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 the community to the HOPD, resulting in increased costs to patients, employers and taxpayers.

Congress has recognized the negative consequences this policy has on patients, taxpayers and businesses and included a site neutral payment provision in the Bipartisan Budget Act of 2015.

The provision aligns payments for all newly acquired provider-based off-campus HOPDs with payments to physician practices paid under either the Ambulatory Surgical Center (ASC PPS) or the Medicare fee schedule.

The Alliance urges Congress to standby the site neutral payment provision included in the budget deal and expand the policy to equalize payments across sites of service for all outpatient services.


Equalizing payments across healthcare settings will benefit patients by reducing out of pocket costs, preserving patient choice and ensuring access to community-based care.


Across the Medicare program, reimbursement rates vary significantly based on site of service and not the healthcare service provided. The Administration, the Medicare Payment Advisory Commission (MedPAC) and bipartisan lawmakers have all recommended site neutral payment reforms to reduce Medicare spending.


Private insurance claims data also show increased spending on HOPD services is playing a major role in overall spending growth on the publicly and privately insured because of increases in both prices and volume.

Market Consolidation

Data show that current healthcare payment structures contribute greatly to a trend that lawmakers are examining closely: healthcare marketplace consolidations.