News & Updates

November 3, 2016

Alliance for Site Neutral Payment Reform Commends CMS for Finalizing Site Neutral Payment in Final HOPPS Payment Rule for 2017

Stakeholders express disappointment CMS did not finalize limitations on the expansion of services in hospital outpatient setting

WASHINGTON – The Alliance for Site Neutral Payment Reform today commended the Centers for Medicare & Medicaid Services (CMS) for finalizing site neutral payment policies within its 2017 HOPPS Final Payment Rule, which prohibits a hospital outpatient department from achieving higher reimbursement for the same services provided in the physician office setting. The Final Rule will ensure that hospital off-campus facilities are reimbursed the same rate as the physician office setting if they started billing Medicare after November 2, 2015.

The Final Rule maintains that items and services furnished by certain off-campus “provider-based departments” (PBDs) are to be paid under applicable payment systems (not under the HOPPS) beginning January 1, 2017, as required by Section 603 of the Bipartisan Budget Act of 2015. Section 603 of the Bipartisan Budget Act of 2015 establishes a site neutral payment policy for all newly built or acquired provider based off-campus hospital outpatient departments (HOPD).

The Final Rule also specifically addresses service expansions, relocations, and changes of ownership – each of which has implications on reimbursement. The rule finalizes limitations on relocation of off-campus outpatient departments that are not covered by the site neutral law, however it calls for an exception for “extraordinary circumstances that are outside a hospital’s control, such as natural disasters.” CMS did not, however, finalize limiting the expansion of services offered at off-campus facilities that are not covered by the site neutral pay law.

“We were pleased to see CMS finalize this important first step toward payment parity, however Medicare, taxpayers and patients will continue to pay more for the same services provided depending on the setting of care. The shift of physicians to the hospital setting will only escalate unless site neutral payments are adopted more broadly,” said Dr. Debra Patt, Medical Director for The US Oncology Network. “We will continue to push Congress and the Administration to further site neutral payments in the outpatient space to achieve billions of dollars in saving for patients, employers and American taxpayers.”

The Alliance is dedicated to expanding site neutral payment reforms in order to protect patient access to care in the community setting and limit out of pocket patient costs. The Medicare Payment Advisory Commission (MedPAC) estimates that equalizing payments across 66 groups of care in physician offices and HOPDs would save Medicare patients between $140 million and $360 million in cost-sharing in just one year.


The Alliance for Site Neutral Payment Reform is a coalition of patient advocates, providers and payers who support 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. To learn more visit


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