CMS to Start Reprocessing Site-Neutral Outpatient Claims

CMS will begin to reprocess claims for outpatient clinic visit services provided at excepted off-campus provider-based departments, following a reinstated site-neutral payment policy. The agency will start the process by November 1, 2021.

Certain claims with dates of services between January 1 and December 31, 2019, will be altered so that the services are paid at the same rate as services received at non-excepted off-campus provider-based departments under the Physician Fee Schedule.

CMS will process the necessary claims with no action needed on the provider side, according to the announcement, which appeared in a Medicare Learning Network newsletter.

In 2019, CMS implemented the Outpatient Prospective Patient System (OPPS) rule which extended a site-neutral payment policy to off-campus provider-based departments.

The agency reduced off-campus provider-based department payments to 70 percent of the full OPPS rate. Services received in hospital outpatient settings are often more expensive than the cost for the same service provided in a physician’s office, CMS reasoned.

However, a federal judge ruled the 2019 OPPS rule to be invalid, stating that the HHS did not have the authority to make that decision. In 2020, CMS reprocessed the claims that received the reduced payment rate to meet the 100 percent payment rate. The total would have amounted to around $380 million if CMS had continued the discounted rate through the end of 2019.

The US District Court of Appeals for the DC Circuit reversed the court’s ruling in July 2020 and ruled in favor of hospital site-neutral payments, affirming that the HHS had proper authority to implement the site-neutral payment policy.

CMS’ recent announcement to reprocess claims is in response to the US Court of Appeal’s overturning of the lower court’s initial ruling. The agency will re-introduce site-neutral payments and reimburse payers and patients who paid higher rates for services at excepted off-campus provider-based departments.

The American Hospital Association (AHA) and the Association of American Medical Colleges (AAMC) are known opponents of site-neutral hospital payments and were two of the plaintiffs in the original lawsuit against CMS and HHS.

AHA was disappointed with the July 2020 appeal’s court ruling.

“It fails to account for the fundamental differences between hospital outpatient departments and other sites of care”, Melinda Hatton, AHA’s general counsel, said in a statement. “Hospitals are open 24/7, held to higher regulatory standards and are often the only point of access for patients with the most severe chronic conditions, all of whom receive treatment regardless of ability to pay.”

AHA also published a study suggesting that site-neutral payments could limit access to care for at-risk patients. Medicare beneficiaries that receive services at off-campus provider-based departments are more likely to have lower incomes and more chronic conditions compared to Medicare beneficiaries who receive care in physician settings, according to AHA.