Search Results

Publisher/Organization: Center on Health Insurance Reforms

Payer: Commercial Insurance

Summary: The resource highlights that the same services are often more expensive in hospital outpatient departments (HOPDs) than independent provider offices. Outpatient facility fees and rising hospital prices driven by the increasing market power of consolidated health systems contribute to higher payments for HOPDs. To address this, the resource covers 16 decision points across four domains to help policymakers develop a policy solution that best fits their local needs, circumstances, and priorities.

Topic Areas: Vertical Integration, Payment Differentials, Policy Reforms, Site-Neutrality, Facility Fees

Publisher/Organization: Paragon Health Institute

Payer: Medicare, Medicaid

Summary: This paper argues that site-of-service payment differentials between hospital outpatient departments and lower-cost settings have encouraged hospitals to acquire physician practices. According to the paper, these acquisitions have contributed to rising hospital costs. To promote competition and reduce unnecessary spending, the paper recommends site-neutral payment reform for Medicare and Medicaid.

Topic Areas: Facility Fees, Vertical Integration, Site-Neutrality, Policy Reforms

Publisher/Organization: Center on Health Insurance Reforms

Payer: Medicare

Summary: This resource provides an overview of Medicare hospital payment policies, Medicare site-neutral payment reforms, and ongoing policy debates. It explains that Medicare typically pays hospital outpatient departments (HOPDs) more than independent physician offices for the same services, creating incentives for consolidation and higher spending. Current Medicare site-neutral policies only apply to a limited scope of services in off-campus HOPDs. However, MedPAC recommends expanding site-neutral payments in Medicare and has identified services frequently performed in physician offices or ambulatory surgery centers as candidates for site-neutral payment reforms. The resource also reviews congressional proposals to expand site-neutral payment, noting that Medicare policy may influence commercial insurance payment.

Topic Areas: Policy Reforms, Site-Neutrality

Publisher/Organization: Center for Advancing Health Policy through Research

Payer: Medicare

Summary: The article argues that a new unique National Provider Identifier (NPI) requirement for off-campus hospital outpatient departments billing under Medicare represents a critical first step for full site-neutral payment reform. The authors argue that the NPI requirement sheds light on hospital billing practices and could help inform efforts to prohibit or curtail anticompetitive practices. While the NPI requirement alone will not end site-based payment disparities, it creates the transparency needed to implement broader reforms.

Topic Areas: Policy Reforms, Site-Neutrality, Billing Transparency

Publisher/Organization: FTI Consulting

Payer: Medicare

Summary: The brief analyzes the potential impact on community hospitals of applying site-neutral payment policies to 57 ambulatory payment classifications that MedPAC’s 2023 report identified as safe and routinely provided in physician offices or ambulatory surgical centers. Authors report that site-neutral reforms could reduce Medicare payments to hospitals by about $182 billion over ten years, including $26.3 billion to rural hospitals. Many hospitals could face financial distress and cuts may disproportionately affect emergency, maternal, and mental health service lines. The report notes that hospitals already operate under significant financial and workforce challenges, and further payment reductions could impair hospitals’ ability to sustain access to essential services in vulnerable communities.

Topic Areas: Site-Neutrality, Patients & Quality, Policy Reforms

Publisher/Organization: Community Service Society

Payer: Commercial Insurance

Summary: The brief argues that two features of New York State’s insurance regulatory framework would ensure that savings from the Fair Pricing Act—a proposed state law implementing commercial site-neutral payment policy—are passed on to patients and employers. First, reduced spending on routine services would lead to lower insurance premiums through the state’s rate review process. Second, statutory medical loss ratio requirements would require insurers to either reduce premiums or issue rebates to enrollees if premiums are not aligned with claims spending.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: U.S. Public Interest Research Group

Payer: Commercial Insurance

Summary: This report analyzes the growing use of facility fees for hospital outpatient care in the commercial market. It shows that they are applied in settings without hospital-specific resources and can substantially increase charges for preventive care, diagnostic tests, and routine visits without improving quality. These fees raise out-of-pocket costs and insurance premiums. The report highlights how integration has increased physician employment by hospitals, making it harder for patients to avoid settings with facility fees. The report also reviews state legislative actions and proposes policies such as site-neutral payments, unique National Provider Identifiers, facility fee bans for routine outpatient services, and public reporting of facility fee charges and payments.

Topic Areas: Facility Fees, Site-Neutrality, Vertical Integration, Policy Reforms, Billing Transparency

Publisher/Organization: N/A

Payer: Medicare

Summary: Researchers model archetypal Medicare patients with colon, lung, ovarian, or prostate cancer, assuming fee-for-service coverage and standard treatment courses responsive to therapy. Using real-world claims data and the National Comprehensive Cancer Network’s Clinical Practice Guidelines, the researchers compile typical outpatient services and frequencies expected in the first year of treatment. For services included on MedPAC’s list to pay on a site-neutral basis, they calculate differences between the 2025 Outpatient Prospective Payment System and Medicare Physician Fee Schedule reimbursement rates. They find that expanding site-neutral payments for these services would substantially reduce Medicare patients’ out-of-pocket costs—sometimes by over $1,000 in the first year—and generate Medicare savings averaging more than $5,500 per patient across the four cancers. The largest shares of savings for both patients and Medicare came from drug administration costs, particularly when chemotherapy was part of the treatment regimen.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: Progressive Policy Institute

Payer: Commercial Insurance, Medicare

Summary: This report reviews the impact of hospital-physician integration on prices across Medicare and commercial markets. Examining 70 economic studies, the authors find hospital acquisitions of physician practices are consistently associated with higher prices and increased spending, with average price increases of about 14%. Approximately 45% of the price increases are linked to site-of-service payment differentials, as hospitals can bill higher rates in outpatient settings than in physician practices. Evidence on utilization and quality are mixed. The report identifies site-neutral payment reform as a key strategy to reduce financial incentives for vertical integration, limit price inflation, and curb shifts toward higher-cost care settings.

Topic Areas: Vertical Integration, Site-Neutrality, Payment Differentials

Publisher/Organization: N/A

Payer: Commercial Insurance

Summary: Using 2022 commercial claims data from 48 states and Washington D.C., the study models savings generated by capping payments for routine services at 150% of the Medicare Physician Fee Schedule rates in hospitals, ambulatory surgical centers, and physician offices. Implementing site-neutral payments would reduce commercial insurance spending by about $10.8 billion annually, or about $72 per enrollee, with wide variation across states. The savings stem from lower prices for services that can be safely performed in physician offices or ambulatory surgery centers but are reimbursed more when delivered in hospital outpatient departments. The policy would modestly reduce hospital margins, suggesting limited financial disruption relative to savings.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: Bipartisan Policy Center

Payer: Medicare

Summary: This issue brief describes current Medicare payment law and the debate over expanding site-neutral payment reforms in Medicare. It notes that Medicare often pays more for outpatient services in hospital outpatient departments than in physician offices, creating incentives for consolidation and higher spending. Proponents of site-neutral reforms say aligning payments across sites of care could save Medicare money, reduce beneficiary cost sharing, and lessen incentives for hospitals to acquire physician practices. Opponents argue that hospitals face higher overhead and regulatory costs. Thus, lowering payments in hospital outpatient settings could strain budgets and access, especially in rural and underserved areas.

Topic Areas: Site-Neutrality, Vertical Integration, Policy Reforms

Publisher/Organization: National Academy for State Health Policy

Payer: Commercial Insurance

Summary: This model legislation provides a framework for states to implement site-neutral payment policies in the commercial market for outpatient services identified as safe and appropriate to deliver outside hospital settings. It proposes setting payment rates as a proportion of Medicare reimbursement, designed to cover costs for independent facilities while allowing for reasonable revenue margins. The model includes provisions to reduce site-of-care payment differentials by standardizing reimbursement across settings, alongside requirements for consolidated billing, payer-provider contract terms, and clear definitions of covered services. It also establishes reporting and oversight mechanisms to support enforcement and transparency, and allows for the addition of services over time.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: US of Care

Payer: Commercial Insurance

Summary: This report analyzes how three payment policies—site-neutral payments, facility fee prohibitions, and commercial hospital price caps—could affect consumer costs and hospital finances in Indiana, Massachusetts, and North Carolina in 2022. The authors find that setting commercial site-neutral rates at 100% of the Medicare non-hospital payment rate for the 57 services MedPAC identified could reduce consumer premiums and out-of-pocket costs by over $840 million. Hospital operating margins in the states would also remain positive after the site-neutral reform. They also find that banning facility fees for evaluation and management, preventive, and telehealth services in hospital outpatient departments could save consumers $121-$323 million per state, while hospitals would continue to maintain positive operating margins. Finally, the report estimates that capping commercial hospital prices at 200% of Medicare rates could save over $5 billion per state without leading to negative hospital operating margins. The authors conclude that policies aimed at curbing excessive hospital payments could lower costs without threatening hospital financial viability.

Topic Areas: Payment Differentials, Site-Neutrality, Policy Reforms, Facility Fees

Publisher/Organization: N/A

Payer: Medicare

Summary: Using 2021 Medicare fee-for-service claims for a 20% sample of beneficiaries, the study estimates the savings associated with site-neutral payment proposals for services paid under the Outpatient Prospective Payment System, Ambulatory Surgery Center Payment System, and Physician Fee Schedule. The study compares the provisions introduced in the federal Lower Costs, More Transparency Act bill (2023) along with other policy options, including a 2024 analysis by the Actuarial Research Corporation and MedPAC’s 2023 recommendations. Because MedPAC’s approach applies to a broader set of services, it is estimated to produce more than $7 billion in annual Medicare savings, compared to about $212 million under the more limited Lower Costs, More Transparency Act. The analysis also finds that payment reductions for the proposals would be distributed proportionally across hospital types, with small and rural hospitals experiencing smaller aggregate impacts due to lower outpatient volumes.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: N/A

Payer: Commercial Insurance

Summary: Using national Blue Cross Blue Shield claims data from patients with infusion visits for cancer biologics and biosimilars between 2020 and 2022, the study compares two policy strategies to moderate spending. The competition strategy seeks to lower prices through biosimilar market entry, while the site-neutral payment strategy caps hospital payment at levels paid to physician practices. Results show that site-neutral payment could save about $1.004 billion over three years, nearly twice the $0.465 billion savings projected from biosimilar competition.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: N/A

Payer: Medicare

Summary: This study analyzes 2013-2020 Medicare claims data to evaluate the impact of site-neutral payment provisions implemented under the Bipartisan Budget Act of 2015. It finds that the policy affected a small share of services, resulting in only about 1.5% of hospital outpatient department spending paid on a site-neutral basis. As a result, the reform had minimal impact on overall Medicare outpatient spending and hospital-physician integration.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: Center for Advancing Health Policy through Research

Payer: Commercial Insurance

Summary: This report evaluates the potential impact of the Fair Pricing Act, which would cap commercial payments at a percentage of Medicare’s non-hospital rates for the same low-complexity services recommended by MedPAC. Applying a 150% cap in 2022 could have saved approximately $1.14 billion. This includes, $169-$213 million in reduced out-of-pocket costs for consumers, $121 million in savings for the New York City Health Benefits Program, and $72 million in savings for the New York State Health Insurance Program. However, regional variation in hospital pricing could lead to uneven financial savings across New York.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: N/A

Payer: Commercial Insurance

Summary: The study estimates that paying for services identified in MedPAC’s June 2022 report on a site-neutral basis would have reduced spending in the employer-sponsored insurance (ESI) market by $58.2 billion in 2022. Between 2024 and 2033, estimated savings would have been $847 billion for the ESI market and $898 billion for the broader commercial market, which includes ESI and individual coverage. The authors estimate that these savings would lead to ESI premium reductions of about 5.35% in 2024, declining to around 5.0% by 2033 as health care inflation outpaces savings from site-neutral payment reforms. These premium reductions reflect total premiums, which employers and employees share.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: Center for Advancing Health Policy through Research

Payer: Medicare

Summary: Researchers review the evidence on site-neutral payment reforms, including the history of federal site-neutral policy reform in Medicare as well as the challenges and concerns that hospital groups have raised. The researchers present five policy options to decrease the site-of-service payment differential: uniform payment rates, evidence-based payment adjustments, monitoring and evaluation, enhanced transparency and accountability, and enhanced sustainability of rural and marginalized access to care.

Topic Areas: Payment Differentials, Site-Neutrality, Policy Reforms

Publisher/Organization: KFF

Payer: Medicare

Summary: This resource provides an overview of Medicare site-neutral payment reform, explaining how varied payment rates for the same services across care settings contribute to higher healthcare spending. It reviews ongoing policy interest in site-neutral payment expansion beyond the initial 2015 reforms, outlines legislative proposals, and summarizes common arguments for and against such policies. The resource also discusses policy design options to limit or offset potential negative impacts on certain providers, such as rural and safety-net hospitals, highlighting the trade-offs involved in reducing site-of-care payment differentials while maintaining access to care.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: Blue Health Intelligence

Payer: Commercial Insurance

Summary: Using national commercial claims data for roughly 123 million people between 2017 and 2022, researchers found that allowed costs for thousands of outpatient services were consistently higher when provided in hospital outpatient departments (HOPDs) than in ambulatory surgery centers (ASCs) or physician offices. HOPD prices also grew more rapidly over time than prices in ASCs or offices. The brief concludes that implementing site-neutral payments would generate substantial savings for patients, employers, and insurers by reducing these price disparities.

Topic Areas: Facility Fees, Payment Differentials, Site-Neutrality

Publisher/Organization: Yale Tobin Center for Economic Policy

Payer: Medicare

Summary: The review synthesizes literature on Medicare’s site-neutral payment policies. It shows that payment differences for the same outpatient services across hospitals, ambulatory surgical centers, and physician offices increase spending and beneficiary costs. Eliminating these differences could lower costs without harming quality. The authors find that payment differentials have encouraged hospital-physician vertical integration, but peer-reviewed evidence has shown that hospital-based care does not yield better patient outcomes for comparable services. Because commercial payers often follow Medicare’s lead, these payment disparities extend into the commercial insurance market. The review also discusses site-neutral policies and proposals as of 2023.

Topic Areas: Payment Differentials, Vertical Integration, Policy Reforms, Site-Neutrality, Patients & Quality

Publisher/Organization: Blue Health Intelligence

Payer: Commercial Insurance

Summary: Analyzing commercial insurance claims from 2017 to 2022, researchers compare allowed costs for six outpatient procedures across hospital outpatient departments (HOPDs), ambulatory surgery centers (ASCs), and physician offices. The study finds that allowed costs for the same procedures were consistently higher at HOPDs than other settings and that these costs have grown faster over time. The findings suggest that site-neutral payments across care delivery settings would result in substantial savings for employers, employees, and patients.

Topic Areas: Site-Neutrality, Payment Differentials

Publisher/Organization: MedPAC

Payer: Medicare

Summary: In an update to its June 2022 report, MedPAC uses more recent data to reassess opportunities for site-neutral payment reform under Medicare’s Outpatient Prospective Payment System (OPPS). The update identifies 57 ambulatory payment classifications (APCs) most commonly delivered in freestanding physician offices. MedPAC recommends Congress consider adjusting OPPS and ambulatory surgery center (ASC) payment rates to more closely align with the physician fee schedule (PFS) for those services. For an additional nine APCs with the highest volume in ASCs, OPPS payment rates could be aligned with ASC rates. For the remaining 103 APCs, HOPDs accounted for the majority of services, so MedPAC does not recommend changes to equalize payment rates.

Topic Areas: Site-Neutrality, Policy Reforms

Publisher/Organization: Committee for a Responsible Federal Budget

Payer: Commercial Insurance

Summary: The report estimates that implementing site-neutral payment policies in the commercial insurance market from 2024 to 2033 could reduce total national health expenditures by $458 billion, lower commercial insurance premiums by $386 billion, decrease patient cost sharing by $73 billion, and reduce the federal budget deficit by $117 billion. It attributes these savings to narrowing site-of-care payment differentials, particularly by lowering payment for services billed in hospital outpatient departments (HOPDs). To achieve these savings, the report outlines a three-step policy approach: requiring unified billing to improve transparency, capping total payments for services delivered at off-campus HOPDs, and extending price caps to selected services at on-campus HOPDs. The analysis also illustrates substantial price variation across sites of care for common services.

Topic Areas: Payment Differentials, Site-Neutrality, Policy Reforms

Publisher/Organization: Congressional Budget Office

Payer: Commercial Insurance

Summary: The report explains that hospital and physician service prices are higher and more variable in the commercial market than in Medicare. Both provider market power limiting insurer bargaining power and limited consumer and employer price sensitivity contribute to these trends. These high prices, in turn, raise insurance premiums, patient cost sharing, and federal subsidies for commercial coverage. The Congressional Budget Office outlines policy approaches Congress could consider to reduce commercial prices, including promoting provider competition, increasing price transparency, and capping or limiting prices (including site-neutral reform).

Topic Areas: Vertical Integration, Site-Neutrality, Policy Reforms

Publisher/Organization: MedPAC

Payer: Medicare

Summary: The analysis evaluates Medicare’s Outpatient Prospective Payment System (OPPS) and identifies opportunities for site-neutral payment across ambulatory payment classifications (APCs). It finds that for 57 APCs, it would be reasonable to align payments across hospital outpatient departments (HOPDs), ambulatory surgery centers (ASCs), and physician offices at the physician fee schedule (PFS) rate; for eleven APCs, HOPD and ASC payments could be aligned to ASC rates while physician offices remain at PFS levels; and for 101 APCs, differential payments are likely appropriate because HOPDs are the most suitable setting. While acknowledging that HOPDs incur higher costs due to requirements such as maintaining standby emergency capacity, the authors find little evidence that patients receiving the services examined are systematically more complex or sicker in hospital settings. They suggest that higher-acuity services—such as emergency department, critical care, and trauma visits—may warrant distinct payment categories.

Topic Areas: Site-Neutrality, Patients & Quality, Policy Reforms

Publisher/Organization: Employee Benefit Research Institute

Payer: Commercial Insurance

Summary: The brief explains how the cost of physician-administered specialty drugs differs by site of care in the commercial market. For the 72 physician-administered drugs studied, allowed payments were higher in hospital outpatient departments (HOPDs) than in physician offices for all but two drugs. Given that the drugs examined were more likely to be delivered in an HOPD setting, authors estimate that eliminating price differentials for these drugs between HOPDs and physician offices would save employers and workers approximately $10.3 billion annually. Expanding site-neutral payment or shifting care away from HOPDs for all physician-administered outpatient drugs examined would increase estimated savings to $14.1 billion per year.

Topic Areas: Site-Neutrality, Payment Differentials, Policy Reforms

Publisher/Organization: N/A

Payer: Medicare

Summary: Using 2010-2016 Medicare payment data, the study estimates that the average physician working in an independent physician office would have earned about $114,000 more in 2016 by billing services through a hospital outpatient department (HOPD) than an independent practice, with substantial variation by specialty. The analysis also finds that payment incentives from annual Medicare payment updates for HOPD services may have contributed to greater physician-hospital integration over time. The authors suggest that Medicare site-neutral payment reforms could reduce incentives to shift care toward more expensive sites of care and have a “cooling effect” on vertical integration. However, hospitals’ motivation to acquire physician practices may persist due to the advantage integration provides in negotiating higher prices with commercial payers.

Topic Areas: Vertical Integration, Policy Reforms, Payment Differentials, Site-Neutrality

Publisher/Organization: N/A

Payer: Medicare

Summary: Using 2017 Medicare Physician/Supplier Procedure Summary data, researchers analyze where otolaryngologists provide outpatient clinic visits and estimated the financial impact of site-neutral payment reforms for off-campus hospital outpatient departments (HOPDs). The study finds that 91.9% of the 5.1 million clinic visits occurred in physician offices, while only 8% took place in HOPDs, and just 2.2% occurred in off-campus hospital settings. As a result, applying site-neutral payment rates to off-campus HOPD visits would have produced a relatively modest overall payment reduction of about $12.2 million in 2017 for this specialty, with some variation among specialties.

Topic Areas: Payment Differentials, Site-Neutrality, Policy Reforms