The American Hospital Association (AHA), the Association of American Medical Colleges, and a group of affected hospitals are suing the federal government over a new rule that changes how certain off-campus hospital departments are reimbursed for the care they provide patients.
CMS’s final outpatient prospective payment system rule (OPPS) issued last month includes a plan to reduce Medicare payments for certain services provided at off-campus hospital provider-based departments (PBDs). These PBDs are defined as practice locations that are not located in the immediate proximity of the main hospital but are nonetheless closely integrated with and controlled by the hospital. Examples are stand-alone oncology clinics, urgent care clinics, or medical offices offering specialized care. Oftentimes these services are located off campus to bring services to a convenient location for patients in a given community.
The new federal rule would essentially treat the off campus provider-based departments similar to a physician office – and pay them the same, lower rate.
In its lawsuit, the AHA says that the off-campus PDBs often have higher costs, writing: “There are many reasons for this: The patient population that visits off-campus PBDs tends to be sicker and poorer than the patient population that visits independent physician offices … In addition, off-campus PBDs are often intended to serve more functions than standalone physician offices. For example, an off-campus PBD may be an emergency department operating on nights and weekends with a team of specialist doctors and nurses on staff. In addition, CMS requires off-campus PBDs to satisfy the Medicare Conditions of Participation applicable to their main hospital, which are more demanding than the requirements imposed on physician offices or clinics.”
The lawsuit says CMS exceeded its authority and overrode Congressional intent by issuing the final OPPS rule relating to off-campus payments, and asks the U.S. District Court for the District of Columbia to stop the rule from being enforced.