The ruling marks a stinging rebuke of HHS efforts to steer some services from the hospital outpatient setting to physicians.
A federal judge has ruled that a Centers for Medicare & Medicaid Services (CMS) final rule slashing Medicare payments for certain hospital outpatient clinical evaluation and management (E&M) services to the tune of more than $1 billion over just two years never should have been enacted.
In the matter of American Hospital Association (AHA) v. U.S. Department of Health and Human Services Director Alex M. Azar II, U.S. District Court Judge Rosemary M. Collyer on Tuesday granted the AHA’s motion to vacate the final rule, denied a cross-motion filed by CMS, and remanded the matter for consideration of future remedies.
“CMS believes it is paying millions of taxpayer dollars for patient services in hospital outpatient departments that could be provided at less expense in physician offices,” Collyer wrote in the conclusion of her 28-page decision. “CMS may be correct. But CMS was not authorized to ignore the statutory process for setting payment rates in the Outpatient Prospective Payment System (OPPS) and to lower payments only for certain services performed by certain providers.”
The two parties are now required to submit a joint status report to the Court within two weeks to “determine if additional briefing on remedies is required, along with the CMS estimate as to the duration of further proceedings.”
Specifically, Collyer noted that the CMS rule, which took effect at the start of the calendar year, didn’t qualify as an approved “method” for controlling spikes in hospital usage.
“That context (the applicable governing statutory language) does not make clear what a ‘method’ is, but it does make clear what a ‘method’ is not: it is not a price-setting tool, and the government’s effort to wield it in such a manner is manifestly inconsistent with the statutory scheme,” she wrote. “CMS cannot shoehorn a ‘method’ into the multi-faceted congressional payment scheme when Congress’s clear directions lack any such reference.”
The ruling was interpreted as a striking and clear-cut victory for providers; Modern Healthcare noted that AHA had projected cuts of about $380 million this year and $760 million in 2020 as a direct result of the final rule.
While the ruling did not order CMS to repay hospitals what had been withheld to this point, as the plaintiffs had requested, the scope of the remedy to come is anticipated to be substantial in scope.
Federal officials announced this week that one of the nation’s largest health insurers has agreed to pay $117.7 million to resolve fraud allegations. The False
The Centers for Medicare & Medicaid Services’ (CMS’s) $50 billion Rural Health Transformation Program was designed by the Trump Administration to reshape healthcare delivery in
Please log in to your account to comment on this article.
Sepsis sequencing continues to challenge even experienced coding and CDI professionals, with evolving guidelines, documentation gaps, and payer scrutiny driving denials and data inconsistencies. In this webcast, Payal Sinha, MBA, RHIA, CCDS, CDIP, CCS, CCS-P, CCDS-O, CRC, CRCR, provides clear guideline-based strategies to accurately code sepsis, severe sepsis, and septic shock, assign POA indicators, clarify the relationship between infection and organ dysfunction, and align documentation across teams. Attendees will gain practical tools to strengthen audit defensibility, improve first-pass accuracy, support appeal success, reduce denials, and ensure accurate quality reporting, empowering organizations to achieve consistent, compliant sepsis coding outcomes.
Expert presenters Kathy Pride, RHIT, CPC, CCS-P, CPMA, and Brandi Russell, RHIA, CCS, COC, CPMA, break down complex fracture care coding rules, walk through correct modifier application (-25, -57, 54, 55), and clarify sequencing for initial and subsequent encounters. Attendees will gain the practical knowledge needed to submit clean claims, ensure compliance, and stay one step ahead of payer audits in 2026.
Accurately determining the principal diagnosis is critical for compliant billing, appropriate reimbursement, and valid quality reporting — yet it remains one of the most subjective and error-prone areas in inpatient coding. In this expert-led session, Cheryl Ericson, RN, MS, CCDS, CDIP, demystifies the complexities of principal diagnosis assignment, bridging the gap between coding rules and clinical reality. Learn how to strengthen your organization’s coding accuracy, reduce denials, and ensure your documentation supports true medical necessity.
Denials continue to delay reimbursement, increase administrative burden, and threaten financial stability across healthcare organizations. This essential webcast tackles the root causes—rising payer scrutiny, fragmented workflows, inconsistent documentation, and underused analytics—and offers proven, data-driven strategies to prevent and overturn denials. Attendees will gain practical tools to strengthen documentation and coding accuracy, engage clinicians effectively, and leverage predictive analytics and AI to identify risks before they impact revenue. Through real-world case examples and actionable guidance, this session empowers coding, CDI, and revenue cycle professionals to shift from reactive appeals to proactive denial prevention and revenue protection.
In this timely session, Stacey Shillito, CDIP, CPMA, CCS, CCS-P, CPEDC, COPC, breaks down the complexities of Medical Decision Making (MDM) documentation so providers can confidently capture the true complexity of their care. Attendees will learn practical, efficient strategies to ensure documentation aligns with current E/M guidelines, supports accurate coding, and reduces audit risk, all without adding to charting time.
Join Ronald Hirsch, MD, FACP, CHCQM for The PEPPER Returns – Risk and Opportunity at Your Fingertips, a practical webcast that demystifies the PEPPER and shows you how to turn complex claims data into actionable insights. Dr. Hirsch will explain how to interpret key measures, identify compliance risks, uncover missed revenue opportunities, and understand new updates in the PEPPER, all to help your organization stay ahead of audits and use this powerful data proactively.
Stay ahead of the 2026-2027 audit surge with “Top 10 Audit Targets for 2026-2027 for Hospitals & Physicians: Protect Your Revenue,” a high-impact webcast led by Michael Calahan, PA, MBA. This concise session gives hospitals and physicians clear insight into the most likely federal audit targets, such as E/M services, split/shared and critical care, observation and admissions, device credits, and Two-Midnight Rule changes, and shows how to tighten documentation, coding, and internal processes to reduce denials, recoupments, and penalties. Attendees walk away with practical best practices to protect revenue, strengthen compliance, and better prepare their teams for inevitable audits.
As AI reshapes healthcare compliance, the risk of biased outputs and opaque decision-making grows. This webcast, led by Frank Cohen, delivers a practical Four-Pillar Governance Framework—Transparency, Accountability, Fairness, and Explainability—to help you govern AI-driven claim auditing with confidence. Learn how to identify and mitigate bias, implement robust human oversight, and document defensible AI review processes that regulators and auditors will accept. Discover concrete remedies, from rotation protocols to uncertainty scoring, and actionable steps to evaluate vendors before contracts are signed. In a regulatory landscape that moves faster than ever, gain the tools to stay compliant, defend your processes, and reduce liability while maintaining operational effectiveness.
Happy National Doctor’s Day! Learn how to get a complimentary webcast on ‘Decoding Social Admissions’ as a token of our heartfelt appreciation! Click here to learn more →
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 1 with code CYBER25
CYBER WEEK IS HERE! Don’t miss your chance to get 20% off now until Dec. 2 with code CYBER24
