AAFP Renews Push for Site-neutral Payment

2019 OPPS Phase-in Should Continue and Expand, Academy Tells CMS

October 09, 2019 02:40 pm News Staff

The Academy's advocacy regarding site-neutral payment is continuing, with recent correspondence praising a CMS payment reform proposal and pushing for the agency and Congress to bolster site-of-service payment parity.

[outpatient sign on building]

Independently and as part of the Alliance for Site Neutral Payment Reform,(www.siteneutral.org) the AAFP offered responses to CMS' proposed changes to the 2020 hospital outpatient prospective payment and ambulatory surgical center payment systems,(www.govinfo.gov) which were published in the Aug. 9 Federal Register. The proposed rule -- which would align payment policies for independent physician practices and hospital-owned practices -- would complete a two-year phase-in that drew strong AAFP support. 

In a Sept. 19 letter(2 page PDF) to CMS Administrator Seema Verma, M.P.H., the Academy urged the agency to finalize the phased-in OPPS policy and pressed for further progress.

"The AAFP encourages CMS to also consider site-of-service payment parity polices from a broader perspective," said the letter, signed by (then) Board Chair Michael Munger, M.D., of Overland Park, Kan.

"Namely, CMS should not pay more for the same services in the inpatient, outpatient or ambulatory surgical center setting than in the physician office setting. The AAFP encourages CMS to create incentives for services to be performed in the most cost-effective location, such as a physician's office."

The letter added that distinctions between "inpatient," "outpatient" and other sites of service should be understood as outdated contrivance; such labels, the Academy said, are "a product of the equally artificial distinction" between Medicare Part A and Part B.

"The AAFP calls for policies that progress beyond this silo mentality and instead pay for health care services in a more consistent and equitable manner," the letter said.

Payment parity would encourage patients to make decisions based on quality rather than cost, the Academy reminded CMS. Further, patients and caregivers should be well-informed about their options.

"The AAFP therefore wholeheartedly supports CMS requiring all hospitals in the United States, beginning on Jan. 1, 2020, to disclose online to patients how much they charge for all supplies, tests and procedures," the letter said.

The issue was pressed further in a Sept. 27 letter(www.siteneutral.org) to Verma from the Alliance for Site Neutral Payment Reform. The Alliance -- a coalition that includes the AAFP and other organizations representing physicians, patient advocates, payers and employers -- also applauded the 2020 proposed rule while pointing out opportunities for increased parity.

Noting that OPPS volume for several common procedures has increased, while growth for the same procedures in physician office settings has remained stagnant, the Alliance called on CMS to equalize evaluation and management payment rates between the two.

"This proposal is a step toward ensuring patients receive the right care in the right setting and will result in an estimated $810 million in savings for the Medicare program and taxpayers in 2020 alone," said the Alliance's letter.

Meanwhile, in a pair of Sept. 19 letters to leaders of the Senate Finance Committee(2 page PDF) and the House Ways and Means Committee,(2 page PDF) the Academy expressed disappointment at a federal district court ruling that threatens to move the payment needle in the wrong direction.

The AAFP told lawmakers that the Sept. 17 ruling in American Hospital Association et al. vs. Azar,(www.courtlistener.com) which said CMS overreached in its move toward site-neutral payment, preserves "an unjust system that costs Medicare patients more for their care and, ultimately, limits their choice of physicians by paying hospital outpatient departments more for the same services provided by community-based physicians."

The Academy encouraged legislators to work with CMS "to create incentives for services to be performed in the most cost-effective location, such as a physician's office."

Related AAFP News Coverage
Proposed 2019 Medicare Physician Fee Schedule
AAFP Digs In, Gives CMS Comprehensive Comments on MPFS
(9/6/2018)