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Insurers, physicans ask rejection of site-neutral provision

A coalition of physician advocacy groups and insurers that includes the Blue Cross and Blue Shield Association and insurance industry lobbying group America’s Health Insurance Plans is asking Congress to reject a provision in the 21st Century Cures Act that lets some lets some hospital-owned outpatient facilities avoid some site-neutral payment rules.

The Alliance for Site Neutral Payment Reform called on House Energy and Commerce committees leaders to oppose exempting cancer hospitals and other outpatient departments under development before Nov. 2, 2015, from the payment policies passed as part of the Bipartisan Budget Act of 2015 and finalized by the CMS earlier this month.

Modern Healthcare reported: “The alliance said the 21st Century Cures provisions would continue to drive up costs for Medicare and patients and would encourage hospitals to swallow up independent physician practices, thereby reducing patient choice.”

The group’s letter to Congress said: “Preserving an outdated reimbursement policy that continues to drive up healthcare spending in the outpatient space is counter to Congress’s goal of modernizing the Medicare system and providing patients with healthcare choices at less cost.”
Modern Healthcare reported that “Insurers want to limit the exceptions to the site-neutral payment rates because those exempted outpatient facilities will ultimately be paid more and insurers want to keep Medicare reimbursement low. Moreover, prices tend to float up when providers consolidate, so insurers end up paying more.”

The publication noted: “Medicare pays a higher rate for services provided in a hospital’s off-site facility rather than a physician’s office. The CMS and the Alliance for Site Neutral Payment Reform said this difference has led to hospitals buying up physician offices to receive higher rates, increasing costs for both Medicare and patients.”

To read the Modern Healthcare piece, please hit this link.

Vast differences in costs in one market



Even in the same geographical area,  hospital prices for routine knee- and hip-replacement surgeries vary vastly.

For instance, show that hip-replacement costs in the  Los Angeles-Long Beach market,  ranged from $17,260 to $46,448, say claims data from the Blue Cross  and Blue Shield Association.

How much will patients react to this long-suppressed information? Will many still favor the sexier academic hospital systems over the cheaper nonteaching hospitals now that new high-deductible plans give insured patients more financial skin in the game?


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