W&M To Mark Up Site Neutral, Fair Billing Policies From PATIENT Act

July 25, 2023

The House Ways & Means Committee will mark up Wednesday (July 26) measures that would establish site-neutral payments in Medicare for hospital outpatient departments located separate from the hospital and create fair billing requirements in Medicare as part of broader legislation unveiled late Monday. The site-neutral provisions were immediately blasted by hospitals.

The Health Care Transparency Act will be marked up alongside another health care transparency bill, the Providers and Payers COMPETE Act. The two bills are the latest iteration in lawmakers’ ongoing battle to finalize site-neutral pay policies and fair billing, and also build in reporting requirements for pharmacy benefit managers, steps to keep insurers’ prior authorization in check and limits on Medicare Part D plans’ cost-sharing amounts for beneficiaries.

The Ways & Means legislation is the eighth piece of legislation pending in Congress on fair billing and site neutrality following the introduction of facility fee legislation by Senate health committee Chair Bernie Sanders (I-VT) Thursday (July 20) that has since stalled.

In a new memo on site neutral policy movement, Darbin Wofford, a health policy advisor for ThirdWay, reiterated that the topic boils down to issues of fair billing and site-neutral payment reforms as Ways & Means heads into the markup. Third Way in May called for policymakers to remove the exceptions to Medicare’s current site-neutral pay policies.

Now, the Health Care Price Transparency Act would create parity in payments for outpatient services delivered in hospital outpatient departments located separate from the hospital. The new legislation aligns with elements of the PATIENT Act, which passed unanimously though the House Energy & Commerce Committee in May. The bill includes provisions that set payments at the same rate across care settings for physician-administered drugs in Medicare.

"I think the thing that it signifies is kind of the unity between committees in wanting to push something forward," Wofford said. “The PATIENT Act did pass unanimously, and then the fair billing provisions passed by Education & Workforce also passed unanimously. And there's a lot of committee unity around this issue, especially since jurisdictional lines get so messy in the House. So it's actually really great to see that there's this kind of kind of unity.”

Hospitals across the country are increasingly acquiring physician practices and converting them into hospital outpatient departments, Wofford said, and alleged that their goal is to gain higher reimbursement in Medicare. Hospitals have also been billing for add-on facility fees and have increased prices by an average of 14%, according to a May report from Third Way.

But the American Hospital Association says in its comments submitted to the committee that private equity firms are overwhelmingly responsible for the buy-up, not hospitals, and added that hospital acquisition of these providers often helps keep them from going under.

"[T]he reality is that over the past five years, entities like private equity firms and companies linked to commercial insurers, including UnitedHealth Group’s Optum Care and Humana, are responsible for over 75% of physician acquisitions, while hospitals and health systems only account for 6%,” AHA says. “Instead of allowing these services to be lost into the community or creating new health care deserts, hospitals acquire these practices to ensure that the health care services continue to exist and that patients can continue to receive their care from their existing doctors.”

The collective savings from the PATIENT Act’s site-neutral provisions and fair-billing provisions amount to $6 billion in savings over a decade, Third Way says in its memo, though AHA argued that the policies could be extremely harmful to hospitals’ finances.

“Existing site-neutral payment cuts have already had a significantly negative impact on the financial sustainability of hospitals and health systems and have contributed to Medicare’s chronic failure to cover the cost of caring for its beneficiaries,” AHA says.

Licensing, accreditation and other regulatory requirements are significantly more costly than at other sites of care, sometimes ringing in as high as $200 per patient, AHA says, meaning hospitals often lose money when providing certain services.

“This policy would result in a major cut to [hospital outpatient departments] that provide essential drug administration services to patients, including for vulnerable cancer patients, who may require a higher level of care than is available at other care settings,” AHA says. “Site-neutral payment policies fail to account for the fundamental differences between HOPDs and other sites of care.”

Wofford said the continuity between Ways & Means and Energy & Commerce indicates lawmakers are in alignment on their end goal for the new oversight, but also added that Sens. Mike Braun (R-IN) and Maggie Hassan’s (D-NH) Site-based Invoicing and Transparency Enhancement (SITE) Act is more extensive than the current House provisions, and would require fair billing in both Medicare and the private market on top of provisions to expand Medicare’s site-neutrality requirements.

“I think the best-case scenario would be for the Senate to pass what the House does through an eventual omnibus package if that ends up happening -- that's the way No Surprises Act ended up being passed,” Wofford said. “But, I mean, we're seeing through the Braun-Hassan bill -- the SITE Act in Senate -- and then also what Sanders and Marshall and probably Cassidy will be working on together in HELP, there seems to be the same level of support, even though it might be a little less vocal... But it's definitely great to see that the bills that are coming out of the Senate are kind of the most ambitious versions of the policy, and I think that definitely is a shift in the Overton window of what is possible.” -- Bridget Early (bearly@iwpnews.com)