On July 17, the U.S. Court of Appeals for the District of Columbia reversed a lower court's decision and held that the Department of Health and Human Services (HHS) has the authority to cut Medicare payments to hospital off-campus facilities to bring them in line with independent physician practices and other outpatient payments.

According to the appeals court, HHS had properly exercised its authority in allowing the Centers for Medicare and Medicaid (CMS) to implement a service-specific, nonbudget-neutral reimbursement cut under the outpatient prospective payment system (OPPS), despite there being a statutory requirement that any changes to the OPPS be "budget neutral," meaning that an increase or decrease in projected spending must be offset by other changes.