Supreme Court Declines to Review Site-Neutral Payment Policy

News | Published: Wednesday, July 7, 2021 4:00 pm


The Supreme Court has declined to hear an appeal from the American Hospital Association (AHA) and other hospital groups challenging the U.S. Department of Health and Human Services' site-neutral payment policy for hospital outpatient visits. The decision allows the continuation of Medicare payment cuts to off-campus hospital-based clinics.

The policy, issued in 2018, requires hospital outpatient off-campus departments to receive the same reimbursements as independent physician offices for hospital outpatient visit services given to Medicare patients. AHA and other groups filed the lawsuit arguing the rule will harm access to care for hospital outpatients. The court is still reviewing a separate case that challenges a policy where Medicare cut reimbursements by almost 30% to hospitals that receive drug manufacturer discounts through a federal program, 340B.

The push for site neutrality has been a long-standing issue as patients and payers look for health care savings. Some have argued the regulations could threaten access to ambulatory outpatient care, particularly in rural and vulnerable communities. Reductions in outpatient department revenue may lead to increases in other hospital-based services. However, from the patient and physician practice perspective, patients could receive less expensive, same quality services in diverse settings.

To further its commitment and address responsibility for increasing access and value, the ACC, under the guidance of the Health Affairs Committee, has put forth principles pertaining to site neutral payments within Medicare:

  • Changes to Medicare payment should prioritize patient access, quality and value of care.
  • Approaches to remove unnecessary and/or unexpected cost to patients and the healthcare system, including equity across outpatient ambulatory settings, should be discussed.
  • Significant changes to address payment disparities between sites of service must be phased in over time to safeguard the stability of the healthcare system.
  • Proposals must consider the financial impact of changes on the stability of the healthcare system, particularly those providing care to underserved populations.
  • Site of service payment policies must be aligned with programmatic and systemic changes to avoid unnecessary complexity and promote the successful transition to a value-based payment system.
  • Any payment differences across sites should be related to documented differences in the resources needed to ensure patient access and high-quality care.
  • Medicare payments for all sites of care should account for costs related to emergency capacity, compliance with regulatory requirements, geographic differences, quality improvement activities, higher need populations, or other factors relevant to a site of service.

For more information, check out a Cardiology article on site neutrality and the CV service line.

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