Site-Neutral Payment Proposals Threaten Access to Care

As federal and local lawmakers discuss policies to improve access, equity, and affordability of healthcare, providers across the country continue to warn that imposing site-neutral payments would contradict these goals, endangering hospitals’ and health systems’ ability to provide life-saving, around-the-clock care to all patients, regardless of their ability to pay, especially in underserved communities.

U.S. Senators Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) on Friday, November 1, 2024 released a federal policy framework detailing a proposed plan that would require Medicare to implement site-neutral payments.  Critically, this proposal fails to recognize the fundamental differences between hospital outpatient departments (HOPD) and other sites of care.

Given their unique role, while treating sicker and lower-income patients, hospitals are held to higher licensing, accreditation, and regulatory standards than independent physician offices and ambulatory surgical centers.  Hospitals must be prepared and equipped to provide emergency care 24/7, serve as a safety net provider for vulnerable populations, respond to natural and man-made disasters, and more — and they must cover the costs of complying with these requirements through their direct patient care revenue.

Payments to hospitals support patient care staff and the variety of other staff and services needed to provide world-class care to every patient, including Medicaid, low-income, and complex patients.  They make it possible for hospitals to continue expanding access to high-quality healthcare on hospital campuses and in off-campus, community settings — meeting patients where they are.  And these conveniently located services are supporting the shift that’s driving policymakers to prioritize preventive outpatient care, keeping individuals healthy and out of the hospital.

As Connecticut faces economic headwinds, the Connecticut Hospital Association (CHA) continues to advocate for federal and state policies that remove barriers to timely care and address the true drivers of healthcare costs, including significant underpayments to providers.  In Connecticut, hospitals receive reimbursement from Medicaid for only about 62% and from Medicare for only 74% of what it costs to provide the care to those patients, amounting to nearly $2.8 billion in losses in 2022.  Raising Medicaid and Medicare reimbursement rates is the most immediate way to enhance healthcare affordability and accessibility.

Click here to read a CHA editorial explaining how site-neutral policies would jeopardize patient access to essential healthcare services.