreed with the argument then at least the agency would need the rule to continue to be in effect for 60 days while it decides whether to appeal.

But Collyer disagreed with CMS on both counts. She disagreed with CMS that there was no methodology to pay off-campus providers and wrote in her opinion that CMS developed the underlying OPPS rates for such providers then just tacked the rate reduction at the end.

Getting rid of the site-neutral cuts merely have made such off-campus providers subject to the original final rule, she added.

Collyer also didn’t buy CMS’ request for a stay of her ruling pending the outcome of an appeal.

RELATED: AHA: CMS site-neutral payment plan could lead to access problems as hospitals cut services

She said that a stay is granted usually when an applicant can show they have a strong chance of winning an appeal, will be irreparably harmed, have the public interest or the ruling will impact other parties.

“At most, CMS has only hinted at irreparable harm,” Collyer said. “It has completely ignored the other factors. Without more, CMS has not satisfied its burden.”

Hospital groups who sued CMS over the rule cheered Collyer’s decision.

RELATED: Hospital groups decry 'draconian' cuts proposed by CMS in OPPS rule

“The [American Hospital Association] expects CMS to comply with today’s order and promptly repay the impacted hospitals to support the work they do for the patients they serve,” said Melinda Hatton, general counsel for the American Heart Association, in a statement.

However, CMS has continued to call for the site-neutral payment cuts in the proposed 2020 OPPS, which must be finalized by Nov. 1.

CMS said it does not comment on pending litigation.

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