News & Updates

March 10, 2023

BCBSA: Site-Neutral Payments Would Save Nearly $500 Billion Over 10 Years

The Blue Cross Blue Shield Association (BCBSA), a member of the Alliance for Site Neutral Payment Reform, recently released a white paper titled, “Delivering Lower Costs for Patients and Taxpayers Through Site-Neutral Payment Reform,” which makes several recommendations to lower costs for patients and the Medicare program by bringing payment parity for certain medical services regardless of where the care is administered or who owns the facility.

By way of background, BCBSA notes that “The Balanced Budget Act of 2015 (BBA) established site-neutral payments under Medicare for services received at newly established off-campus HOPDs which restricted new HOPDs from charging patients more for the same medical services that would cost less in other care settings. However, current off-campus HOPDs as of 2015 were exempted and allowed to expand—and can charge higher rates that apply to hospital settings, despite the services not being rendered in a hospital.”

The white paper makes the following recommendations:

  • Policymakers should enact federal legislation to eliminate the grandfathering provision of the BBA, which exempts certain hospital outpatient departments—except emergency departments—from billing limits established under the 2015 law;
  • Medicare should adopt site-neutral payment policies for services that are commonly delivered outside the hospital—excluding rural facilities—at the lower payment rates applicable in non-hospital settings.

If adopted, BCBSA estimates these policies will generate a combined $471 billion in savings over 10 years for the federal government, private health insurance premiums, and consumers’ out-of-pocket costs.

Read the full report here.