Site-neutral payments for Medicare could save nearly $500B, BCBS Association says

Site-neutral payment policies under Medicare could save $471 billion over 10 years for the federal government and in premiums and out-of-pocket costs, the Blue Cross Blue Shield Association said in a new report published Feb 28. 

Medicare currently pays more for the same services when they are provided at hospital outpatient departments than at physician's offices or other settings. 

Congress passed legislation in 2015 establishing site-neutral payment policies at off-campus hospital outpatient departments, but this legislation excludes sites built prior to 2015, even if they expand. 

To maximize savings from site-neutral payments, BCBSA recommends: 

  • Federal legislation to include outpatient departments built before 2015 in site-neutral payments 

  • Medicare adopts site-neutral payments for services commonly provided outside hospitals, which will pave the way for private health plans to do the same

In a news release, David Merritt, senior vice president of policy and advocacy at BCBSA, said hospitals have strong financial incentives to purchase physician practices, giving hospitals more power in negotiating higher reimbursement rates with payers.  

"Congress must protect patients from these inappropriate billing practices by expanding site-neutral payment policies and cracking down on anti-competitive behavior among providers," Mr. Merritt said. 

Site-neutral payments are a key piece of another policy proposal fron the association that it says will reduce healthcare spending by $767 billion over a decade. 

Read the Feb. 28 proposal here.

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