News & Updates

November 6, 2018

Alliance for Site Neutral Payment Reform Responds to OPPS Final Rule

Alliance Commends CMS for Finalizing Site Neutral Provision in Final Rule, Encourages Further Action to Continue Expansion of Site Neutrality for All Outpatient Services

Washington, DC— The Alliance for Site Neutral Payment Reform today commended the Centers for Medicare & Medicaid Services (CMS) for finalizing a provision to expand site neutral payments to all outpatient clinic visits as part of the CY 2019 Outpatient Prospective Payment System (OPPS) final rule.

Beginning next year, CMS will begin a two-year phase-in of a new site neutral payment policy for Evaluation and Management (E/M) services – one of the most common clinic services. The new payment policy will apply the Physician Fee Schedule (PFS) equivalent rate for E/M services when rendered at an off-campus hospital outpatient department (HOPD) that currently bills Medicare under the OPPS. The agency estimates this provision will save the Medicare program an estimated $300 million and lower patient co-payments by $80 million in 2019.

The Alliance strongly supports payment parity for Evaluation & Management (E/M) services performed at all off-campus provider-based departments (PBDs).  Currently, Medicare pays $51 more for a basic E/M visit when it is performed in a hospital outpatient department (HOPD) than in a physician’s office. Medicare spent an additional $1.6 billion and patients were out an extra $400 million in out-of-pocket costs in 2015 due to higher payment rates for E/M visits in HOPDs.

Research shows payment disparities between sites of service have been a major driver of practice consolidation in recent years. Between July 2014 and January 2015 alone, the number of hospital-owned medical practices increased by more than 18,000 as physicians’ offices are acquired and converted into HOPDs so hospitals can take advantage of higher reimbursement rates.

“The Alliance is encouraged by the Administration’s attention to the negative consequences payment disparities between outpatient settings have on marketplace consolidation, patient access to care and volume of services performed in HOPDs,” said Deepak A. Kapoor M.D., Chairman and CEO of Integrated Medical Professionals, PLLC and former president of the Large Urology Group Practice Association (LUGPA). “We urge CMS to continue evaluating all options available to expand payment parity across clinically appropriate outpatient services.”


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