Hospitals had about a week of rejoicing over a CMS decision to repay hospitals the Medicare funds it withheld relating to certain services provided at grandfathered off-campus hospital provider-based departments. A U.S. District Court judge had ruled in September that the cuts, contained in the 2019 outpatient prospective payment system (OPPS) rule, overrode Congressional intent and had to be refunded. However, the 2020 OPPS rule continues to phase in the same off-campus provider-based department cuts that the court vacated.
The American Hospital Association and others brought suit against CMS, asking the court to reject the 2020 rule cuts for the same reasons it rejected the 2019 cuts. But on December 16, the court ruled that while the 2019 challenge was within its jurisdiction, the 2020 challenge isn’t because hospitals haven’t exhausted their “administrative remedies” with CMS. That is, they haven’t filed 2020 claims and had them rejected by CMS as they had in 2019.
The judge noted, “To be clear, CMS clearly disregarded the substance of the court’s decision” in the 2019 case when setting the 2020 reimbursement rates. And she noted that CMS had complained about the administrative costs associated with reimbursements relating to the 2019 rule, but that the agency “has now intentionally placed itself in a position to suffer those same alleged harms, which calls its argument into serious question and appears to set the agency above the law.”
The AHA responded to the ruling, saying that hospitals would indeed take the necessary step of first filing 2020 claims before returning to court, adding, “The AHA and other plaintiffs remain confident that the courts will find the 2020 cuts to be illegal, just as they found the 2019 cuts."