By: TAHP | Monday, September 18, 2023

A new Blue Cross Blue Shield Association (BCBSA) study adds to evidence that in some cases the price for the same procedures varies greatly between hospital outpatient departments, ambulatory surgical centers, and physician offices.

Go deeper: The study looked at data between 2017 and 2022 and specific procedures.

• Payments to hospitals for colonoscopies were 58% higher than at ambulatory surgical centers (ASCs).
• The case was the same for cataract surgeries, where hospital reimbursements were 56% higher than at ASCs.

Why it matters: Paying more for services that can be delivered in a less-intensive setting threatens higher insurance premiums and more out-of-pocket costs for consumers. “Site neutral” policies aim to pay the same price regardless of the site of service.

 Massive savings: BCBSA estimates that a site-neutral policy in Medicare would produce combined savings of nearly half a trillion dollars over the next ten years.

• Federal spending on Medicare would drop by $231 billion.
• Employers and families would see insurance premiums decrease by $117 billion.
• Plus, patients would save $152 billion in out-of-pocket costs.

Action in Congress: Recent legislation from both the House and Senate addresses site-neutral payments and facility fees.

• A bi-partisan group in Congress introduced the “Lower Costs, More Transparency Act” (H.R.5378), which includes site-neutral payments and increased billing transparency.
• The Senate Health, Education, Labor, and Pensions (HELP) Committee’s own version of bipartisan reforms—the Primary Care and Health Workforce Act, would ban facility fees outside of the ER including for telehealth visits and routine doctor appointments.
• Both proposals create site of service transparency rules where bills must include a modifier that tells patients and payers where the service occurred. So for example, if a hospital buys a clinic and takes over billing, it doesn’t look like the care is now provided at the hospital.

Zoom in on drug costs: While there have been discussions on different site neutral payment policies, the House bill specifically aims at doctor administered drugs, often referred to as infusion drugs. Why?

• Transparency data shows that hospitals are marking up drugs on average 200% and up to 634% for cancer drugs.
• Compared to doctor’s offices, hospitals are marking up the same drugs by more than double. Same drug, same service, twice the price.

Support is growing: The Better Solutions for Healthcare coalition—a group of employers, health plans, and health care industry leaders—backs site-neutral payment reforms, arguing that patients should not incur new fees simply because the hospital system acquired the office.

Go deeper: If you want to learn more about bipartisan legislation in the House and Senate that would address facility fees and site-neutral payments, Politico is hosting a virtual and in-person discussion. Watch live here.

Panelists include:

• Natalie Davis, CEO and Co-founder United State of Care
• Stacey Hughes, Executive Vice President, Government Relations and public Policy, American Hospital Association
• Rep. Cathy McMorris Rodgers, (R-Wa) Chair, House Energy and Commerce Committee.
• Ilyse Schuman, Senior Vice President Health Policy American Benefits Council

Moderator:

• John Arnold, Co-Founder & Co-Chair Arnold Ventures