Sens. Cassidy, Hassan eye site-neutral payments policy

Hospital outpatient facilities would receive lower Medicare reimbursements under a "site-neutral" payment policy framework Sens. Dr. Bill Cassidy (R-La.) and Maggie Hassan (D-N.H.) unveiled Friday.

The Cassidy-Hassan plan would equalize Medicare reimbursements for common outpatient services at hospital-owned offsite locations, ambulatory surgery centers and other clinics. As health systems have acquired a growing number of physician practices and other outpatient sites, Congress and state legislators are seeking to limit them from charging Medicare higher rates than other outpatient providers.

Related: Hospitals on defense as Congress weighs pay, 340B, M&A bills

“If the same care can be safely provided in different settings, patients should not pay hundreds more simply because their doctor works in a hospital. Our framework provides a path to ensure that,” Cassidy said in a news release. Cassidy, a gastroenterologist, also is the senior Republican on the Health, Education, Labor and Pensions Committee in the majority-Democratic upper chamber.

Cassidy and Hassan are members of the Finance Committee, which has jurisdiction over Medicare policy, and aim for their outline to form the basis of a bill. Congress is set to return to Washington after Election Day for a lame duck session with a packed agenda. Site-neutral payment legislation is one of the items lawmakers may attempt to quickly dispatch, but Cassidy and Hassan have not introduced a bill.

The Cassidy-Hassan plan specifically targets the facility fees hospitals attach to claims for outpatient services, which other providers don't do. “Patients should not be forced to pay higher bills just because their regular doctor’s office was purchased by a hospital,” Hassan said in the news release.

The senators expect their framework would lead to lower Medicare spending. "Our bipartisan site-neutral payment framework demonstrates how we can significantly lower healthcare costs for seniors on Medicare — which in turn will save taxpayers billions of dollars," Hassan said.

The lawmakers intend to divert the savings to support hospitals that treat high numbers of low-income patients, are located in rural areas, and offer psychiatry, obstetrics and other essential services.

Cassidy and Hassan secured endorsements from an array of healthcare and employer organizations, including the Blue Cross Blue Shield Association, the American Benefits Council, the ERISA Industry Committee and Small Business Majority. The plan also won support from think tanks across the ideological spectrum from the conservative Americans for Prosperity to the liberal Families USA.

The American Hospital Association and the Federation of American Hospitals are not among those cheering on Cassidy and Hassan.

"Rather than addressing the root causes driving physician acquisitions, this framework instead proposes dramatic and untenable Medicare cuts, reducing seniors’ access to critical hospital-based care. We urge Congress to address the true drivers of physician acquisitions, which include significant underpayments to providers and persistent delays and denials of care by commercial insurers," AHA Executive Vice President Stacey Hughes said in a news release.

“Site neutral policies equate to Medicare cuts that threaten access to 24/7 hospital care — a framework Congress has rejected time and again. Seniors deserve better than tired old policies pushed by the insurance industry that just threaten access to reliable hospital care,” a Federation spokesperson said in a news release.