AHA: Site-Neutral Medicare Reimbursement May Limit Access To Care

The American Hospital Association has published a study suggesting site-neutral payments could threaten access to care for the most at-risk patients, fortifying its argument against the payment rules.

Specifically, the study found Medicare members treated in hospital off-campus provider-based departments (HOPDs) are more likely to be poorer and have more severe chronic conditions than Medicare beneficiaries who receive care in independent physician offices (IPOs).

While HOPDs are currently reimbursed at higher rates than IPOs for services delivered to Medicare patients, Congress is considering site-neutral payment proposals to reduce rising hospital outpatient service spending. This site-neutral model would reimburse HOPDs and IPOs equally.

However, the report’s findings reveal that the characteristics of Medicare patient populations at HOPD and IPO care sites are anything but equal, indicating that site-neutral reimbursement could limit care access for vulnerable populations.

Compared to Medicare beneficiaries treated in IPOs, members who received care in HOPDs were 31 percent more likely to be non-White. Those treated in HOPDs were also from lower income areas, with a median household income of approximately $56,000 compared to $59,000 for those cared for in IPOs.

HOPD claims data showed that those beneficiaries seen in HOPDs were 52 percent more likely to be enrolled in Medicare through disability or ESRD, and 73 percent more likely to be dual-eligible compared to those cared for in IPOs.

The study investigated characteristics of Medicare cancer patients seen in HOPDs and IPOs and found even greater differences in patient demographics. Medicare cancer patients who received care in a HOPD were 81 percent more likely to be non-White, 84 percent more likely to be enrolled in Medicare through disability or ESRD, and 123 percent more likely to be dual-eligible for Medicare and Medicaid.

Additionally, Medicare beneficiaries who sought care in HOPDs were more likely to have prior acute care hospital use 90 days before their visit than those who were treated in IPOs (16 percent vs. 9 percent, respectfully).

Among cancer patients, Medicare beneficiaries who received care in HOPDs were 8 percent more likely to have prior acute care hospital utilization than those who were treated in IPOs (18 percent vs. 10 percent, respectively).

Medicare beneficiaries who sought care in HOPDs were also 11 percent more likely to have utilized the emergency department in the 90 days before their visit than those who were treated in IPOs (28 percent vs. 17 percent, respectfully).

As expected, greater acute and emergency care utilization is linked to worse pre-existing health conditions. Among beneficiaries seen in HOPDs, 58 percent have at least one comorbidity, compared to 46 percent of Medicare patients seen in IPOs.

“The findings of this new study, conducted for the AHA by KNG Health Consulting LLC, highlight why actions implemented in the last few years by the Department of Health and Human Services (HHS), as well as other proposals under consideration by Congress to reimburse hospitals the same amount as physician offices, could threaten access to care for the most vulnerable patients and communities,” the report authors wrote.

AHA, alongside member hospitals and national hospital organizations, filed a petition in February asking the Supreme Court to reverse an appeals court decision that challenged the HHS payment reductions for certain HOPDs in the 2019 outpatient payment rule.

While a lower court found twice that HHS surpassed its statutory authority when it reduced these payments, a three-judge appeals panel reversed the decision in July 2020. 

Rick Pollack, AHA president and CEO, said in a statement emailed to RevCycleIntelligence at the time of the petition’s filing that the site-neutral payment policy undermines “the clear intent of Congress to protect” hospital outpatient off-campus provider-based departments “because of the many real and crucial differences between them and other sites of care.”