News & Updates

December 7, 2023

Hospitals, Site-Neutral Pay Advocates Put Competing Pressure On Congress – Inside Health Policy, Dec. 7, 2023

Hospitals are urging lawmakers to remove site-neutral pay for drug administration provisions — and make changes to provisions that codify hospital price transparency requirements and 340B reporting requirements — in the Lower Costs, More Transparency Act, which is set to come up for a House vote the week of Dec. 11, but the Alliance for Site Neutral Payment Reform is calling for lawmakers to go beyond the site-neutral pay policies in the bill to eliminate the site-neutral pay exemptions currently in statute.

The House tri-committee package of pharmacy benefit manager reforms, provider price transparency, hospital drug administration site-neutral pay and extenders is set to be taken up under the suspension of the rules, but the American Hospital Association, which has opposed site-neutral pay policies, is calling for changes ahead of that vote.

“The AHA supports the elimination of the Medicaid disproportionate share hospital (DSH) reductions for two years. However, hospitals and health systems strongly oppose efforts to include permanent site-neutral payment cuts in this bill. In addition, the AHA has concerns about the added regulatory burdens on hospitals and health systems from the sections to codify the Hospital Price Transparency Rule and to establish unique identifiers for off-campus hospital outpatient departments (HOPDs),” the hospitals say.

With regards to the price transparency requirements, the hospitals say the penalties for non-compliant hospitals under the Lower Costs, More Transparency Act, which would top out at $10 million, are a far cry from CMS’ current $2 million limit. Hospitals that built price estimator tools would also be hurt by provisions in the bill, AHA adds, because it would no longer recognize price estimator tools as a method to meet the shoppable services requirement.

AHA urges changes to the bill that would allow the use of price estimator tools to meet the shoppable services requirement and let CMS determine the maximum penalty assessed to hospitals that don’t meet price transparency requirements.

The hospitals also call for site-neutral pay policies to be eliminated.

“There is nothing neutral about site-neutral payment policies — not the level or quality of care, not the patient complexity, and not the enhanced regulatory oversight of hospitals. Unfortunately, Section 203 of the Lower Costs, More Transparency Act would disregard these important differences in care sites by implementing harmful site-neutral payment cuts for drug administration services furnished in off-campus provider-based departments,” AHA says in a Dec. 6 letter to House leadership.

The hospitals say the provision doesn’t recognize longstanding safety and quality requirements for drug administration services that apply at hospital outpatient departments but not physician offices. The new cuts would also come on top of the current site-neutral pay policies that AHA says have hurt hospitals financially and “contributed to Medicare’s chronic failure to cover the cost of caring for its beneficiaries.”

However, the Alliance for Site Neutral Payment Reforms applauds movement on the Lower Costs, More Transparency Act and is urging Congress to go farther as lawmakers consider a broader appropriation package next year. The group wants lawmakers to look at reforms that would remove exemptions to the existing site-neutral pay policies for certain off-campus hospital departments that were grandfathered in when the policies were put in place.

“[W]e strongly encourage you and your colleagues in Congress to embrace commonsense changes to our healthcare delivery system that will directly lower out-of-pocket costs for patients, provide savings and stability for the Medicare program and promote transparency in the healthcare marketplace. We urge Congress to pass legislation requiring site neutral payments for drug administration services and eliminating the grandfathering provisions under BBA 2015,” a Dec. 6 letter from the alliance to House leadership says.

The group praises the drug administration policy for saving about $3.8 billion over 10 years — which AHA denounced as a cut hospitals can’t afford — and says the policy will help tackle pay disparities between sites of service that are driving health care consolidation.

“As the House works to finalize appropriations for the remainder of the 2024 fiscal year, the Alliance for Site Neutral Payment Reform urges you to consider site neutral payment reforms to achieve significant healthcare savings that directly and positively impact beneficiaries, the Medicare program, employers and American taxpayers, and enhance transparency for patients,” the group says.