One of the greatest contributors to America’s rising high health care costs is bloated hospital bills for simple procedures. We hear plenty of stories about how patients are increasingly confused by the shockingly expensive bills they receive from their providers, especially when their medical care shifts from an outpatient to a hospital-based setting.

Both Medicare and private health insurances pay hospital-owned facilities higher rates than independent medical practices and other outpatient facilities for the exact same services. These higher payment rates create an incentive for hospitals to acquire these independent practices, resulting in higher prices charged to patients. Clinic visits are the most commonly billed service under Medicare, which only reimburses $116 for each visit to an outpatient hospital clinic doctor and $46 for the same level visit for an independent doctor.

Congress is considering two different approaches — site-neutral payment reform and “honest billing” for creating greater price transparency and lowering hospital costs. Both have attracted bipartisan support, but site-neutral payment reform holds greater promise for lowering patients’ medical bills and saving taxpayers money.

Making payments “site-neutral” means reimbursing providers by the same amount regardless of where they provide medical services to patients. For example, several bills would apply that principle to Medicare reimbursements. This would save the federal government billions of dollars and reduce premiums for seniors.

​​Another set of proposals that fall under an “honest billing” category, would not make any changes to Medicare reimbursement and instead focuses on billing hospitals separately for each off-campus outpatient department. While these other “honest billing” proposals present a step forward in advancing site-neutral payment reform to cut costs, they don’t fully move towards equalization of reimbursing hospital versus non-hospital settings and thereby don’t truly implement site-neutral payments. These bills give insurers more transparency about where services are being performed, but they wouldn’t meaningfully reduce costs.

Both the House Education and Workforce (E&W) and House Energy and Commerce (E&C) Committees have separate bills that were recently marked up in committee and fall under the “honest billing” category. The House E&W bill, H.R. 4509, the Transparency In Billing Act, would require hospitals and their hospital outpatient departments (HOPDs) to provide unique health identifiers to insurers for the location where the service was provided to ensure that insurers can bill appropriately. If not, then insurers wouldn’t be required to pay the claims. However, this would only apply to the group market and would require the Department of Labor to issue rulemaking and establish a process for reporting violations. The House E&C bill, H.R. 3237, would also require each provider’s department to include a unique identifier number for claims and services on any billing and requires hospitals to attest every two years that it is in compliance.

The House Committee on Ways and Means held their markup yesterday to consider their own legislation to implement site-neutral payments, which included consideration of H.R. 4822, the Health Care Price Transparency Act. The bill was approved by the Committee in a party-line vote: Democrats opposed the bill due to a removal of a provision to address private equity acquisitions of hospitals and nursing homes, while Republicans all voted in favor.

Similar to the House E&C proposal, this bill would require all off-campus outpatient departments to have a separate national provider identification (NPI) number to bill Medicare. The bill would equalize payments between off-campus hospital outpatient services and physician practices for only drug administration services. On-campus hospitals would still be able to charge more than physician offices for performing the exact same service, which would leave most of the potential savings from site-neutral payments unrealized.

Meanwhile, the Senate Committee on Health, Education, Labor, and Pensions (HELP) postponed their markup scheduled for this week of a health workforce package that contains several additional health reforms, including a provision that would regulate hospital facility fees. Different from the other “honest billing” proposals, the provision would prohibit hospitals from charging facility fees for services provided by off-site physicians and prohibits both the hospital and physician from separately billing for services. Notably, it would cap both the hospital and physician fees at “the median amount the health plan or issuer pays when those services are provided in a physician’s office.” Hospitals would also be prohibited from charging facility fees for on-site primary care, telehealth, and low-complexity services that could be provided in an ambulatory setting.

This type of proposal is a more promising approach than the “honest billing” policies that are under consideration since it would directly affect patient health care costs since facility fees are billed directly to the patient and “honest billing” only addresses NPI numbers for insurance coding. While there are other issues with the bill that likely make it a nonstarter for Republicans, Senator Bill Cassidy has signaled that he’s open to the facility fee provision in another context which is a hopeful sign for future bipartisan support.

Hospitals have countered attempts by Congressional efforts to curb the rising costs of hospital-based care, claiming that any reform to reduce payment rates for hospital outpatient departments would lead to negatively impacting their financial stability. However, a recent study released by the JAMA Network that evaluated hospital financial performance before and during the COVID-19 pandemic shows that 75% of hospitals had a net positive operating income during 2020 and 2021. This was partly due to the COVID-19 relief funding dedicated to aiding hospital net operating margins, resulting in an all-time high in profitability for those hospitals. The study concludes that the relief funds received during COVID-19 were likely larger than necessary for many hospitals.

Congress needs to focus on implementing targeted policies that equalize payments across the three types of facilities, including outpatient departments, off and on campus departments, and ambulatory surgical centers, to save the most for patients and the federal government. It’s abundantly clear that Americans should not be paying more out of pocket for medical services — like chemotherapy, cardiac imaging, and colonoscopies — because of where they received the services at, especially at a time when most hospital profits are at an all time high.

The Progressive Policy Institute joined a coalition letter with 21 organizations and policy experts that supports site-neutral payment reform in Medicare and transparency in service billing in commercial insurance. PPI has long been supportive of site-neutral payment reform and legislative efforts to address this issue.

Medicare — and in many cases, commercial insurers — actually pay hospital-owned facilities higher rates than independent medical practices and other outpatient facilities for the exact same services. The letter explains that these higher payment rates actually create an incentive for hospitals to acquire these independent practices, resulting in higher prices charged to patients and taxpayers:

“Between 2013 and 2018, the share of physician practices that were hospital-owned more than doubled from 14 percent to 31 percent. By 2020, over half of physicians worked directly for a hospital or worked at a physician practice that was owned by a hospital, according to the AMA…An analysis by Northwestern University found the price of physician services increases 14 percent after a hospital purchases a physician practice.”

The Congressional Budget Office (CBO) estimates that these reforms would generate more than $140 billion in savings for taxpayers over ten years.

Hospitals are integral parts of our communities, but hospital care accounts for the largest health spending category in the United States. Americans should not be paying more out of pocket for medical services — like chemotherapy, cardiac imaging, and colonoscopies — because of where they received the services at. Implementing targeted site-neutral policies that promote hospital competition while still protecting rural hospitals and patient access will be critical as Congress considers advancing legislation on site-neutral payments and billing transparency.

Read the full letter here.

 

 

 

 

Black Maternal Health Week is a week-long initiative that raises awareness of the diminished maternal outcomes for Black women in America, who experience higher rates of pregnancy- and childbirth-related deaths. Alarmingly, Black women are three to four times more likely than white women to die from pregnancy-related causes. The CDC lists multiple factors that lead to increased rates of mortality for Black mothers, including implicit bias and discrimination, variation in quality of health care, and underlying health conditions. While differences in coverage and access to care certainly contribute to poorer health outcomes for Black women, they are still facing disparities in maternal and infant health regardless of their socioeconomic circumstances, including their education level or income. While Black women of any background should not be subjected to such poor maternal health outcomes, this starkly demonstrates how racism and discrimination factor into Black women’s maternal health experiences. Worse, Black women had the highest maternal mortality rates across racial and ethnic groups during the pandemic in 2020 and 2021 and had the largest increase when compared to data from 2019. Overall, the United States ranks worse in overall maternal health outcomes than all of our Organisation for Economic Cooperation and Development (OECD) counterparts. Additionally, the only countries with rising maternal mortality rates are the United States, Afghanistan, and Sudan.

Compounding the Black maternal health crisis in the U.S. is the Supreme Court decision to overturn Roe v. Wade. Now, 26 states have fully banned some or basically all access to abortion care, forcing millions of women of reproductive age to navigate their health care options where it is essentially impossible to obtain an abortion care.

Black women are disproportionately harmed by abortion restrictions and bans, which will likely widen the already stark disparities in maternal and infant health in this country. We know that teen birth rates declined over the last several decades thanks to expanded access to reproductive health care, but were higher among Black, Hispanic, American Indian and Alaska Native, and Native Hawaiian and other Pacific Islander teens compared to their white counterparts.

Meanwhile, the recent ruling by a Trump-appointed Texas District Court Judge to take back its approval of mifepristone, a drug for inducing abortions, used safely in this country for 23 years, is threatening to worsen U.S. Black maternal mortality. More than half of all U.S. abortions are done through medications. Mifepristone has been used by nearly 5 million people in the U.S. since it came to the market and is proven to be safer than Tylenol or Viagra. With this ruling, 40 million more could lose access to abortion care, stripping away their ability to make their own choices about their health care because of the egregiousness of one unelected, right-wing judicial activist. One in four women will have an abortion in their lifetime, and the average person who seeks abortion care is a woman of color who is already a mother and lives below the federal poverty line.

While access to abortion care will not fix the maternal health crisis in this country, restricting it will most certainly contribute to worsen America’s devastating maternal mortality crisis. Per the UN General Assembly, carrying a pregnancy to term against a person’s will is, by definition, a violation of human rights. Research confirms that women who are denied access to abortion care are more likely to experience poorer health outcomes. For example, abortion is one option for treatment for gestational diabetes and gestational hypertension, which are contributors to eclampsia. Preeclampsia is one of the most common disorders during both pregnancy and postpartum, and occurs at a 60% higher rate for Black women than white women. Because of the increased maternal mortality for Black women, it is particularly unconscionable to force them to continue an unwanted pregnancy.

Concurrently, this country has also seen a disturbing increase of maternity care deserts. In fact, 36% of U.S. counties are now maternity care deserts, meaning that 7 million women across the country live in these areas where access to maternity health care services is limited or nonexistent. Per a March of Dimes report, American counties classified as deserts increased by 2% since their 2020 report. Overall, one in eight babies born in the U.S. were born in maternity deserts, and one in six Black babies are born in areas with limited or no maternity care services. We are witnessing, in real time, a full on split of this country into abortion and maternal health deserts, prohibiting millions of Americans from accessing lifesaving care.

The Biden administration has taken some significant steps to addressing the maternal mortality crisis. In October 2022, the Department of Health and Human Services (HHS), through the Centers for Medicaid and Medicare (CMS), announced that through the American Rescue Plan (ARP) that was enacted in March 2021, more than half of all states have expanded Medicaid and the Children’s Health Insurance Program (CHIP) to provide 12 months of extended coverage after pregnancy. An estimated 418,000 Americans have now gained this coverage in combination with previously approved state extensions. If remaining states all approved this expansion, an estimated 720,000 Americans would be guaranteed Medicaid and CHIP coverage for 12 months postpartum. Last June 2022, the Biden administration released a blueprint for addressing the maternal health crisis, which offers a broad vision and call to action to address the maternal health crisis.

The most visible effort to address Black maternal mortality in Congress is the Momnibus Act of 2021, sponsored by Congresswomen Alma Adams (D-N.C.), Lauren Underwood (D-Ill.), and Senator Cory Booker (D-N.J.) and other members of the Black Maternal Health Caucus. The Momnibus Act of 2021 is a package of 12 bills that builds on existing legislation to address various issues within the Black maternal health crisis, including: making critical investments in social determinants of health as well as for community-based organizations, providing resources to diversity the perinatal workforce, invests in telemedicine and innovative payment models, and provides support for mothers with maternal mental health conditions and substance use disorders, among others. The Protecting Moms Who Served Act, which supports the Department of Veterans Affairs in studying the unique maternal health risks facing pregnant and postpartum veterans, became the first of these bills to become law in November 2021. The Momnibus Act is highly popular, with support from 72% of registered voters.

The intersection of the curtailing of abortion access and the growing Black maternal mortality crisis in this country, while a preventable and unnecessary circumstance, is a political and policy choice. What does it say about the state of this society and the future of this country if we cannot care for all life givers, especially Black mothers, to ensure that at the very least, they live through their birth experiences? Black mothers deserve to thrive; they deserve to return home to their families, to rest and heal from the life-altering experience of giving birth, to receive support and care from their communities and health care providers. Black women deserve so much more than the bare minimum of surviving pregnancy — they should be able to decide how, when, and whether to grow their families and should receive high quality health care that is accessible, safe, respectful, and culturally competent.

North Carolina has officially become the 40th state to expand Medicaid under the Affordable Care Act (ACA), which is expected to be implemented in 2024 after the state budget is approved, likely this summer. Once implemented, an estimated 600,000 people will be eligible for coverage under the expansion. PPI applauds Governor Roy Cooper for his persistent leadership to garner bipartisan support to ensure North Carolinians have the health care access they deserve through Medicaid expansion. The North Carolina House passed expansion in an 87-24 vote last week, with nearly two-thirds of House Republicans voting in favor.

The path to expansion in North Carolina was no simple feat, as North Carolina Republicans have been staunchly opposed to expansion for over a decade since it’s a policy that was implemented by the Obama administration through the ACA 13 years ago. In fact, GOP members of the North Carolina legislature were so opposed to expansion that they passed a law in 2013 to prevent the governor from even seeking expansion without approval from the General Assembly. The GOP attitude on preventing expansion in North Carolina began to change once they realized Congressional Republicans were not going to succeed in repealing or replacing the ACA in 2017, or raising the state match that coverage requires. Additionally, in May 2022, longtime expansion opponent, State Senate Leader Phil Berger, publicly expressed his support for expansion and framed it as a sensical budget move and one that would help those who fall in the coverage gap whose income is too high to qualify for Medicaid, but too low to benefit from highly subsidized private insurance.

Both chambers of the North Carolina legislature initially passed Medicaid expansion in 2022 but were unable to reach an agreement on the specifics of the state’s Certificate of Need (CON) regulations. An agreement was reached to loosen the CON regulations this year, which also helped pave the way for the expansion’s passage. Notably, the American Rescue Plan (ARP), the $1.9 trillion stimulus package that was passed by Congress and signed into law by President Biden in 2021, allows newly expanded Medicaid states to receive additional federal Medicaid funding for their non-expansion population. North Carolina will now receive this additional funding from the ARP for the first two years of the expansion.

Under the ACA, Medicaid coverage was expanded for adults with incomes up to 138% of the federal poverty level (FPL). This provision was initially a requirement, but became optional after the June 2012 Supreme Court ruling in National Federation of Independent Businesses v. Sebelius, permitting states to choose to opt into expansion or not. With North Carolina now expanding Medicaid, 40 states, including the District of Columbia, have expanded the program. Ten states remain as hold-outs: Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, Wisconsin, and Wyoming. Before North Carolina expanded, South Dakota recently expanded Medicaid in 2022 in a referendum, and will start implementation in July 2023.

How Medicaid expansion will benefit North Carolina:

• 600,000 North Carolinians will be eligible for coverage;
• North Carolina hospitals provide roughly $1 billion in uncompensated care each year. This amount will sharply decline once Medicaid expansion is implemented and the uninsured patients that can opt into Medicaid are covered;
• North Carolina Medicaid expansion will create 40,000 new jobs in North Carolina and will help keep rural hospitals open;
• North Carolina will receive $8 billion in annual federal funding with no additional cost to the state along with an additional $1.8 billion to support behavioral health, public safety support, rural health care and other needs. The state left $5.9 billion in federal funding by not expanding Medicaid in 2022.

 

This data clearly demonstrates what non-expansion states are missing out on. Medicaid expansion is a state revenue generator, a job creator, lowers health care system costs, and most importantly, provides access to health care for low-income and marginalized communities, decreasing health disparities. An estimated 3.7 million people, including non-Hispanic Black people, young adults, and women of reproductive age would gain coverage in 2023 if these remaining hold-out states expanded Medicaid eligibility. It’s high time for Republican lawmakers in non-expansion states to come to the consensus that Medicaid expansion is more than worth setting aside futile partisanship over the ACA. They should look to North Carolina as an example of what is possible when Republicans put aside their opposition to the ACA and reconsider the state budgetary and health benefits of expansion. Americans are still facing financial hardship, incalculable loss, and long-COVID illnesses and disabilities due to the COVID-19 pandemic, which also wreaked havoc on our health care system. Medicaid expansion can provide access to affordable health care and greater financial stability that many Americans desperately need now.

As the country continues to grapple with the consequences of the reversal of Roe v. Wade, the landmark Supreme Court case that guaranteed the constitutional right to an abortion for nearly half a century, it is critical for President Biden to reassure all Americans who can get pregnant that his administration will continue to work to restore abortion rights. President Biden needs to respond to Republicans doubling down on restricting and outlawing access to abortion as they ramp up their campaigns for the 2024 election by further expanding access to medication abortion drugs, including Mifepristone. The Biden administration should eliminate the pharmacy and prescriber certification requirements to dispense mifepristone, and assert the authority of the FDA to preempt state law for FDA-approved medications to prohibit states from banning access to medication abortion.

Now that the Biden administration has announced that the Public Health Emergency (PHE) declaration will end on May 11, President Biden needs to reassure Americans that the transition will not affect their access to coverage and affordable care. The PHE declaration that was issued by the Secretary of Health and Human Services in March 2020 provides flexibilities for the federal government to modify or waive certain requirements, including for Medicare, Medicaid, and the Children’s Health Insurance Program. Those who are vulnerable — children and those with chronic illnesses and disabilities — will need more assistance in navigating the administrative process to regain coverage once the PHE declaration ends. President Biden should call for relaxing eligibility requirements that were exclusionary before the PHE declaration was issued by reducing administrative burdens using administrative data and targeting assistance to those groups to keep eligible individuals and families enrolled.

Additionally, various provisions that were authorized by the Public Readiness and Emergency Preparedness (PREP) Act into the COVID-19 PHE declaration are set to expire next year. These provisions permitted pharmacists and pharmacy technicians to administer COVID-19, flu, and all recommended pediatric vaccines without a prescriber order, even in certain states that have laws that limit pharmacies from administering some vaccines to certain populations. If these provisions expire, 25 states where the authority for pharmacist-administered vaccines has not been made permanent will face the consequences of the expiration most acutely as states will return to restricting pharmacists to administer certain vaccines, including the COVID-19 vaccine. President Biden should call on states to adopt and codify the PREP Act declaration expanding pharmacist ability to vaccinate in state law, which governs pharmacist practice, to ensure Americans continue to have greater access to these life-saving vaccines beyond the end of the PHE.

This post is part of a series from PPI’s policy experts ahead of President Biden’s State of the Union address. Read more here.