News & Updates

September 18, 2019

Alliance Disappointed in Federal Ruling Against Site-Neutral Payments

Ruling will allow hospitals to continue charging patients and payers significantly higher rates for same services provided in community setting—driving up care costs with no meaningful increase in quality 

WASHINGTON—Today the Alliance for Site Neutral Payment Reform (Alliance) today expressed serious concern about a Federal D.C. District Court ruling against the Centers for Medicare & Medicaid Services’ (CMS) policy that reduced payments for outpatient clinic visits for seniors.   

The Alliance is disappointed in the flawed court ruling and remains concerned by the adverse impact it will have on patients and payers, who will be forced to pay higher rates for the exact same services provided by independent physician practices. The Alliance also warns that the federal ruling will lead to greater consolidation of healthcare providers, as it will encourage hospitals to continue acquiring community practices to take advantage of higher prices charged in the hospital-based outpatient departments (HOPD) setting. At a time when patients are suffering from  rising healthcare costs, it makes little sense to roll back these important reforms. 

In her ruling, Judge Rosemary Collyer suggested that there is reason to be concerned by payment disparities between different sites of service. “CMS believes it is paying millions of taxpayer dollars for patient services in hospital outpatient departments that could be provided at less expense in physician offices,” wrote Judge Collyer. “CMS may be correct.”

Congress previously recognized the negative consequences these payment disparities have on patients, taxpayers and businesses by directing CMS to institute site neutral payments for newly acquired and newly built off-campus provider-based HOPDs; however, the majority of existing provider-based off-campus facilities were exempt. In light of the ruling, the Alliance urges Congress to continue working to equalize payments across sites of service for all clinically appropriate outpatient services. 

Site neutral payments generate significant healthcare savings that directly and positively impact beneficiaries, the Medicare program, employers and American taxpayers, in addition to enhancing transparency for patients. According to CMS, site neutral payments for Evaluation and Management (E/M) services are expected to save the Medicare program an estimated $300 million and lower patient co-payments by $80 million in 2019.


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