Here’s a guest blog from Dr. Helen Gelly on the topic of off-campus facility reimbursement, which has implications regarding the prospect of “site neutrality”. For more information on the topic of site neutrality, read this article by Dr. Helen Gelly, “Uncharted Territory: Site Neutrality & Hyperbaric Therapy,” from the January 2017 issue of Today’s Wound Clinic.


Most “wound centers” provide care in hospital-based outpatient departments that are “on-campus,” meaning within 250 yards of the main hospital. In 2019, CMS cut reimbursement to off-campus facilities and a court battle ensued. Last Friday (July 17, 2020), the DC federal appeals court ruled that The Centers for Medicare and Medicaid Services (CMS) has the authority to reduce reimbursement rates for outpatient visits at off-campus hospital facilities in order to control the volume of services provided, reversing a lower court’s ruling that sided with hospitals in their challenge to the so-called site-neutral policy.

Remember that on Oct 4, 2019, President Trump signed an executive order to equalize payment rates among different sites of service, and directed CMS to look at “rewarding care through site neutrality.” Although the Presidential order did not actually implement site neutrality, it tells us where things are likely headed.

Last week’s appeals court ruling could eventually impact the payment rate for on-campus facilities using the same logic that allows CMS to cut rates at off-campus facilities. In other words, although the ruling only affects pay cuts to off-campus outpatient facilities, it might have just started the clock ticking on an eventual “site of service” adjustment for on-campus facilities.

Here’s the Reader’s Digest version:

  • In 2019, CMS imposed deep reimbursement cuts for off-campus hospital facilities, and the hospitals sued, arguing that the 2019 pay cuts went beyond CMS’ authority.
  • In September of 2019, a district court judge ruled that CMS lacked authority to impose the “site-neutral” cuts for clinic visits and vacated the cuts imposed in the 2019 hospital outpatient payment rule.
  • CMS appealed the ruling and implemented a second year of the same cuts in the 2020 hospital outpatient payment rule.
  • The decision by the appeals court last Friday determined that CMS does have the authority to put pay cuts in place because CMS has the authority to control the “unnecessary increase” in the volume of services provided at off-campus facilities.
  • The court also ruled that CMS can reduce a specific pay rate within the hospital outpatient payment system.