York Hospital is part of a lawsuit against the Trump administration over a new rule that could cut some Medicare rates for outpatient hospital sites to match the rates in physicians' offices. Credit: Ioanna Raptis | The York Weekly

York Hospital and four other health care organizations filed a lawsuit on Tuesday against President Donald Trump’s administration, alleging that new rules by a U.S. Health and Human Services agency could dramatically reduce some of their Medicare payments.

The lawsuit challenges a final rule issued in November by the Centers for Medicare & Medicaid Services that imposes a site-neutral payment policy, meaning outpatient hospital sites and physicians’ offices will get the same payments for certain Medicare visits.

In the lawsuit, York Hospital and the other plaintiffs claim the site-neutral policy makes serious reductions to Medicare payment rates for certain clinic visit services provided at some outpatient hospital sites.

The new rule goes into effect Jan. 1, 2019.

The lawsuit, filed in the U.S. District Court for the District of Columbia, includes the American Hospital Association, Association of American Medical Colleges, Mercy Health Muskegon in Michigan and Olympic Medical Center in Port Angeles, Washington.

The lawsuit is against Health and Human Services Secretary Alex M. Azar II. The CMS is an agency within HHS.

“The Plaintiff-Hospitals and Plaintiffs AHA’s and AAMC’s member hospitals rely heavily on the structure of Medicare payments established by Congress to provide critical outpatient services for the vulnerable populations in their communities, many of whom have been historically underserved,” the lawsuit states. “As CMS itself notes, the challenged policy will result in a total reduction in payments for outpatient services of approximately $380 million in CY 2019.”

The plaintiffs are asking the court to find the CMS’ ruling unenforceable because they claim it exceeds the agency’s statutory authority. They also are asking for attorney’s fees and other costs the court deems reasonable.

A York Hospital spokesperson and the attorney for the plaintiffs referred all questions about the lawsuit to the American Hospital Association.

In a study released in September, the American Hospital Association found that Medicare patients who receive care in a hospital outpatient department are more likely to be poorer and have more severe chronic conditions than those treated in an independent physician office. The report found that site-neutral payment policy could threaten access to care for the most vulnerable patients and communities.

“As this study clearly shows, the needs of the patients hospital outpatient departments care for each day are different from those who choose to be seen at an independent physician office,” AHA President and CEO Rick Pollack said in a statement. “Proposals that treat them the same ignore the very different clinical and regulatory demands hospitals face, and could threaten access to care.”