Successful Lawsuit Reverses Medicare Payment Cuts to Grandfathered Off-campus Clinics

A recent lawsuit by the American Hospital Association and several hospitals against the Department of Health and Human Services successfully challenged outpatient clinic payment cuts implemented by the Centers for Medicare & Medicaid Services (CMS). The agency recently announced that Medicare fee-for-service (FFS) claims for outpatient clinic visits provided at off-campus hospital outpatient departments (HOPDs) on and after Jan. 1, 2019, will be reprocessed and paid at the full outpatient prospective payment system (OPPS) rate for facilities that were grandfathered under the Bipartisan Budget Act of 2015. The 2019 Medicare OPPS final rule reduced payment for all outpatient clinic visits provided at off-campus HOPDs to 70% of the OPPS rate, regardless of whether the facility was grandfathered. In October, the judge reaffirmed her previous order to the CMS to vacate the payment cut.

The CMS updated the OPPS claims processing system Nov. 4 to correct the rates being applied to claims with a date of service of Jan. 1, 2019, or after. Claims processed on or after Nov. 4 should have been paid at the higher OPPS rate rather than the reduced rate. Beginning Jan. 1 and over the next few months, the Medicare Administrative Contractors will reprocess claims that were previously paid at the lower rate, with no action required by hospitals. Members with questions should contact Vickie Kunz at the MHA.