Hospitals’ site-neutral game plan


June 30, 2023 10:13 pm

Hospitals are on defense as Congress takes a serious look at site-neutral payments — but they’re not going to let the policy pass without a fight.

Why it matters: Hospitals are a powerful force and have a presence in congressional districts across the country. They argue they’re pushing back against cuts that would end up harming patient care.

  • Advocates, however, say they are simply trying to block any reduction in their payments.

What’s happening: The American Hospital Association held a briefing for congressional staff Monday to push back against site-neutral payment proposals.

  • Hospitals have also been making their case to individual offices. “We have been doing continued outreach to members of Congress, especially those on key committees of jurisdiction,” said Jason Kleinman, AHA’s senior associate director of federal relations.
  • “What we’re really doing now is over the next two weeks, you know, during the recess, using this as an opportunity for our local hospital CEOs … to weigh in with members back home,” said a hospital industry source.
  • “I don’t think we’re at DEFCON 1 yet, but we’re getting pretty close,” the source added.

Driving the news: The House Energy and Commerce Committee has taken the lead so far on exploring site-neutral payments, the idea of equalizing what Medicare pays for the same service between hospital outpatient departments and independent physician offices.

  • Hospital sources say they are also expecting the House Ways and Means Committee to take up site-neutral payments soon.
  • The Senate has been less active on this front and could be a bulwark for hospitals. At a Finance Committee hearing this month on health care consolidation, ranking member Mike Crapo touched on site-neutral payments, but Chairman Ron Wyden did not.
  • Asked by Axios last week if he is open to the idea, Wyden was noncommittal. “Certainly we’re going to look at all of the issues relating to consolidation,” he said.

What they’re saying: Hospitals argue that their outpatient departments treat sicker patients and are held to higher standards than independent physician offices.

  • “Site-neutral payments are cuts to Medicare,” AHA senior vice president for policy Ashley Thompson said at the congressional briefing Monday, disputing “the false belief by some that hospitals are overpaid.”
  • Targeting a prevalent argument in Congress that site-neutral payments are a way to fight consolidation in health care markets, the AHA also rolled out data showing that private equity and health insurers are acquiring more physician practices than hospitals are.
  • One of three hospital officials who flew in for the briefing from across the country, Carl Vaagenes, CEO of Alomere Health in rural Minnesota, said site-neutral payments would “cripple” his hospital.

The other side: An ideologically diverse array of groups, from Americans for Prosperity to Families USA, is supporting site-neutral payments. They point out the move would save money both for the government and patients, through lower premiums and cost-sharing.

  • Loren Adler, a Brookings Institution health policy expert, argued at an E&C hearing in April: “Lobbyists are pretty much the only opposition.”