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Shifting Care from Office to Outpatient Settings: Services are Increasingly Performed in Outpatient Settings with Higher Prices – Health Care Cost Initiative, April 2, 2019
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Payment policies supporting higher reimbursement in the hospital outpatient department (HOPD) setting have led to a significant shift in the delivery of certain services from the community to the HOPD, resulting in increased costs to patients, employers and taxpayers.
Equalizing payments across healthcare settings will benefit patients by reducing out of pocket costs, preserving patient choice and ensuring access to community-based care.
Across the Medicare program, reimbursement rates vary significantly based on site of service and not the healthcare service provided. The Administration, the Medicare Payment Advisory Commission (MedPAC) and bipartisan lawmakers have all recommended site neutral payment reforms to reduce Medicare spending.
Private insurance claims data also show increased spending on HOPD services is playing a major role in overall spending growth on the publicly and privately insured because of increases in both prices and volume.
- 4Market Consolidation
The Alliance warns that higher reimbursement encourages hospitals to buy up physician practices in order to increase their profits. Unfair payment policies have put independent physician practices nationwide in a position in which selling to hospitals is their only option.
WHAT THEY ARE SAYING
Site-neutral payments that base the payment rate on the less costly sector can save money for Medicare, reduce cost sharing for beneficiaries, and reduce the incentive to provide services in the higher paid sector, without compromising beneficiary access to care or health outcomes.
AARP has long advocated for responsible solutions for slowing Medicare spending growth and improving the long-term fiscal health of the program, including delivery system reforms and program integrity efforts. AARP supports equalizing Medicare payments for physician services between hospital outpatient and office settings.
Medicare should adopt site-neutral payment proposals for physician and other ambulatory services performed at the facility level—thereby reducing costs and improving payment efficiency and equity for Medicare-covered services.
A site-neutral payment system would focus on the patient and their needs, regardless of setting, and encourage all settings to provide efficient, high-quality care.
Large price gaps offer an opportunity for purchasers and health plans to reduce spending by steering patients to lower-price, community-based providers through changes in network and benefit design.