A car drives in front of the main entrance of Olympic Medical Center on Monday. (Jesse Major/Peninsula Daily News)

A car drives in front of the main entrance of Olympic Medical Center on Monday. (Jesse Major/Peninsula Daily News)

Federal government agrees to pay back OMC for 2019 Medicare claims

Cuts may still double in 2020

PORT ANGELES — The Trump Administration has agreed to pay Olympic Medical Center’s Medicare claims from 2019 in full after a federal judge ruled 30 percent cuts to Medicare reimbursement rates for off-campus clinics are unlawful.

However, the federal government announced in November plans to implement 60 percent cuts for 2020.

Upon learning that the Centers for Medicaid Services would repay the 2019 cuts, Olympic Medical Center confirmed that Medicare claims paid by CMS as recently as Nov. 20 were done so without the 30 percent cut.

“Seeing these claims come through from CMS as fully paid is exciting,” said OMC CEO Eric Lewis in a prepared statement.

“However, it remains unclear to us if CMS intends to implement the additional 30 percent of cuts as intended in its CY 2020 rule. It also remains uncertain if CMS intends to file a notice of appeal to this rule.

“We appreciate all the community support to help reverse this policy and we look forward to long term planning to expand our Sequim campus,” Lewis said.

OMC has been informed that starting Jan. 1, Medicare administrative contractors will reprocess claims for 2019 in order to repay OMC.

OMC had cut $1.7 million from its 2019 budget in anticipation of those cuts and the 60 percent cuts were factored into the 2020 budget.

The government estimates the 60 percent cut will save taxpayers $800 million next year.

The policy, which threatens to cost OMC more than $47 million in lost revenue over the next decade, led to the hospital’s halting expansion of primary care in Sequim.

In November the Centers for Medicare and Medicaid Services implemented the second phase of a site-neutral rule that cuts Medicare reimbursements at clinics more than 250 yards away from a hospital’s main campus by 60 percent.

This comes after the federal government lost lawsuits filed by the American Hospital Association and Association of American Medical Colleges. A similar lawsuit was also filed by dozens of hospitals across the country.

A federal judge ruled in September that CMS “exceeded its statutory authority when it cut the payment rate for clinic series at off-campus provider-based clinics.”

On Nov. 11 the American Hospital Association asked the court to enforce its September ruling and requested a hearing.

In response, the government said that it “may appeal” the court’s decision. The government acknowledge that if the hospitals sued over the 60 percent cuts “the Court may find it to be [unlawful] for the same reasons.”

Still, the government suggest that the hospitals cannot ask a judge to enforce its judgment that the 2019 rule was unlawful because the 2020 rule is “a different rule … that has not yet gone into effect.”

Part of the government’s argument is that the judge only ruled on part of the 2019 rule and did not pass judgment on the 2020 rule.


Reporter Jesse Major can be reached at 360-452-2345, ext. 56250, or at jmajor@peninsuladailynews.com.

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