By Shelby Livingston | November 29, 2016
A coalition of physician advocacy groups and insurers that include the Blue Cross and Blue Shield Association and insurance industry lobbying group America’s Health Insurance Plans, is urging Congress to reject a provision in the 21st Century Cures Act that allows some hospital-owned outpatient facilities to dodge recently finalized site-neutral payment rules.
In a letter (PDF) Monday , the coalition—the Alliance for Site Neutral Payment Reform—called on House Energy and Commerce Committee leaders to fight provisions that would exempt cancer hospitals and other outpatient departments under development before Nov. 2, 2015, from the payment policies that were passed as part of the Bipartisan Budget Act of 2015 and finalized by the CMS earlier this month.
The alliance said the 21st Century Cures provisions would continue to drive up costs for Medicare and patients and would encourage hospitals to swallow up independent physician practices, thereby reducing patient choice.
“Preserving an outdated reimbursement policy that continues to drive up healthcare spending in the outpatient space is counter to Congress’s goal of modernizing the Medicare system and providing patients with healthcare choices at less cost,” the letter reads.
Insurers are interested in limiting the exceptions to the site-neutral payment rates because those exempted outpatient facilities will ultimately be paid more and insurers want to keep Medicare reimbursement low. Moreover, prices tend to float up when providers consolidate, so insurers end up paying more.
The House is slated to vote Wednesday on the reworked 21st Century Cures package of biomedical innovation bills that was introduced over the weekend by House Energy and Commerce Committee Chairman Fred Upton (R-Mich) and Senate Health, Education, Labor and Pensions Committee Chairman Lamar Alexander (R-Tenn.).
Under the final rule on site-neutral payments released Nov. 1, hospital off-campus facilities will no longer be paid the same rates as hospital-based outpatient departments if they started
billing Medicare after Nov. 2, 2015. Instead, Medicare will pay equal rates for the same services performed at off-site facilities and physician practices, effective Jan. 1.
Currently, Medicare pays a higher rate for services provided in a hospital’s off-site facility rather than a physician’s office. The CMS and the Alliance for Site Neutral Payment Reform said this difference has led to hospitals buying up physician offices to receive higher rates, increasing costs for both Medicare and patients.
While the site-neutral rule is expected to save the federal government $9.3 billion over 10 years, it poses challenges to health systems who built off-site facilities with the expectation they would receive bigger payments. Overall, payments to hospital off-site facilities will be less than half of what Medicare used to pay them.
Hospitals with facilities under development before the policy was passed pushed for exceptions to the rule arguing that they made construction decisions based on the assumptions they would receive higher reimbursement rates. “The under-development provision, that gives us a little more leeway in terms of paying hospital outpatient departments that were affected by the recent legislation,” Federation of American Hospitals President and CEO Chip Kahn said.
But the alliance argues that all off-site outpatient facilities should be subject to the site-neutral payment policy—not just those built or bought after the rule was passed.
“Finding new cures is a necessary and laudable step, however cures do little to improve care without access,” said Dr. Debra Patt, medical director for the US Oncology Network, which is part of the alliance. “Payment policies that pay more for care in the (hospital outpatient department) setting are literally leading to the elimination of independent physician practices, therefore reducing access to community-based care across America. We respectfully urge Congress to recognize the value of paying the same amount for the same service by ensuring the enacted site-neutral reforms stay in place.”
The American College of Physicians and the American Health Care Association, which represents long-term care and post-acute care providers, are also among the alliance’s members.