One procedure, two prices. Site-neutral payments in Medicare the next big health care reform

As Medicare appropriations continue to increase, policymakers have been focused on ideas to reduce costs while preserving access to care for beneficiaries. Expanding site-neutral payment in Medicare has become the most popular and effective solution, with the introduction of several bills and discussion drafts seeking to fix the Medicare billing structure that allows hospitals to charge higher rates than independently-owned practices.

Most recently, a bipartisan bill (S.1869) has been introduced in the U.S. Senate by Senators Mike Braun (R-IN), Maggie Hassan (D-NH), and John Kennedy (R-LA). The bill has been referred to the Senate Committee on Finance, of which Nevada Senator Catherine Cortez Masto (D-NV) is a member.

Due to Medicare's current billing structure, even if care is received at an off-campus outpatient facility, it can be billed as though the care was provided at the main hospital campus. This results in higher hospital rates charged to the patient. The Congressional Budget Office estimated that taxpayers will pay close to $40 billion in excess costs to Medicare due to exorbitant facility fee payments over the next decade.

This issue has become more prevalent as independent physician-owned practices are increasingly acquired by larger hospital systems. The current billing structure incentivizes hospitals to acquire private practices to then upcharge patients at the higher hospital rate. Even before the pandemic, the healthcare system was becoming increasingly more consolidated causing rising costs and no clear indications of quality improvements.

Site-neutrality has been the rare issue to attract bipartisan support, and has been a platform initiative for Presidents Barack Obama, Donald Trump, and Joe Biden.

The bill (S.1869), titled the Site-based Invoicing and Transparency Enhancement (SITE) Act, would ensure that Medicare reimburses care fairly for off-campus services, regardless of who owns the provider. Specifically, the bill would:

- End exceptions to the 2015's Bipartisan Budget Act site-neutral payment requirements, which exempted most facilities from fair billing requirements.

- Prevent off-campus emergency departments from charging higher rates than on-campus emergency departments when standalone emergency facilities are located in close proximity to a hospital campus.

- Require that health systems establish and bill using a unique National Provider Identifier number for each and every off-campus outpatient department.

- Direct HHS to treat outpatient departments as subparts of the parent organization and to issue these subparts unique provider identifiers.

- Remove liability for services rendered for payers that are not billed in accordance with this section's requirements.

Patients across Nevada also face barriers to health care access due to staff shortages. Health care providers across the country are struggling to hire and retain qualified nurses to staff their facilities, and hundreds of thousands of new nurses will need to be trained over the next decade to meet our evolving health care workforce needs. The SITE Act would respond to these needs by reinvesting savings from this bill into a national nurse training program, which would:

- Create a graduate nursing education program to provide payments for qualified advanced practice registered nurse (APRN) training costs.

- Support a network of regional partnerships between hospitals, clinical training sites, and schools of nursing.

- Create 20,000 training positions per year, phased in over six years.

- Appropriate $100 million for the program.

The bill was introduced on June 7, 2023 and referred to the Committee on Finance for debate. In addition to the Senate bill, a similar bill by Representatives Kevin Hern (OK-01) and Annie Kuster (NH-02) was introduced. Titled the Facilitating Accountability in Reimbursements (FAIR) Act, the bill also seeks to harmonize billing practices in off campus hospital outpatient facilities to reflect the site of care.