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The Department of Health and Human Services “effectively admits” that its goal in reducing payments for hospital outpatient clinic visit services furnished in off-campus provider-based departments grandfathered under Section 603 of the Bipartisan Budget Act of 2015 was to address a policy concern that Congress has already addressed through a different legislative solution, the AHA and other hospital plaintiffs told a federal district court today. Replying to the government’s defense of the policy, the plaintiffs asked the court to declare the agency’s action ultra vires (in excess of its legal authority) and to “right the agency’s clear wrong.”

The brief adds, “There is nothing in the Medicare statute that precludes this Court from holding the agency to account when it has clearly exceeded the bounds Congress imposed on its delegated authority. Indeed, this Court has recently affirmed as much in two closely analogous cases that the Government simply fails to acknowledge. Review of Plaintiffs’ ultra vires claim is available and appropriate now.”

The AHA, joined by the Association of American Medical Colleges and several member hospitals, in December filed a lawsuit against HHS for finalizing a policy to phase-in, over two years, a reduction in payments for hospital outpatient clinic visit services furnished in off-campus PBDs that are grandfathered (excepted) under Section 603 of the Bipartisan Budget Act of 2015. The cut was included in the Centers for Medicare & Medicaid Services’ outpatient prospective payment system final rule for calendar year 2019.

Medicare patients who receive care in a hospital outpatient department clinic are more likely to be poor, previously hospitalized and have severe chronic conditions than those treated in an ambulatory surgical center, according to a study by KNG Health Consulting released yesterday by the AHA.