A federal appeals court ruled the Department of Health and Human Services has the authority to cut Medicare payments to off-campus clinics to bring them in line with independent physician practices, reversing a lower court’s decision.
The ruling from the U.S. Court of Appeals for the District of Columbia delivered Friday strikes a major blow to the hospital industry which has been fighting HHS over the controversial rule.
The American Hospital Association (AHA) led a lawsuit against HHS arguing it did not have the statutory authority to cut payments to the off-campus, provider-based departments. HHS made the cuts in its annual hospital payments rule and the hospitals argued they were unlawful because the cuts were not budget-neutral, a requirement of the payment rule.
But the appeals court agreed with HHS that it had the authority to make the change in the payment rule because of how the law is structured.