Supreme Court won’t review HHS’ site-neutral pay rule

The U.S. Supreme Court on Monday declined to hear an appeal challenging HHS’ site-neutral pay policy, allowing the regulation to move forward.

A trial court initially struck down the controversial policy in 2019, but the U.S. Court of Appeals for the District of Columbia Circuit reversed that decision in 2020. The appellate panel said the cuts to off-site outpatient departments were legal because the changes were volume-control measures that don’t have to be budget-neutral.

The American Hospital Association and Association of American Medical Colleges claimed the D.C. Circuit gave HHS too much authority to interpret the law. The groups estimated the 2019 rule would cost providers about $380 million in 2019 and $760 million from a separate 2020 site-neutral rule.

The Supreme Court did not elaborate on why it didn’t take up the appeal.

The D.C. Circuit presented 2017 data showing the evaluation and management reimbursement rate for new patients was $184 in outpatient clinics, compared with $109 at a freestanding physician’s office, and cited Medicare Payment Advisory Commission reports that found hospitals reacted to the payment differential by buying up freestanding physician practices.


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