Medicare’s payment standardization for outpatient services, irrespective of the healthcare facility in which they are offered, is currently a contentious topic. Legislative efforts in recent years have attempted to establish site-neutral outpatient payments. However, uncertainty remains as to whether these bills will be enacted into law, particularly with a growing lobby of hospitals against such measures. The potential benefits of site-neutral payments are obvious; they could reduce costs for both patients and taxpayers, as well as for Medicare and private insurers. It is estimated that these benefits could amount to a savings of billions of dollars over time. However, such a move would also lead to considerable payment reductions for hospitals.
The argument isn’t just about lost revenue. A cause for concern is that the institution of such laws might result in closures of service lines that could compromise patient access to care. The American Hospital Association (AHA) has warned that site-neutral payments may cause hospitals to discontinue certain outpatient services such as imaging or physical therapy, and also eliminate other required service lines.
American hospitals are facing vigorous opposition concerning site-neutral payments. The American Hospital Association and the industry at large argue that site-neutral payment policies would reduce their reimbursement rates during a time when many hospitals are already financially struggling. According to AHA estimates, the PATIENT Act alone could bring about a hospital reimbursement cut of $4.1 billion over 10 years.
However, many payer organizations and lobbying groups advocating for patients and lower taxpayer costs support legislative efforts to establish site-neutral payments. They argue that these policies would decrease overall healthcare spending and protect the affordability of patients’ out-of-pocket healthcare costs.
Furthermore, the Yale study published last year shows that there is no evidence that outpatient care provided in hospital-owned facilities results in better outcomes than care provided in physicians’ offices.
An expert not affiliated with a health system or AHA also believes that site-neutral billing for outpatient care could result in unwanted consequences for hospitals. Site-neutral payments could put hospitals’ ability to cross-subsidize at risk, meaning it would make it harder for them to use revenue from higher-paying services to offset the costs of lower-paying services. Beth Mosier, director of health and life sciences M&A for West Monroe added that site neutrality could also negatively affect the degree of flexibility in treatment plans at hospital-owned sites.
Details of this complex issue can be found in the original article on MedCity News.