News & Updates

May 3, 2024

New Third Way Memo: Lowering Hospital Prices while Protecting Rural Patients

A new memo from Third Way pushes back against hospital claims that legislation requiring site neutral payments for drug administration services would harm rural hospitals. Third Way finds that 99% of rural outpatient spending is unaffected by The Lower Costs, More Transparency Act. Here’s why:

  1. The site-neutral provisions would only apply to clinics owned by the hospital but located away from its main campus. It is less common for rural hospitals to have clinics at a separate location.1
  2. Just 7% of Medicare’s total off-campus outpatient spending occurs in rural areas. The legislation exempts Critical Access Hospitals, which account for 61% of all rural hospitals.
  3. The legislation applies only to drug administration, which is only 17% of off-campus outpatient spending.

Additionally, non-exempt rural hospitals would have five years before the provision would take effect. All other hospitals would have four years.

Read the full memo from Third Way here.