By John Wilkerson | June 2, 2017
The Alliance for Site-Neutral Payment Reform asks that CMS use the upcoming outpatient pay rule to pay equal rates to hospital outpatient facilities and doctor offices, which is the opposite of hospitals’ request.
Medicare pays far more for services in hospital-owned doctor offices than in independent doctor offices, the site-neutral group states, so expanding site-neutral policies would significantly reduce Medicare spending and lower copays for beneficiaries, who are responsible for 20 percent of the cost of services.
Congress has been nibbling around the edges of site-neutral pay policy for years. In 2014, lawmakers passed the Improving Medicare Post-Acute Care Transformation Act to set up the post-acute care sectors for eventual payment reforms, including site-neutral pay. The following year, Congress wrote a law that directs CMS to lower doctor-office rates to physician practices that hospitals buy and turn into outpatient departments. The policy applies to off-campus outpatient facilities that were not billing Medicare as of Nov. 2, 2015. Hospitals then convinced Congress a year later to include a measure in 21st Century Cures that exempts hospital outpatient departments that were in development when the site-neutral law took effect.
The Alliance for Site-Neutral Payment Reform wants site-neutral pay rates applied to all off-campus outpatient facilities.
The Alliance for Site-Neutral Payment Reform assembled reports on the trend of hospitals buying doctor practices, which the group says is largely due to the pay rate differences that encourage doctors to sell out and cash in. Cancer doctor practices are especially vulnerable to hospital buyouts. A Milliman study found the portion of chemotherapy infusions the Medicare beneficiaries receive in hospital outpatient departments increased from 16 percent in 2004 to 46 percent 2014.
CMS could make administrative changes that help equalize pay rates for like services, the site-neutral groups says, such as eliminating hospital outpatient department facility fees. The group also says CMS should require that outpatient departments attest their off-campus provider-based facilities meet requirements for receiving higher OPPS payments. The HHS Inspector General reported last year that about three quarters of the 50 hospitals it reviewed had not voluntarily attested their off-campus provider-based off-campus facilities meet at least one requirement for higher outpatient reimbursement.
CMS also should alert consumers to the cost of receiving care at hospital-owned facilities, the group said. CMS’ website lets beneficiaries scroll through a list of covered services and to see the availability and potential cost of of services. However, Medicare.gov does not include information on costs associated with different care settings.
“The 21st Century Cures Act included a provision to provide additional transparency by directing CMS to create a searchable website for patients to compare the cost of services provided in a hospital outpatient department with the cost of services provided in an ambulatory surgical center,” the group says. “However, Medicare patients should have full and transparent access to the varying copayment amounts and cost sharing requirements for all outpatient services provided in all outpatient care settings, including the physician office setting.”