WASHINGTON – The Alliance for Site Neutral Payment Reform – a coalition of patient advocates, providers, payers, and employers – today applauded lawmakers on the House Energy and Commerce Health Subcommittee for exploring ways to increase transparency and improve competition in America’s health care system. As the committee considers opportunities to empower patients and lower health care costs, the Alliance encourages lawmakers to consider site neutral payment reforms.
Payment policies supporting higher reimbursement in the hospital outpatient department (HOPD) setting have led to a significant shift in the delivery of certain services from independent physician practices to the HOPD, and increased costs for patients, employers, and taxpayers. The Alliance has long supported reforms that would ensure Medicare reimburses—and beneficiaries pay— the same amount for the same service, regardless of the setting in which it was provided.
In addition to increasing costs for patients and for the health care system overall, site-of-service payment disparities encourage consolidation across the health care marketplace. As of 2021, only 30% of physicians in the U.S. practice medicine independently, while 70% of physicians are employed by hospital systems or other corporate entities such as private equity firms and health insurers. This anti-competitive behavior limits patients’ ability to choose where they receive their healthcare and drives up unnecessary health care spending.
Congress previously recognized the negative consequences this payment disparity has on patients, taxpayers, and businesses by directing CMS to institute site neutral payments for newly-built or newly-acquired off-campus provider-based HOPDs in the Bipartisan Budget Act of 2015. However, the majority of off-campus HOPDs are still able to bill Medicare at the much higher rate for the same services and still have a strong incentive to purchase physician practices and move them into existing HOPDs.
The Alliance for Site Neutral Payment Reform appreciates the Health Subcommittee’s attention to this issue and urges subcommittee members to support site neutral payment policies to promote patient choice and lower taxpayer and beneficiary costs.