Coffee with Coker
Episode 71: The Ongoing Battle of Site Neutral Payments
- August 20, 2020
Brandt Jewell and Taylor Cowart join Mark Reiboldt to discuss the latest news for site neutrality. Hospitals have historically benefited from the Outpatient Prospective Payment System (OPPS), the reimbursement mechanism for Hospital Outpatient Departments (HOPD) facility fees, in comparison to their private practice peers functioning under the Medicare Physician Fee Schedule.
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The procedures performed in a freestanding clinic versus an HOPD received 75% less reimbursement. Hospitals were highly incentivized to acquire independent sites, switch the designation to HOPD and begin increasing their reimbursement for the same procedures. This strategy caused HOPD billings to effectively double over the last decade.
Both Medicare and its beneficiaries were under pressure to find a solution.
Between 2018 and 2020, the Centers for Medicare and Medicaid Services (CMS) updated the OPPS rate and proposed to phase in a 60 percent reduction over two years. They believe site neutral payments will give patients more options for their care.
Alternatively, hospitals predicted a massive loss under the site neutral payments into the millions for many organizations. The American Hospital Association (“AHA”), the Association of American Medical Colleges (“AAMC”) and various other private groups took up arms against CMS, arguing that hospitals should receive additional reimbursement as it is inherently more expensive to run HOPDs based on the standards they are required to uphold.