Site-neutral payments are coming to Medicare in 2019

By Kate Madden Yee, staff writer

November 6, 2018 -- The U.S. Medicare system in 2019 will officially move toward a site-neutral payment policy in which healthcare providers will be paid the same by Medicare for clinic visits, regardless of where the service took place, according to a final rule issued November 2. The rule upends longstanding Medicare policy in which healthcare payments varied based on the setting.

The rule came as part of the 2019 Medicare Hospital Outpatient Prospective Payment System (HOPPS) and Ambulatory Surgical Center (ASC) payment system rule by the U.S. Centers for Medicare and Medicaid Services (CMS). In releasing the rule, CMS said that moving to site neutrality is necessary to make healthcare more accessible and affordable for patients.

"CMS is exercising its authority to ... control unnecessary increases in the volume of covered hospital outpatient department services by applying a Physician Fee Schedule-equivalent payment rate for the clinic visit service when provided at an off-campus provider-based department that is paid under the OPPS," the agency said. "Currently, Medicare and beneficiaries often pay more for the same type of clinic visit in the hospital outpatient setting than in the physician office setting. This policy [will] result in lower co-payments for beneficiaries and savings for the Medicare program in an estimated amount of $380 million for 2019."

The rule finalizes a 1.25% increase of the HOPPS conversion factor, bringing it up to $79.54 for 2019. A lower conversion factor of $77.95 will be used for hospitals that fail to meet Medicare's Hospital Outpatient Quality Reporting program requirements.

As for ambulatory surgical center payments, CMS suggested updating these rates by 2.1%, in the hope that this change will "help to promote site-neutrality between hospitals and ASCs and encourage the migration of services from the hospital setting to the lower-cost ASC setting."

The rule will also reduce by nine the number of measures ASCs and hospital outpatient departments are required to report under Medicare's program to promote quality in healthcare, according to CMS.

"Measures are being finalized for removal after consideration under certain 'removal factors': if they do not align with current clinical guidelines or practice, performance or improvement on a measure is not strongly linked to better patient outcomes ... or if their costs are greater than the benefits in reporting," the agency said.

CMS is taking comment on the HOPPS final rule through December 3.

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