Supreme Court Denies Hospitals’ Request for Review of Medicare Hospital Clinic Payment Cuts

July 1, 2021

On June 28, the U.S. Supreme Court declined to hear an appeal from the American Hospital Association (AHA) and hospitals challenging the U.S Department of health and Human Services’ (HHS’) site-neutral payment policy, allowing Medicare payment cuts to off-campus hospital-based clinics to continue. WSHA participated in an amicus brief in support of AHA’s position. While we are disappointed in this outcome, we appreciate the work of WSHA member Olympic Medical Center as a named plaintiff in the case and AHA’s strong advocacy.  More information on these cases can be found on AHA’s website:

In its final Outpatient Prospective Payment System rule of 2019, CMS reduced the payment rate for evaluation and management services provided at off-campus, provider-based departments by 30 percent. A federal judge initially sided with the AHA and other hospitals in 2019, ruling that CMS overstepped its authority when it expanded the site-neutral pay policy and required reprocessing of 2019 claims to reverse the cut. The U.S. Court of Appeals for the District of Columbia Circuit reversed that decision in July 2020 and affirmed the 60 percent cut effective January 2020. With the latest court decision, it is now possible that the reprocessed payments for 2019 services may be subject to recoupment. WSHA will continue to monitor this issue and provide updates when there is additional information.

WSHA also participated in an amicus brief in support of AHA’s request that the court review HHS’s cuts to Medicare payment for drugs provided by 340B hospitals. We are still waiting for Supreme Court action in the 340B case. We hope to have an update regarding this case in the coming weeks. (Andrew Busz,


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