News & Updates

March 16, 2023

Brookings: Enact Site Neutral Payments to Increase Competition

A recent report from the Brookings Institution highlights several policies that could reduce health care costs by increasing competition. The authors argue these policies have attracted various levels of bipartisan interest in recent years and could make progress in a divided Congress.

According to the report, “In addition to the direct costs, paying more for physician services at a HOPD encourages hospitals to buy physician practices. A growing body of evidence finds that hospital-physician vertical consolidation drives up costs both for Medicare and for commercial payers. Therefore, policies that limit site of service payment differentials are likely to also generate savings for the commercially-insured population.”

The authors offer the following policy recommendations:

  • Require payment based on the PFS for all off-campus HOPD services
  • Require the same for a subset of services at on-campus HOPDs, ASCs, and other facilities that can be appropriately performed in a physician’s office
  • Reduce payments to HOPDs to the ASC payment levels for certain services

Read the full report here.