Greater site neutrality would reduce hospitals' incentives to acquire physician practices and in turn help private insurers secure better prices, according to an analysis from the USC-Brookings Schaeffer Initiative for Health Policy.
Here's what you should know:
1. CMS' proposed change to Medicare's hospital outpatient prospective payment system would generate significant savings for Medicare and its beneficiaries and foster greater competition in the physician services market, said initiative authors.
2. However, authors believe CMS and Congress should apply site-neutral payment to a significantly broader set of clinical services and at both off-campus and on-campus HOPDs, as well as at ASCs.
3. The disparity in payment rates between HOPDs and physicians' offices creates an incentive for hospitals to acquire physicians' practices and convert them into more costly HOPDs. Hospital ownership of physician practices also spikes costs for private payers, the authors said.
4. The Bipartisan Budget Act of 2015 took a step toward site-neutral payment by requiring Medicare to pay for services at new off-campus HOPDs under the physician fee schedule.
However, it exempted certain care settings and didn't eliminate strong incentives for hospitals to buy and relocate physician practices to the HOPD setting. CMS' recent proposal would address that by extending physician fee schedule rates to clinic visits at off-campus HOPDs grandfathered under the BBA.
5. To generate more savings, the authors recommend "eliminating the grandfathering of higher OPPS payments to existing off-campus HOPDs for all services, not just clinic visits."
6. They also recommend policymakers align payments to on-campus HOPDs with payments to freestanding physician practices.
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