Cassidy, Hassan Release Policy Framework on Medicare Site-Neutral Reform to Lower Health Care Costs
WASHINGTON – U.S. Senators Bill Cassidy, M.D. (R-LA) and Maggie Hassan (D-NH) today released a legislative framework to address site-neutral Medicare payment reform to lower health care costs for patients and save taxpayer dollars. Current Medicare regulations allow hospitals to take advantage of the higher Medicare payment structure for hospitals, allowing them to charge the highest possible price for services that can be done in less expensive settings. Many procedures can be done safely and in a less expensive setting like a physician’s office, yet hospitals continue to charge higher prices to do the same.
“As a doctor, my focus is always providing the best care at the most affordable cost,” said Dr. Cassidy. “If the same care can be safely provided in different settings, patients should not pay hundreds more simply because their doctor works in a hospital. Our framework provides a path to ensure that.”
“Patients should not be forced to pay higher bills just because their regular doctor’s office was purchased by a hospital,” said Senator Hassan. “Our bipartisan site-neutral payment framework demonstrates how we can significantly lower health care costs for seniors on Medicare – which in turn will save taxpayers billions of dollars. Our bipartisan framework would also make significant investments in rural and high-needs hospitals that serve their local communities. I look forward to continuing to work with Senator Cassidy and our colleagues on both sides of the aisle on future legislation. There is bipartisan agreement that by pursuing site neutral payment in Medicare, we can lower costs and ensure that more people can get the health care that they need.”
Read the full policy framework here.
Site-neutral policies would require Medicare to pay the same rate for the same service, regardless of where the service is delivered (e.g., hospital, ambulatory surgery center, outpatient clinic).
Currently, Medicare patients and taxpayers share the cost of hospital “facility fees.” These fees, which can be hundreds of dollars, are typically charged when a patient receives basic care—such as a steroid shot or allergy test—in a hospital setting regardless of what the procedure is. These extra fees drive up patient costs and increase provider consolidation incentives, such as hospital ownership of non-hospital care settings such as physician offices. Consolidation reduces patient choice among providers and increases overall health care costs for patients in highly consolidated markets.
Cassidy and Hassan’s framework proposes establishing site-neutral payments in off-campus hospital outpatient departments and for common outpatient services. The framework is endorsed by the United States of Care, Third Way, Small Business Majority, the ERISA Industry Committee, Families USA, Bipartisan Policy Center, the Community Oncology Alliance, West Health Policy Center, the Committee to Protect Health Care, Americans for Prosperity, Alliance to Fight for Health Care, Blue Cross Blue Shield Association, Aledade, American Benefits Council, and Arnold Ventures.
“We know from our listening work that cost is the primary source of anxiety for people when seeking health care, and that it often prevents people from getting the care that they need. Establishing site-neutral payment policy not only promotes fair billing practices for services we all rely on, but it strikes at the core of what people want changed with our health care system,” said United States of Care CEO and Co-Founder Natalie Davis. “This framework is a great first step towards implementing site-neutral payments, and by investing the savings from these reforms into rural hospitals, we’re reinforcing access to health care in communities across the nation. I applaud Sens. Cassidy and Hassan for their hard work and commitment in driving these targeted changes that will help promote transparency, fairness, and access.”
“Small business owners consistently tell us that they’re struggling under the weight of increasingly high healthcare costs,” said Small Business Majority Founder & CEO John Arensmeyer. “Something has to be done to get these expenses in check, and site-neutral billing is a great way to help contain healthcare costs. If we don’t take action to address the enormous cost of healthcare, more and more small businesses will be forced to make difficult decisions such as cutting back employee benefits or, in some cases, closing down their businesses.”
“Employers applaud Senators Hassan and Cassidy for advancing site-neutral payment policies, which drive down costs and promote fair competition. Patients should receive quality care without worrying whether their costs will be inflated by provider consolidation. We look forward to working with Congress to enact these policies into law,” said James Gelfand, President & CEO of the ERISA Industry Committee.
“While hospitals need to be financially sound, what is good for their bottom line is not necessarily good for patients or taxpayers,” said Tim Lash, President of West Health Policy Center. “The time for site-neutral payment reform is long overdue, which is why West Health is supportive of the bipartisan legislative framework put forth by Senators Cassidy and Hassan. Site-neutrality is commonsense policy that could save billions of dollars in healthcare spending, and legislation that closes this policy loophole needs to advance as quickly as possible.”
“Ensuring Americans are paying the same price for the same service regardless of where they seek care is essential to lowering health care costs. Today, Medicare enrollees pay up to four times more for routine care provided at a hospital-owned outpatient facility compared to the cost at an independent doctor’s office, incentivizing large hospital monopolies to buy up physician practices and increase prices. We applaud Sens. Cassidy and Hassan for putting forth a bipartisan framework for comprehensive site-neutral payment reform, a commonsense solution that would lead to savings for Medicare enrollees and taxpayers,” said Mark Miller, Executive Vice President at Arnold Ventures.
“Your health care costs shouldn’t go up just because a corporate hospital system bought your doctor’s office,” said David Merritt, Senior Vice President of External Affairs at Blue Cross Blue Shield Association. “That’s why we applaud Sens. Hassan and Cassidy for releasing a legislative framework that puts consumers first. It ends the practice of hospitals gobbling up independent physician practices and then charging patients as much as five times more for the same service simply because the office changes names. This an important step toward making health care more affordable for all Americans.”
“We have a health care affordability crisis in this country, with America’s families struggling to afford the care they need. Yet all across the nation, big hospital corporations keep jacking up the price of care, buying up small, family-owned doctor’s offices so they can charge more and more for the exact same care and services. It’s time to hold these big corporations accountable and bring down costs for patients. Families USA strongly supports the bipartisan work of Senators Hassan (D-NH) and Cassidy (R-LA) to make sure that people pay the same price for the same health care service, regardless of where the care is delivered. This legislative framework is the roadmap to enacting comprehensive site neutral payment reform which will lower costs for people and save our health care system money, and Congress should get it done,” said Anthony Wright, Executive Director of Families USA.
“The Community Oncology Alliance commends Senator Cassidy for his leadership in putting forth a framework for legislation to create site payment parity, which will reduce medical costs for Medicare seniors, regardless of where they are treated. Higher hospital costs are contributing to mounting medical debt, forcing seniors on fixed incomes to choose between paying hospital bills and keeping food on the table. As a physician, Senator Cassidy also understands that small hospitals are failing, creating treatment ‘deserts’ in rural and underserved communities and need immediate help,” said Ted Okan, Executive Director of the Community Oncology Alliance.
“As a national mobilization of over 20,000 physicians and health care advocates, the Committee to Protect Health Care is proud to support this site neutral payment reform framework from Senators Hassan and Cassidy,” said Dr. Rob Davidson, Executive Director of the Committee to Protect Health Care. “Doctors are increasingly concerned about the growing trend of consolidation among hospitals and outpatient care settings, and how the resulting higher costs for patients often dissuade them from seeking needed care. Common-sense, bipartisan site neutral payment reforms can help protect our patients from being charged more for the same care just because of where they receive it. We thank Senators Hassan and Cassidy for laying this groundwork for continued discussion and look forward to helping shape the legislation that comes from these efforts.”
“Corporate hospital systems are driving up the cost of healthcare. What’s worse, a recent report found that corporate hospital systems are threatening to dump patients’ insurance networks in an attempt to increase their profits. Not only does this strategy make patients innocent victims of predatory billing practices, it increases their out-of-pocket costs and what their employers pay in premiums. Better Solutions for Healthcare commends Sens. Hassan and Cassidy for acknowledging this problem and offering pragmatic solutions to lower the price patients pay for care,” said Connie Partoyan, Executive Director of Better Solutions for Healthcare.
“Employers see site-neutral payment reform as critically important policy to restore competition among health care providers and to better align incentives with value, which are essential to lowering health care costs,” said Ilyse Schuman, Senior Vice President for Health and Paid Leave Policy at the American Benefits Council. “The bipartisan framework set forth today by Senators Cassidy and Hassan not only recognizes the problem but offers common-sense solutions that will lower costs while protecting rural hospitals. We applaud them for leading the charge against runaway health care prices and urge all of Congress to follow their example.”
“Same service, same price! Patients should be free to choose the care setting that’s best for them. That’s why we support site-neutral payment reform and the bipartisan SITE Act, and it’s why we welcome this thoughtful new framework from Senators Cassidy and Hassan,” said Dean Clancy, Senior Health Policy Fellow at Americans for Prosperity. “This bipartisan proposal would give all Americans more personalized health care options, leading to lower out-of-pocket costs for patients, less waste for taxpayers, and more competition in local communities – with protections for local safety-net providers. It’s time for fair billing in health care by making payments to providers site neutral.”
“Incentives that encourage hospitals to consolidate are leaving patients paying more for health care. This bipartisan framework would protect seniors from paying more to hospitals for the same services that are safely and commonly provided in independent physicians’ offices at a much lower price tag. As a result, out-of-pocket costs and premiums would go down, and Medicare’s financial security would drastically improve. Third Way applauds Senator Cassidy and Senator Hassan for leading the charge to reduce the high cost of health care and make hospital care more affordable for patients,” said Darbin Wofford, Senior Health Policy Advisor at Third Way.
“We commend Senators Cassidy and Hassan for their leadership in addressing the key issues driving hospital consolidation and the decline of independent physicians,” said Lawson Mansell, Health Policy Analyst at the Niskanen Center. “Medicare’s practice of paying hospitals and outpatient departments higher rates for routine services that are often provided in physician offices distorts the healthcare market and raises costs for patients. This framework introduces a pragmatic approach to site-neutral payments, correcting harmful financial incentives that inflate healthcare costs while ensuring that hospitals with greater needs can receive appropriate reinvestment.”
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