On December 12, 2019, the Centers for Medicare and Medicaid Services (CMS) announced that it will automatically reprocess claims which had been reimbursed at a reduced rate in 2019 under the site-neutral payment policy and pay hospitals monies that were withheld due to the policy.
In November 2018, CMS promulgated a Final Outpatient Prospective Payment System (OPPS) Rule and implemented its site-neutral payment policy, which cut Medicare reimbursement rates for outpatient hospital services provided at certain off-campus provider-based departments (PBDs) to the lower Physician Fee Schedule (PFS) rate for the clinic visit services – a 60 percent reduction from the OPPS reimbursement rate for the same service. CMS planned to phase in application of this payment reduction over two years. The American Hospital Association, Association of American Medical Colleges and nearly 40 hospitals challenged the policy, arguing that the Medicare Act did not allow CMS to cut the rates. CMS believed that it could develop a method to set payment rates for a particular service which is causing “an unnecessary increase in cost and volume without regard to budget neutrality.”