Hospitals are pushing back against proposals to change Medicare payment policies for some outpatient services, even as Congress appears to show more interest.
Some members of Congress have expressed growing interest in a site-neutral policy. Hospitals say such a policy could cost billions of dollars. (Image credit: ©Pierrette Guertin – Stock.adobe.com)
Hospitals and the healthcare system could lose billions of dollars to “facility-neutral” funding policies, according to a new report released Monday by the American Hospital Association.
Some lawmakers have argued that some clinics and ambulatory surgical centers receive lower reimbursement, even though they offer similar services, reducing Medicare payments for hospital outpatient services. suggesting a possible reduction.
Hospitals argue that institutional neutrality is misguided and could cost health systems more economic damage when they can’t afford it. Hospitals face high costs and staff shortages and are facing serious financial difficulties.
The American Hospital Association claims that the proposal to move to facility-neutral payments for some outpatient settings beginning in 2026 will cost hospitals $11.6 billion in the first year and $180.6 billion over 10 years.
According to the hospital association, the health system argues that the facility-neutral proposal is based on the false premise that hospitals are overpaid by Medicare. The hospital claims it doesn’t pay enough for outpatient services provided by Medicare.
“The federal government is significantly underpaying hospital outpatient services, resulting in consistently negative Medicare margins, a staggering minus 17.5% in 2021,” said the AHA. report states:
The report acknowledges that Medicare reimbursement rates for hospital outpatient services rose 7.2% between 2019 and 2022, but the AHA says hospital costs rose 17.5% over the same period.
The hospital association also argues that hospitals are more likely to treat patients with more serious health problems and requiring more complex care.
The AHA report states that hospital outpatient departments are “twice as likely to provide care to patients who are dual eligible for Medicare and Medicaid.”
In addition, hospital outpatient departments are linked to hospitals and face a variety of regulatory demands, such as the need for 24-hour on-call capacity for emergencies and the need for greater emergency care. .
Some lawmakers are wary of the growing consolidation of health care and point to the need for institution-neutral policies to discourage hospitals from buying out medical practices.
In response, the AHA said hospitals were not playing a leading role in obtaining physician services. Private Equity Group Acquires Majority of Physician Practices In a separate report released Monday, the AHA said doctors’ associations and health insurers followed suit over the past five years.
“Private equity entities account for the majority of physician practice acquisition deals and also have the highest number of private providers participating in the deals, according to the AHA, which analyzed data from Levin Associates,” the AHA said. Stated.
Some legislators support a site-neutral policy. Rep. Cathy McMorris Rogers (Republican from Washington) voiced support for the idea at a House subcommittee hearing in April.
“Patients and Medicare pay more in hospitals than outpatient centers and clinics for the same services,” McMorris-Rogers said at the hearing. “Some proposals promote ‘site-neutral payments’ for certain services that can be routinely and safely performed in a clinic, such as drug administration, diagnostic testing, and imaging, to name a few. .
“Medicare and patients will pay the same amount for these services regardless of where they are performed,” she said.
Several advocacy groups are pressuring Congress to push for site-neutral policies.
The Site-Neutral Payment Reform Alliance, which includes the National Health Insurance Plan, the Blue Cross/Blue Shield Association, the American College of Family Medicine, and the American Oncology Network, is calling on lawmakers to cut Medicare payments to outpatient departments.
