News & Updates

February 11, 2020

Alliance for Site Neutral Payment Reform Commends Inclusion of Site Neutral Payment Reforms in President’s FY 2021 Budget

The Alliance for Site Neutral Payment Reform – a coalition of healthcare providers, insurers, employers and patient advocacy groups established to address growing access to care issues driven by disparities in payment rates for identical clinical services provided in different healthcare settings – today commended the Trump administration for its continued support for site neutral payment provisions. The President’s FY 2021 budget calls for expanding site neutral payments for all off-campus hospital-owned physician practices.

Under the proposal, Medicare would pay all hospital-owned physician offices located off-campus at the physician office rate, which the administration estimates would save approximately $47.2 billion over ten years. The budget also proposes to further eliminate payment disparities in outpatient care by applying site neutral payments for certain services performed at on-campus hospital outpatient departments (HOPDs) which would save approximately $117.2 billion; this proposal would exempt rural hospitals.

While the 2015 Bipartisan Budget Act requires site neutral payments for newly-built or newly-acquired HOPDs, emergency departments, cancer hospitals, and “grandfathered” HOPDs are still allowed to charge significantly higher rates than physician offices for the exact same services. This results in unnecessary costs to taxpayers and Medicare beneficiaries. According to a November 2017 report by Avalere, Medicare paid an additional $2.7 billion, and patients spent $411 million more in out-of-pocket costs, when certain services were delivered in a hospital-owned setting.

The Alliance commends the budget proposal as a pro-patient policy that would lower out-of-pocket costs and improve patient access and choice. The policy would ensure that Medicare beneficiaries—and federal taxpayers— pay the same amount for the same service regardless of hospital ownership or facility type.

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