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AHA Report: Site-Neutral Payment Policies May Threaten Access to Care

April 23, 2021

Medicare patients treated at hospital outpatient departments tend to be poorer and have more severe chronic conditions than Medicare patients treated at independent physician offices, according to a new study from the American Hospital Association (AHA).

Released last week, the AHA report highlights how recent federal initiatives to cut reimbursement for hospital outpatient services threaten access to care for the nation’s most vulnerable patients and communities. In recent years, so-called “site-neutral” policies have aimed to reimburse health care providers at equal rates—without considering the significant time, staffing, and resources hospitals devote to care for patients with the highest needs, the AHA notes.

“Patients of higher complexity may require a greater level of care than patients of lower complexity,” the AHA report notes. “To the extent that these differences result in variations in the cost of care, site-neutral payments may have adverse effects on patient access to care.”

According to the AHA study, Medicare patients treated in hospital outpatient departments are more likely to be:

  • From lower-income areas
  • Have more severe chronic conditions
  • Older than 85 or younger than 65, and therefore eligible for Medicare based on disability or end-stage renal disease
  • Previously hospitalized
  • Eligible for both Medicare and Medicaid
  • Previously cared for in an emergency department, and requiring higher Medicare spending prior to receiving ambulatory care

The AHA also studied Medicare cancer patients at hospital outpatient departments and independent physician offices and found similar results.

HAP joins the AHA to emphasize the value hospitals provide to care for everyone, regardless of their health status or ability to pay. The AHA report notes that hospital outpatient departments treat more complex cases and also have more comprehensive licensing, accreditation, and regulatory requirements than independent physician offices.

The AHA report on hospital outpatient departments and independent physician offices is available online. In February, the AHA filed a brief to the U.S. Supreme Court to reverse a recent appeals court decision challenging payment reductions for certain outpatient hospital services.

HAP will continue to monitor federal proposals about site-neutral payments and provide updates on this important issue. HAP opposes site-neutral policies because they do not take into account the unique costs and resources required of hospitals or the outstanding, comprehensive level of care offered by these facilities.

For more information, contact Laura Stevens Kent, HAP’s senior vice president, strategic integration, or Kate Slatt, HAP’s vice president, innovative payment and care delivery.