How Site-Neutral Payment Reform Divides Policymakers and Hospitals

Complications: Health Policy Unraveled

“Site-neutral” is a short name for a proposal that has bipartisan interest in Congress, but is being fiercely fought by hospitals.

Host Stephanie Kennan explores the divisive issue of site-neutral payment reform, an approach to healthcare spending that would align Medicare payments for outpatient services across care settings. Amid growing bipartisan interest and pressure to rein in healthcare costs, Congress has proposed reforms such as the Medicare Patient Access to Cancer Treatment Act. But hospitals are fighting it because of the potential to reduce revenue and, they worry, decrease healthcare access in rural and low-income communities.

Tune in as Stephanie outlines arguments on both sides of the debate and updates listeners on the status of this controversial approach.

Meet Your Host

Name: Stephanie Kennan

Title: Senior Vice President, Federal Public Affairs at McGuireWoods Consulting

Specialty: Stephanie Kennan helps clients navigate the legislative and executive branches of the federal government to solve problems involving a variety of healthcare policy issues. Her work focuses on providers, medical device manufacturers, drug manufacturers and associations concerned about Medicare and Medicaid reimbursement.

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Episode Highlights

[00:32] “Site-neutral payments” is shorthand for a reform that would align Medicare payments for outpatient services across settings. Hospitals are anything but neutral about this approach – they’re fighting it fiercely.

[00:59] The goal of this approach is for Medicare to pay the same rate for the same service, regardless of what type of facility – outpatient department, surgical center, or freestanding physician’s office – provides it.

[01:37] Last year, a congressional advisory committee on Medicare payments called MedPAC identified potential services that could be appropriate for site-neutral payments.

[02:34] Congress has been focusing on site-neutral payment reform because of concerns about healthcare costs and the rapid pace of consolidation.

[03:56] Opponents argue that this approach would adversely affect patient access to services by reducing hospital venues, particularly in rural and low-income communities.

[05:07] An overview of the various proposals in Congress related to site-neutral payment reform and how hospitals could be affected.

[06:15] Is the fight only about the money? Hospitals point to other concerns, including that this reform could potentially decrease overall healthcare spending.

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