CMS to Reprocess Some Outpatient Claims After Site-Neutral Ruling

CMS has announced that it will reprocess hospital outpatient claims from last year for clinic visit services provided at excepted off-campus provider-based departments.

The agency will start reprocessing the claims in July 2021 in order to pay all hospitals the same rate as non-excepted off-campus provider-based departments for clinic visit services paid under the Physician Fee Schedule, according to the announcement in a Jan. 14 MLN Connects bulletin.

The new rate for the clinic visit services delivered in hospital off-campus provider-based departments is 70 percent of the full rate under Medicare’s Outpatient Prospective Payment System (OPPS).

In 2019, a federal judge declared invalid the rate cut finalized in the 2019 OPPS final rule, which aimed to lower hospital outpatient volume for services that can be safely be delivered in a physician’s office at a lower cost.

CMS reprocessed the 2019 hospital outpatient claims impacted by the so-called site-neutral payment policy in early 2020.

However, in July 2020, the US Court of Appeals for the DC circuit reversed the previous judge’s ruling on the policy and upheld the site-neutral payment reduction.

CMS is now reprocessing the 2019 hospital outpatient claims again to reimburse clinic visit services delivered at off-campus provider-based departments the lower rate. The rate cut applies to off-campus provider-based departments excepted from previous site-neutral payment policies under the Bipartisan Budget Act of 2015.

Providers do not need to take action, CMS stated in the bulletin.

The reprocessing effort will impact hospital outpatient claims submitted during the first year of the site-neutral payment policy phase-in, which ran from Jan. 1 through Dec. 31, 2019.

Off-campus provider-based departments faced an even steeper rate cut in 2020 when CMS slashed payments for clinic visit services to 40 percent of the full OPPS rate.

A judge affirmed the continuation of the site-neutral payment policy in 2020 while also striking down a lawsuit seeking to prevent CMS from implementing the policy.

CMS continued the policy despite the 2019 court ruling because it was pending an appeal. The agency expected the site-neutral payment policy to save Medicare $800 million last year.

The agency did not address site-neutral payment rates for clinic visit services in the final rules for the OPPS and Physician Fee Schedule in 2021, indicating that it is likely to continue paying off-campus provider-based departments at 40 percent of the full OPPS rate for clinic visit services, even if they are part of the exception established by the Bipartisan Budget Act of 2015.

Hospital groups, including the American Hospital Association (AHA), have opposed the site-neutral payment policy for clinic visit services, arguing that it exceeds HHS’ authority and fails to account for the differences between hospital outpatient departments and other sites of care.

AHA led the lawsuits challenging the policy in court. Most recently though, an appeals court denied the group’s request for a judge to reconsider the ruling upholding the site-neutral payment policy.

Now, the AHA says it is asking the US Supreme Court to review the appeals court decision in a final effort to convince a judge to throw out the site-neutral payment policy.