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.
