AHA files lawsuit against HHS for 2020 payment cuts to off-campus PBDs

Wednesday, January 22, 2020

The American Hospital Association (AHA) and the Association of American Medical Colleges (AAMC) recently filed a lawsuit against the Department of Health and Human Services (HHS) for continuing to reduce payments for hospital outpatient services provided in grandfathered, off-campus provider-based departments (PBD) in the fiscal year 2020 Outpatient Prospective Payment System final rule.

In their complaint to HHS, the AHA and AAMC argue that:

  1. The U.S. District Court for the District of Columbia already declared the payment reductions unlawful. In September 2019, U.S District Judge Rosemary Collyer ruled that CMS overstepped its statutory authority when it implemented the reductions. 
  2. CMS does not have the legal authority to reduce total payments for covered hospital outpatient services for 2020 by hundreds of millions of dollars; the agency is unlawfully targeting a select group for non-budget-neutral payment adjustments. Medicare statute states that any changes to payment that target only specific items or services must be budget neutral.
  3. The 2020 OPPS final rule also goes against the Medicare Act by subjecting excepted and non-excepted off-campus PBDs to the same payment system and rate.
  4. Hospital outpatient PBDs provide care to the most vulnerable communities and the payment cuts could threaten their access to care.

The AHA and AAMC ask the court to bar CMS from enforcing payment cuts for outpatient services provided in off-campus PBDs. They also ask that CMS provide immediate relief to affected hospitals for withholding payments without the legal authority to do so.

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