News & Updates

June 7, 2016

Alliance for Site Neutral Payment Reform Calls on Congress to Reject Legislation that Undermines Progress on Site Neutral Payment Policies

Newly introduced bill exempting certain HOPDs and cancer hospitals from payment reform would undercut policies that reduce healthcare costs for patients, employers and taxpayers

WASHINGTON – The Alliance for Site Neutral Payment Reform today voiced its opposition for elements of new legislation that would exempt cancer hospitals and certain Hospital Outpatient Departments (HOPDs) from site neutral payment policies signed into law last November as part of the federal budget agreement.

Sections 201 and 202 of the Helping Hospitals Improve Patient Care Act of 2016 (H.R. 5273) would permit off-campus hospital outpatient departments to continue operating under previous payment systems that allow significantly higher reimbursements for identical care provided in community outpatient locations. Specifically, Section 201 allows any HOPDs that qualify as “mid build” prior to November 2, 2015 – when the Bipartisan Budget Act of 2015 was enacted – to continue receiving full HOPD payments rates, while Section 202 exempts cancer hospitals from the site neutral payment policy and allows them to continue receiving a separate add-on adjustment payment to their Medicare reimbursement.

“Congress has already recognized the negative consequences payment disparities have on patients and Medicare, which is why site neutral payment policies were passed as an important part of the Bipartisan Budget Act last year,” said Ted Okon, executive director of the Community Oncology Alliance. “Any legislation that backpedals on this progress by giving hospitals exemptions to charge more than physicians for identical services only drives up costs for everyone.”

In the absence of site neutral payment policies, higher reimbursement for HOPDs encourages the acquisition of office-based physician practices, which results in higher costs, closure of community-based care centers, and restricted patient access to care in lower cost settings. Data show that an increase in the market share of hospital ownership of physician practices has led to higher healthcare prices and spending. A report published in the Journal of the American Medical Association, for example, found that total spending per patient was 10.3 percent higher for hospital-owned settings compared with physician-owned settings.

Data suggest site neutral payment across Medicare ambulatory settings has the potential to save $29.5 billion over 10 years.

“Congress should closely examine sections 201 and 202 of the Helping Hospitals Improve Patient Care Act, and the impact those provisions will have on overall healthcare costs,” said Ted Okon. “Medicare paying double for the identical medical care, simply based on being provided in outpatient hospital facilities, costs patients more, especially vulnerable seniors, and is bad policy.”

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.

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