CMS Finalizes Outpatient Hospital Rule Implementing Site Neutral Clinic Cuts

November 7, 2018

Last week, CMS finalized its outpatient hospital payment rule to apply site-neutral cuts to office visit services at grandfathered off-campus hospital-based clinic locations. In our comment letter to the proposed rule, WSHA strongly urged the Centers for Medicare and Medicaid Services’ to withdraw its proposed sixty percent payment cut. Unlike the proposed rule, the final rule phases in the cut over two years, with a thirty percent reduction beginning January 2019 and the remainder effective January 2020. The change will cut Medicare payments by $15 million to Washington hospitals for 2019, $30 million or more for 2020 and each succeeding year, an estimated $424 million over a ten-year period. In its initial response to the rule, the American Hospital Association has indicated it intends to mount a legal challenge to the cuts. WSHA will be sending hospital CFOs and designated finance leaders a detailed summary of the rule and hospital-specific impact analyses. (Andrew Busz,


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