H.R.5378, the Lower Costs, More Transparency Act passed the U.S. House of Representatives by 320 to 71 on December 11th, a huge bipartisan vote unusual in today's politics. It has since been bottled up in the U.S. Senate.
This bill requires health care providers and insurers disclose more information about health care costs, and requires Medicare and Medicaid payments which do not favor hospitals over small physician practices. The bill also requires pass-through pricing models and prohibits spread-pricing for payment arrangements with PBMs under Medicaid. It further requires Medicare payments for many drug administrations at off-campus hospital outpatient departments be the same as those for other providers (such as physicians' offices).
Dr. Matthew Ray Hitchcock, a family practitioner in Chattanooga, Tennessee favors this legislation:
It's Time To Fix America's Two-Tiered Health Care Reimbursement System | Opinion
By Dr. Matthew Ray Hitchcock - June 20, 2024Physicians may have earned a reputation as "front-line workers" in the fight against COVID-19, but in reality, hospital administrators, insurance executives, and, increasingly, Wall Street firms are at the front of the line when it comes to setting public policy. There is no other way to explain the inequality at the heart of Medicare and Medicaid, systems that pay corporate-backed doctors at a higher rate than those in private practice.
Two physicians can perform the same service in the same medical center building, but reimbursements are determined by the logo on the lab coat rather than the care delivered to the patient. Outpatient hospital centers charge an average of 60 percent more than private practices for identical care because of the two-tiered approach to payments. I have witnessed the profound impact of these disparities first hand. In my direct primary care practice in Chattanooga, Tennessee, I offer minor surgical procedures in my office—a cost-effective and convenient alternative for my patients. Yet these same procedures, when performed in a hospital setting, come with inflated costs that burden both the patient and the health care system. Site neutrality would ensure that doctors are paid for the service performed, rather than the sign on the door or the letterhead on the bill.
Among the most damning and common complaints against our health care system is the impersonal nature of care in the U.S., which too often reduces patients to bed occupants or claim numbers. It is little wonder that public health officials have noticed a trust gap in patient perceptions, with only 12 percent of Americans saying they believe health care is handled "extremely" or "very well." The transactional and impersonal nature of our care stems from hospital consolidations that arose in the absence of site neutrality.
Direct primary care was designed to answer the crisis of discontent. Patients in our practices pay a fixed monthly fee to access general care without having to wait weeks for an appointment. They can contact their physician directly for advice over the phone or text message without having to go through robotic menu prompts or faraway call centers. They have access to a doctor who knows the names of their family members and the unique health situations and needs of each one.
One would think reinvigorating personal connection, mutual trust, and accountability within the health care system would be a top priority for policymakers. But the incentives created by the federal government overwhelmingly favor entrenched interests at the expense of patients and physicians alike. The outsized taxpayer-funded payments handed over to hospital affiliates give them the means to buy out their competitors and swallow up private practices.
A single hospital system dominates the health care market in 70 percent of American cities and surrounding metro areas. The residents of those cities are at the mercy of distant administrators and investors, who often take advantage of their monopolistic power to increase prices. The number of such regions will continue to grow unless lawmakers take action to curb the decades-long descent into monopolistic mergers and acquisitions.
Fortunately, the House of Representatives did just that when it passed a major bipartisan reform package aimed at restoring fairness and transparency to our health care system through honest billing approaches and site-neutral reimbursements. The Senate and President Joe Biden can deliver a strong signal to patients and physicians that even in a bitter election year, Washington, D.C. can still come together to achieve bipartisan reform. Such a development would bring physicians back to the front of the line in American health care and the patient to the center of their focus—where they rightfully belong.
Paragon Institute weighs in on site-neutral payments with panel discussions featuring heavy hitters from multiple perspectives: American Economic Institute, Brookings Institution, and Center for American Progress, as well as former HHS Secretaries Azar and Sebilius.
The event took place July 29, and was recorded by CSPAN. 45 minutes.
https://paragoninstitute.org/event/medicare-site-neutral-payments-a-commonsense-bipartisan-reform/
Site Neutrality means equal payments for equivalent health care services regardless of the setting in which they are furnished. Medicare typically pays more for a medical treatment delivered at a hospital outpatient department than it does when it is delivered in a doctor’s office. One negative consequence of this disparity: hospitals often acquire physician practices to raise prices without increasing the quality of service. Enacting site-neutral payment policies is a crucial step to reduce health care costs for patients and taxpayers. While the Obama and Trump administrations both supported site neutrality, more work remains to end excessive payments to hospitals, save money for hard-working Americans, and reduce incentives for harmful consolidation.
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