Washington, D.C. – As former secretaries of Health and Human Services, we understand the challenges of finding areas of agreement across party lines. Despite our differing views, we both agree that tackling healthcare costs is a bipartisan issue that requires attention. One potential area for bipartisan action is addressing site-neutral payments to make healthcare more affordable for patients and taxpayers.
The concept of site-neutral payments involves ensuring that patients do not face higher costs based on the location where they receive medical care. This issue arises when a hospital system purchases a physician’s office, leading to increased prices for services without any actual changes in care delivery. By implementing site-neutral payments, we can prevent hospitals from charging more for services delivered in physician offices and outpatient clinics they acquire.
Data shows that patients receiving care in hospital outpatient departments can be charged significantly more than those receiving the same care in freestanding facilities. These inflated costs are often accompanied by additional fees, exacerbating the financial burden on patients. This trend towards consolidation in healthcare delivery has driven up spending without necessarily improving patient outcomes.
Both the Obama and Trump administrations recognized the importance of addressing site-neutral payments in healthcare. In 2015, President Obama signed into law the Bipartisan Budget Act of 2015, which included provisions for site-neutral payment reform in the Medicare program. The Trump administration also took steps to expand site-neutral payment policies and increase price transparency in hospitals.
Despite past efforts, there is still work to be done in advancing site-neutral payments in healthcare. Last June, the Medicare Payment Advisory Committee recommended that lawmakers move forward with implementing site-neutral payments for certain low-complexity medical services. This could result in significant cost savings for patients and taxpayers, while also curbing incentives for consolidation in the healthcare industry.
Site-neutral payments offer a practical solution to reducing healthcare costs for both patients and taxpayers. By eliminating financial incentives for consolidation and ensuring that care is delivered in the most cost-effective manner, we can work towards a more efficient and affordable healthcare system. It is a policy that has the potential to benefit both patients and payers alike, and one that we believe should be a priority for lawmakers moving forward.