Congress is likely to take up a measure in the new year that would exempt hospital outpatient departments currently under construction from a “site-neutral” Medicare payment provision, which made it into the two-year budget deal in October that avoided a potential default on the country's debt obligations.
The provision sets the CMS definition for provider-based, off-campus hospital outpatient departments as facilities not on or within 250 yards of the main campus. The provision, meant to equalize payments starting Jan. 1, 2017, grandfathered existing outpatient buildings, but not those being built.
Medicare payments to outpatient departments have been a concern for some time as prices for procedures performed there have risen. A 2013 Medicare Payment Advisory Commission report found that Medicare was paying 141% more for a Level 2 echocardiogram in an outpatient setting, compared to one performed in a physician's office. Policymakers and patient advocacy groups say the disparities are unjustified, and that they incentivize hospitals to acquire physician practices and ambulatory surgery centers to receive higher payments.
The American Hospital Association opposes payment parity. It argues that hospitals, with their emergency department and trauma capacities, have higher cost structures than physician offices.
Rep. Gene Green (D-Texas) recently co-sponsored a bill that would exempt hospital outpatient departments under construction.
“These are common-sense reforms to small gimmicks in the law that have a big impact on patients and healthcare providers,” he said in a news release. “While the provisions were not included in the larger House package, they remain a top priority, and Congress should pass them into law without delay.”