News & Updates

October 27, 2015

Alliance for Site Neutral Payment Reform Applauds Inclusion of Site Neutral Payment Provision in Budget Deal

Coalition of providers, insurers and patient advocacy groups urges lawmakers to advance site neutral payment reform to protect patient access, reduce healthcare spending

WASHINGTON – The Alliance for Site-Neutral Payment Reform today applauded lawmakers for including 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.

The Alliance commended this provision, calling it a “positive step forward in addressing unfair payment disparities for identical clinical services provided in different healthcare settings, which are shown to increase costs and encourage market consolidations that limit patient access.”

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).

The Alliance commended the provision as a pro-patient policy that would protect both patient access and choice. Data show disparities in Medicare payments across care settings drive up patient costs through higher premiums and copayments.

Payment policies that support higher reimbursement in the HOPD setting encourage the acquisition of office-based physician practices, which results in higher costs and the closure of community-based care settings, further restricting patient access to care in the lower cost setting. In fact, data show that an increase in the market share of hospital ownership of physician practices has led to higher healthcare prices and spending.

The Alliance was formed to address payment parity across site of service in order to decrease Medicare and commercial spending, ensure patients receive the right care in the right setting, lower taxpayer and beneficiary costs and increase patient access. While patients need to access various outpatient services in hospital and non-hospital settings, the Alliance encourages site-neutral payment policies that are fiscally wise and enhance patients’ healthcare options.

“Site-neutral payment policies ensure that healthcare payments are based on the needs of the patient and not the site of service,” the Alliance added.

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