WASHINGTON – The Alliance for Site Neutral Payment Reform – a coalition of patient advocates, providers, payers, and employers – today commended House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Ranking Member Frank Pallone, Jr. (D-NJ), House Ways and Means Committee Chair Jason Smith (R-MO), and House Education and the Workforce Committee Chair Virginia Foxx (R-NC) for the inclusion of site neutral payments in H.R. 5378, the Lower Costs, More Transparency Act.
The Alliance strongly supports Section 203 of the legislation, which requires site neutral payments for drug administration in off-campus hospital outpatient departments (HOPDs). This provision will lower out-of-pocket costs for patients and address significant payment disparities between sites of service that are driving healthcare consolidation.
The Alliance notes that Section 203 is critical to addressing longstanding issues in the Bipartisan Budget Act (BBA) of 2015, which required site neutral payments for new off-campus HOPDs. Under the 2015 law, the vast majority of HOPDs were grandfathered under the old, higher payment rates. As a result, Medicare continues to reimburse HOPDs at much higher rates than physician offices for the exact same services.
Current payment disparities across sites of service create an incentive for hospitals to acquire lower-cost, independent physician practices and charge much higher rates. Between 2012 and 2022, the share of physicians working in private practices fell by 13.4%, while the number of physicians who work in a hospital-owned practice increased from 23.4% to 31.3%, according to a recent report. As a result, patients are faced with higher out-of-pocket costs and Medicare spending increases.
The Alliance thanks Members of the House Committees on Energy and Commerce, Ways and Means, and Education and the Workforce for their commitment to this policy and urges support for this provision.