The American Hospital Association, Association of American Medical Colleges and several hospital systems on Monday sued the Trump administration over its site-neutral payment policy for 2020.
The lawsuit is the latest in a string of legal actions hospitals have taken to fight the pay cuts.
A federal judge ruled in September that the Trump administration had exceeded its authority when it implemented its so-called site-neutral payment policy at off-campus hospital clinics in 2019, but the administration included the policy in its final 2020 Hospital Outpatient Prospective Payment System rule anyway.
"The agency's conduct in issuing the 2020 final rule is all the more stark because this court has already rejected CMS' identical attempt to replace Congress' unequivocal directives with the agency's own policy preferences," the complaint said.
The CMS did not immediately respond to an inquiry about the lawsuit.
In December HHS appealed the ruling on the 2019 cuts, but agreed to pay hospitals the money it owes them for doctor's visits last year.
The federal court denied hospitals' request to preemptively stop the payment cuts in 2020. That meant hospitals had to wait until they submitted claims from 2020 to claim standing in the case.
However, U.S. District Judge Rosemary Collyer indicated providers would have a strong case in 2020 because the "CMS clearly disregarded the substance of the court's decision in AHA I when it relied on the same … reasoning to justify its 2020 reimbursement rates," she wrote in her opinion.
Hospitals have estimated they would lose $760 million in 2020 if the policy went into effect. The CMS estimated the 2020 changes would cut copays for people on Medicare and slash federal spending by $800 million in 2020.
Hospitals argue that the pay cuts are outside the CMS' authority because they are not budget-neutral as required by statute.
White House Domestic Policy Council head Joe Grogan said in November he is confident the Trump administration will prevail in court when it defends the site-neutral policy. Even if site-neutral payments are ultimately struck down, Grogan said continuing to push the policies builds a stronger case for congressional action.
