News & Updates

July 25, 2017

The Alliance for Site Neutral Payment Reform Endorses Site Neutral Provisions in FY2018 Physician Fee Schedule Proposed Rule

The Alliance commends CMS’ effort to reduce payment discrepancies between physician practices and hospital outpatient departments in proposed 2018 physician payment rule

WASHINGTON — The Alliance for Site Neutral Payment Reform – a coalition of patient advocates, providers, payers and employers supporting payment parity across sites of service – commends the Center for Medicare & Medicaid Services’ (CMS) for taking steps to alleviate payment disparities across hospital outpatient departments and physician practices for the exact same care services in the proposed Physician Fee Schedule (PFS) rule for FY 2018.

The proposed rule, released by CMS on July 13, aims to reduce rates for off-campus provider-based hospital services by 50 percent, making their costs for services more closely align with those provided in the physician practice setting. Currently, PFS payment rates are based on 50 percent of the Outpatient Prospective Payment System (OPPS) rates, however the proposed rule would change this percentage to 25 percent of the rate.

Often times, hospital outpatient departments’ exemption from certain payment reforms forces patients to pay higher costs, especially if they are in areas without private practice options,” said Ted Okon, Executive Director of the Community Oncology Alliance (COA). “We are pleased to see CMS taking action to create better payment alignment to benefit Medicare beneficiaries and protect community-based care practices. By better aligning outpatient hospital and private practice payment rates, Medicare can ensure more options for cost-effective healthcare services for all patients.”

The Alliance has been calling on CMS and lawmakers to advance site neutral payment reforms, which data show can reduce costs to Medicare and out of pocket costs for beneficiaries. Further, by eliminating disparities in Medicare reimbursement, CMS can help slow market trends limiting patient choice and access as a result of hospital and physician practice consolidation.


The Alliance for Site Neutral Payment Reform is a coalition of patient advocates, providers and payers who support payment parity across site of service 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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