December 12, 2019

In November, the Centers for Medicare & Medicaid Services (CMS) issued a final rule with comment period for 2020 that will finish phasing-in payment cuts for clinic services provided at off-campus hospital outpatient offices to the applicable rate for physicians, a policy commonly referred to as site-neutral payments. Specifically, the rule transitions reimbursement for clinic services from the hospital outpatient rate (HCPCS code G0463 – hospital outpatient clinic visit for assessment and management of a patient) to the applicable Medicare Physician Fee Schedule (PFS) for a total reduction of up to 60% and a 2020 savings of up to $800 million.

The 2019 rules that originated the site-neutral payments were overturned by a federal district judge in September and CMS is considering filing an appeal.

Payment differences based upon the site-of-service are a problem bred by the inefficient and ineffective fee-for-service payment policies. As CMS transitions away from fee-for-service and towards alternative delivery models, payment policies such as site-neutral payments will not be necessary as delivery systems will steer patients to the most appropriate site of care given the built-in payment incentives.

The Business Group sent comments to CMS supporting efforts to implement site-neutral payments for clinic services and recommended for future rulemaking broadening it to all clinically appropriate outpatient services.

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Policy & Advocacy Low-Cost Care Alternatives