AzHHA joined an Amici Brief on February 23 along with 32 other state and regional hospital associations that has been filed with the U.S. Supreme Court. In the brief, amici request the Supreme Court hear a case regarding the constitutionality of a CMS rule significantly reducing reimbursement rates for off-site healthcare facilities.

The federal government has designated nearly 80% of rural America as “medically underserved.” In these so-called “medical deserts,” hospitals must support large geographic areas with a limited number of physicians. Off-campus provider-based departments are a critical tool in helping hospitals address medical deserts and other problems with access to care in rural areas. It is through provider-based departments that hospitals reach vulnerable populations who would otherwise have to travel hours to main hospital campuses.

Historically, CMS reimbursed provider-based departments the same amount for outpatient care as it would for services provided at the main hospital. Section 603 of the Bipartisan Budget Reform Act of 2015 changed reimbursement of provider-based departments by creating two categories: (1) those established before November 2015 (grandfathered provider-based departments) and (2) those established after November 2015. Section 603 required CMS to continue paying grandfathered provider-based departments at the same rate as hospitals and to reimburse post-November 2015 provider-based departments at the same rate as independent physician’s offices.

Even though Congress made its intent clear that grandfathered provider-based departments should be reimbursed at the same rate as hospitals, in 2018, CMS issued a final rule slashing reimbursement rates for grandfathered provider-based departments, resulting in approximately $600 million in cuts annually. The Amici brief explains CMS’s massive cuts to provider-based departments Medicare reimbursement rates threaten the vital role provider-based departments play in communities across the country. The brief also asserts CMS lacked statutory authority to reduce those reimbursement rates because Congress intentionally chose to grandfather certain provider-based departments from any cuts when it enacted Section 603.

The Supreme Court’s decision to take the case requires the affirmative vote of four Justices and likely will not be decided until late spring 2021.