– Eliminating disparities for identical care provided in different settings promotes healthcare savings and patient choice –
WASHINGTON – America’s healthcare system could save billions of dollars if payment rates for identical healthcare services were equalized across care settings, according to a group of consumer advocates, policy experts and physicians who spoke at a Capitol Hill briefing today.
Hosted by the Alliance for Site Neutral Payment Reform – a coalition of healthcare providers, patient and consumer groups and insurers created to advocate for policy reforms that eliminate disparities in payments between the same clinical services provided in different healthcare settings – today’s briefing offered Members of Congress and their staffs data showing that payment disparities drive up healthcare spending and endanger patient choice.
“Today’s healthcare consumers enjoy the option of seeking many different types of care in convenient, less-costly, community-based clinical settings,” said WHO of WHAT. “However, policies that allow dramatically higher reimbursements in certain settings are leading us towards overall higher costs, consolidations and practice closures – none which serve the needs of patients.”
Under current payment policies, Medicare and private insurers pay significantly more for care provided in Hospital Outpatient Departments (HOPDs) despite the delivery of identical services, and without any difference in outcomes. Colonoscopies and MRIs of the knee, for example, are two types of procedures that are reimbursed at significantly higher rates in HOPDs – leading to overall spending growth on the publicly and privately insured because of increases in both prices and volume.
“Sadly, policies that support higher reimbursement for HOPDs encourage hospitals to acquire office-based physician practices, resulting in higher costs, practice closures and reduced access to care in the community,” said WHO. “Lawmakers, policy experts, and payers can all agree that site-neutral parity is a much-needed and logical step towards controlling and reducing unnecessary expenditures.”
President Obama has recommended lowering payment for Medicare services provided in off-campus hospital outpatient departments, which would save an estimated $29.5 billion over 10 years. The Medicare Payment Advisory Commission (MedPAC) estimated that equalizing payments for patient evaluation and management (E&M) visits across settings could generate Medicare savings of $1 billion to $5 billion over five years – and also identified 66 ambulatory payment classifications (APC) for which equalizing the payment rate across settings would “reduce program spending and beneficiary cost sharing by a total of $900 million in one year.”
Lawmakers have taken steps to move toward parity in sites of service in order to achieve savings.
In October, lawmakers included a site-neutral payment provision in the proposed federal budget agreement, which would ensure all new hospital acquisitions of private physician practices would only be eligible for Medicare payments equal to those for the same care services provided in the freestanding, community based setting.
Specifically, the provision (SEC. 603.Treatment of New Off-Campus Outpatient Departments of a Provider), would establish a site-neutral payment policy for all newly acquired provider based off-campus hospital outpatient departments (HOPD). All new hospital acquisition of providers that do not serve patients on the main campus of a hospital would be eligible for reimbursements from either the Ambulatory Surgical Center (ASC PPS) or the Medicare Physician Fee Schedule (PFS), not the higher reimbursed Outpatient Prospective Payment System (OPPS).
“This is certainly a positive first step in making sure that unfair payment disparities are stopped, so that patients – and the healthcare system as a whole – do not suffer the consequences of higher costs and reduced access.”