News & Updates

January 11, 2024

Avalere: Site Neutral Payments Affect Small Share of Spending

According to a new analysis from Avalere: The Centers for Medicare & Medicaid Services (CMS) has paid for Medicare fee-for-service (FFS) services at certain off-campus provider-based departments (PBDs) at a reduced rate since calendar year (CY) 2018. The policy was intended to reduce differences in payments between hospital-affiliated locations and independent physician offices. A review of claims processed in CY 2022 shows that only 2.3% of CMS payments for outpatient services are made at the site-neutral rate for off-campus PBDs.

Avalere offers the following considerations for policymakers:

  • Narrowing Exceptions: While site-neutral payments to non-excepted off-campus PBDs accounted for 2.3% of Part B spending in 2022, policymakers may consider whether site-neutral rates should be applied more broadly to excepted sites, which accounted for an additional 10.3% of spending. Under the current policy, excepted sites have also been able to add new service lines (or clinical families of service) that benefit from the site’s ‘excepted’ status and are exempt from site neutral payment policies.
  • Applicable Services: The site-neutral payment changes for outpatient clinic visits (under G0463), which standardize payment at the PFS-equivalent rate for both on- and off-campus outpatient sites, could be adopted for a broader set of services that can be safely provided in hospital or physician office settings.
  • Rural Impact: Policymakers may be particularly sensitive to the impact of site-neutral payment changes on providers in rural settings where access to care is of highest concern. However, revenue generated via off-campus PBDs is lower for rural providers than for urban providers.

Read the full analysis here.