News: AHA urges government to reject further site-neutral payment policies

Section 603 of the Bipartisan Budget Act of 2015 declared that any off-campus hospital outpatient departments that started billing after passage of the bill November 2, 2015, would not be paid under the OPPS, but other Part B payment systems, such as the Medicare Physician Fee Schedule (MPFS) or Ambulatory Surgical Center (ASC) Fee Schedule.

This change will have a drastic impact on hospital payments, according to the AHA, and its surprise inclusion in the budget bill puts potentially millions of dollars at risk for facilities that were in the process of developing off-campus departments when the bill passed.

Hospital outpatient departments have many more regulatory requirements and roles than physician offices and ASCs. These include 24/7 standby capacity for emergency department services, disaster preparedness and response, and uncompensated care. Hospitals also tend to treat sicker patients than other types of facilities.

According to the Medicare Payment Advisory Commission (MedPAC), the Medicare margins for hospital outpatient department services were at negative 12.4% in 2013. Further recommendations from MedPAC would push those margins to negative 21.2%, according to the AHA, even without considering the clause in Section 603.

Editor’s Note: This article was originally published in Medicare Insider.