Azar: Drive for site-neutral payment system will continue

One day after the White House released its 120-page health policy wish list, HHS Secretary Alex Azar promoted the Trump administration's push toward a site-neutral pay system for Medicare. During a speech and discussion Tuesday at the right-leaning American Enterprise Institute, the administration's top healthcare deputy echoed the report's recommendations for attacking the cost problem through competition.

On the federal level, Azar said, officials and lawmakers need to keep equalizing pay rates for all providers. On the state level, he urged an overhaul of certificate-of-need and scope-of-practice regulations to bring more providers into the field to compete.

The HHS secretary blamed provider consolidations on the Medicare rate boosts for hospitals and hospital-owned clinics because smaller providers "can't say no to the possibility of a new owner that will automatically increase the compensation they get from the government."

During questions after his speech, Azar again emphasized that the administration is "certainly driving toward" a site-neutral payment world.

The CMS roiled the hospital industry over the summer with a proposal to pay the same rate for the same procedure at off-campus hospital outpatient departments and independent doctors' offices. Hospitals asked Congress to intervene to try to get the administration to reverse course.

The latest sweeping policy outline from the White House sought congressional involvement to reinforce its site-neutral policies—an unlikely ask given the politics and the divided government. But the administration has also urged states to develop site-neutral policies through their Medicaid programs and "pay for the value delivered where value is defined according to a relatively limited, straightforward, and non-gameable set of metrics."

Azar said the administration won't back down.

"Fixing this perverse situation has been talked about for years, by administrations of both parties—and yet this administration is the one finally bold enough to do it," he said.

Regarding competition, Azar said state governments can and should have a robust debate about what appropriate regulations look like.

"But personally, I find it hard to fathom how any healthcare consumer needs protection from a nurse practitioner writing a prescription or a new MRI facility opening up down the street," he added.

On the insurance side, the secretary also staked the future of Medicare on Medicare Advantage, predicting enrollment in the private MA plans will take over traditional Medicare and ultimately steer how the government pays for care.

"One-third of beneficiaries are in MA now," he said. "There's a day when we'll have a majority in MA, and it will be the dominant part of the Medicare system. We'll have to rethink the idea that fee-for-service leads and MA follows. It will be MA that innovates and fee-for-service that follows."

Despite his praise for private Medicare Advantage plans and push for equalizing provider pay, Azar didn't mince words about his distaste for a public option through Medicare. He framed the policy as "one of the many iterations" of the single-payer debate because it would establish a single provider pay rate and stated his concern for its effect on the commercial insurance industry.

"If you give everyone access to lower rates, you will crowd out and disrupt the employer market insurance system," the secretary said. "If you pay the option of socialist, price-fixed compensation to doctors and hospitals, there is no way private insurance could compete against it, and it would be disruptive of doctors and hospitals."