News & Updates

February 23, 2021

Health Savers Initiative: Equalizing Medicare Payments Regardless of Site-of-Care

A joint venture between the Committee for the Responsible Federal Budget, Arnold Ventures, and West Health recently released a policy brief recommending policymakers consider “Equalizing Medicare Payments Regardless of Site-of-Care” to reduce health costs for households, businesses, and the federal government.

In part, the authors argue: “higher payments are difficult to justify when offered to off-campus facilities that operate exactly the same as an independent physician’s office but are treated as HOPDs simply because they are hospital-owned. Often, hospitals purchase previously independent physicians’ offices largely to take advantage of the higher rate available by changing the office’s designation. In these cases, the exact same services are delivered by the exact same personnel, but at a higher cost to public and private payers.”

The policy brief recommends site neutral payments for HOPD services that are commonly and safely performed in physicians’ offices or ASCs and for which the patient mix is relatively equal, using criteria developed and recommended by MedPAC.

According to the brief, site neutral payment reform would save Medicare dollars and reduce Medicare premiums and cost-sharing, but also generate savings throughout the health care system. The brief estimated over the next decade (2021-2030), this policy could:

  • Reduce Medicare spending by $153 billion
  • Reduce premiums and cost-sharing for Medicare beneficiaries by $94 billion
  • Reduce total national health expenditures by a range of $346 to $672 billion
  • Reduce the federal budget deficit by a range of $217 to $279 billion
  • Reduce private cost-sharing and premiums by a range of $140 to $466 billion

To read the full study: