ACP Applauds Government Plan to Equalize Billing Practices

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Sept. 7, 2018 (ACP) – The Medicare agency's proposal to stop paying more for patient care given in hospital-run outpatient clinics has been met with approval from the American College of Physicians.

Instead, the agency intends to move toward so-called site-neutral payments.

“ACP agrees with the Centers for Medicare and Medicaid Services that there is no justification for patients and the Medicare program paying more for a visit to a doctor when the service is provided in an office owned by a hospital than it would for the same type of visit in an independent physician practice,” said Dr. Ana María López, ACP's president. “Such additional ‘facility fee’ add-on payments do not result in better service or value to the patient.”

As a founder of the Alliance for Site Neutral Payment Reform, ACP has long been a national leader in the push for site-neutral payments, which treat physicians the same regardless of whether they provide clinical visits in independent practices or in a hospital-owned setting.

That's not what happens when Medicare allows hospitals to charge more for outpatient visits. As Bob Doherty, ACP's senior vice president for governmental affairs and public policy, explained it:

“One day, you go to your primary care doctor in her office to get medical care, and you are billed only for the medical care you received from her. Under Medicare law, you would be responsible for 20 percent of the cost of the billed services. Six months later, you end up going to the same doctor, in the same office space, for the same kind of services, and you are billed the 20 percent share for the medical care you receive plus 20 percent of the facility fee.”

Nothing has changed except the practice ownership, “yet you are forced to pay more,” Doherty said. “This additional facility fee charge can create a real financial barrier to Medicare patients, many of whom are on fixed incomes and having trouble making ends meet.”

Hospitals, on the other hand, are big fans of the facility fee, which they see as a tool to help them pay for unreimbursed charity care.

ACP, however, believes this burden should not be borne by patients through higher out-of-pocket costs and increased co-pays. Instead, the College believes that the costs borne by hospitals to provide uncompensated care should be explicitly and adequately funded by the government, and that measures should be taken to ensure that all Americans have affordable coverage.

In 2016, the Obama administration and Congress moved to eliminate the facility fee, but they allowed exceptions that “grandfathered in” existing hospital-owned clinics.

Now, federal officials are moving to close this loophole, a move they estimate will save patients $150 million a year.

CMS-proposed revisions to payment rules – the Outpatient Prospective Payment System (OPPS) & Ambulatory Surgical Center (ASC) – were released July 25. They include recommendations that are in line with ACP's policy, including the ones the College recommended below:

  • The institution of more policies to reduce payment differences between sites of service. In addition, more services will be added to the ASC covered procedures list.
  • The removal of 15 measures that ASCs and outpatient departments are required to report under their respective quality programs, as part of its meaningful measure initiative and in line with fee schedule changes. This aligns with ACP's goal of reducing documentation burdens through the Patients Before Paperwork initiative.
  • The implementation of Requests for Information on price transparency, a Medicare Part B drug model and the Advancing My HealthEData initiative.

The proposed rule changes are slated to undergo review before being finalized, and ACP intends to provide comments and suggest ways to further improve the rules before they take effect.

More Information

ACP's policy on provider-based billing is available on the College's website.

ACP's statement on site-neutral payments is available here.

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Back to the September 07, 2018 issue of ACP Advocate