News & Commentary

CMS Aims for Site-neutral Pay


Location, location, location—it’s a big deal in real estate, but it has also mattered a lot when it comes to health care payment. CMS may be changing that. Over the next two years, it will be phasing in “site-neutral” changes that it hopes will level the playing field between physician offices and hospital outpatient departments.

“This policy would result in lower copayments for beneficiaries and savings for the Medicare program in an estimated amount of $380 million for 2019,” CMS said in a press release on November 2.

Hospitals are not thrilled, and here’s the lead to the American Hospital Association’s rapid-response news release: “Today’s misguided final rule will have negative consequences for the patients we serve. This rule, which phases in over two years payment cuts to hospital outpatient clinic visits, is based on unsupportable analyses and erroneous policy rationales. These ill-advised cuts will hit patients in rural and vulnerable communities especially hard.”

The changes will be incorporated in the Hospital Outpatient Prospective Payment System (OPPS) and the Ambulatory Surgical Center (ASC) Payment System. CMS notes that clinic visits are the most common service billed under OPPS. Currently, beneficiary payment for a clinic visit to an off-campus provider-based department is $23. Under the new rule, that would be reduced to $16 in 2019.

“The final policies remove unnecessary and inefficient payment differences so patients can have more affordable choices and options,” CMS Administrator Seema Verma said in the news release.

Jugna Shah, the president of Nimitt Consulting, told Revenue Cycle Advisor, a publication that follows Medicare regulatory issues, that the agency disregarded technical reasons why “it would be completely inappropriate to move forward with the proposed payment reduction.” She predicts that the AHA and other hospital groups will likely mount legal challenges to the new rule.