Site-Neutral Payments Supported by Federal Court

Donna White

Donna White

By Donna White, Principal Consultant and Owner of Legacy Consulting Services and Legacy Billing Solutions in Montgomery, Alabama.

In a ruling last week, a Federal appeals Court ruled that the Department of Health & Human Services (HHS) is authorized to implement site-neutral payments. This is a long-awaited and huge win for independent physician practices.

Historically, off-campus clinics attached to a hospital were reimbursed at a higher rate than independent physician practices. This left many providers with tough decisions to make regarding becoming a part of a hospital physician network or finding other ways to supplement their income.

While supplementing their income has not changed, what has changed are what the off-campus clinics are reimbursed for the same services received at an independent physician’s office. HHS can now implement reimbursement at off-campus hospital clinics in-line with independent physician practices.

The American Hospital Association (AHA) led the original lawsuit when HHS proposed a two-year step-down decrease in payments. The lower courts agreed with the AHA. However, the Federal courts ruled that since HHS has the power to control unnecessary increases in the volume of covered outpatient services, the site-neutral payments decision is within governmental rule and not an overreach of their power.

AHA is turning to Congress to step in and outlaw the cuts. They feel this could reduce access for those already at-risk communities, particularly during the COVID pandemic.

However, overall, the hope is to drive more patient volume to the physician of their choice, not necessarily one deemed necessary based on their hospital visit. Also, to encourage independent providers to practice where they choose, which in turn, could correct the issues with at-risk communities not receiving the treatment they need.

The next step would be to find some sort of middle ground between the reimbursements received at off-campus practices vs. independent physician practices to close the gap between the two and ensure providers are reimbursed accordingly.

What are your thoughts on this ruling?

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