February 19, 2016

ACR Cosigns Coalition Letter Opposing Site Neutral Payment Policy

The American College of Radiology (ACR), in conjunction with the Access to Medical Imaging Coalition (AMIC), sent a detailed letter Feb. 19 to the House Energy and Commerce Committee opposing potential efforts to apply a site-neutral payment policy to hospital outpatient departments and physician offices.

The ACR is a founding member of AMIC, a collection of prominent imaging manufacturers, national medical specialty organizations and patient advocacy groups committed to ensuring advanced imaging services are properly reimbursed and accessible to Medicare patients.

Over the past two years, key health care committees in the House of Representatives have thoroughly explored different types of site-neutral payment policies, especially lowering reimbursement rates for the Hospital Outpatient Prospective Payment System (HOPPS) down to the level given to physicians through the Medicare Physician Fee Schedule (MPFS). The HOPPS represents Medicare’s system of reimbursement for hospital outpatient departments, while the MPFS reimburses physicians for services provided to patients in a physician’s office.

Other popular site-neutral payment policies under consideration by Congress largely affect the post-acute care setting or evaluation and management services delivered by primary care physicians. Equalizing payments between hospital outpatient departments and physician offices represents the biggest threat to imaging because this form of site neutral payments would result in substantial reimbursement cuts for radiologists and other hospital-based physicians.

Both the House Ways and Means and Energy and Commerce committees have convened hearings to explore all forms of site neutral payments. Experts from the Medicare Payment Advisory Commission, Government Accountability Office, American Hospital Association, American Medical Association, and various Washington, DC-based think tanks have offered written and oral testimony regarding the benefits and drawbacks of equalizing payments for various health care settings.

Despite many attempts to better understand the concept, site-neutral payments remain controversial within Congress. As a result, the House Energy and Commerce Committee distributed a letter Feb. 5 requesting additional feedback from key stakeholders regarding the merits and pitfalls of these policies.

To date, the Energy and Commerce Committee has not introduced an official bill, but the decision to collect feedback from the health care community is most likely the first step in a larger process for developing comprehensive site neutral legislation.
The release of this letter also comes on the heels of Congress enacting the Bipartisan Budget Act (BBA) of 2015, which mandates that “off-campus” hospital outpatient departments constructed after Nov. 15, 2015, must be reimbursed at the lower MPFS rates rather than the traditional HOPPS level. Off-campus hospital outpatient departments are defined as facilities located more than 250 yards from the main hospital building. Off-campus outpatient departments in operation prior to passage of the BBA are not affected by this change in reimbursement.

The AMIC letter outlined various key reasons for Congress to avoid site neutral payment policies, including the fact that existing MPFS reimbursement rates for imaging are far too low, the two fee schedules are inherently different and more data is needed to adequately assess if equalizing payment rates for services delivered in either the hospital outpatient department or physician office will adequately cover the cost of delivering patient care.

Foremost, the letter highlights how imaging services are already subjected to a form of site neutral payments due to the passage of the Deficit Reduction Act of 2006 (DRA). The DRA mandates that the technical component for advanced imaging services must be reimbursed at the lesser of the MPFS and HOPPS rates. As a result, AMIC argues that the Energy and Commerce Committee should exempt advanced imaging services from any forthcoming site-neutral payment policy.

The letter also urges lawmakers not to pursue site-neutral payment policies due to inherent differences in patient acuity, capacity and capital infrastructure costs that differentiate the MPFS from HOPPS. AMIC’s letter points out that HOPPS reimbursement is typically higher than the MPFS because of unique requirements placed upon hospital outpatient departments. Patients who visit a hospital outpatient department are typically more severely ill or injured than patients treated in a physician office setting. Hospital outpatient departments can require more capital expenditures to provide an appropriate level of care. In addition, hospital outpatient departments must be capable of providing emergency, 24-hour coverage and are subjected to relatively more stringent building codes and accreditation standards leading to higher costs than services provided in a physician office setting.

Finally, the letter urges the Energy and Commerce Committee to acknowledge that more data analysis is needed before a comprehensive, retrospective site-neutral payment policy would be ready for implementation. These data analyses are crucial to ensuring that equal payments across different care settings are still capable of properly reimbursing providers for the associated costs of delivering health care to patients.

ACR members are encouraged to monitor the Advocacy in Action e-newsletter for additional information on site neutral payment policies.