Hospitals are unfairly treated as a result of site-neutral payments, which aim to charge the same wherever a service is provided, because of the unique services they provide, according to Rick Pollack, CEO of the American Hospital Association.
Pollack outlines several reasons why such payments don't work in a July 2 op-ed in The Hill, declaring "now is not the time to expand flawed policies that undermine the unique services hospitals provide for their patients."
According to Pollack, “site-neutral payment policies are based on an erroneous assumption that hospitals are overpaid for outpatient services provided to Medicare patients,” stating that outpatient margins are already negative 17.5%, while hospitals’ expenses increased by 17.5% between 2019 and 2022, and Medicare rates for outpatient care increased by only 7.5% during that same period.
Additionally, patients, particularly those in rural and medically underserved communities, could lose access to local hospital care. Rural hospitals heavily rely on government payers, with Medicare comprising almost half of their revenue. The chronic underpayment by Medicare has already led to the closure or conversion of at least 149 rural hospitals since 2010. Additional site-neutral cuts would further exacerbate financial hardships, reduce access to essential services, and potentially result in more hospital closures.
Physicians are increasingly choosing employment over independent practice due to rising costs and burdens imposed by policies like commercial insurer prior authorizations.
Click Here to read the full Op-Ed.