AHLA's Speaking of Health Law
AHLA's Speaking of Health Law
Site-Neutral Payment Policy Considerations in Health Care Transactions
Caroline Reignley, Partner, McDermott Will & Emery LLP, and Travis Lloyd, Member, Bass Berry & Sims PLC, discuss site-neutral payment policy, an issue that is top of mind for many hospitals and health systems given the shifting legal landscape and congressional interest. They cover the history of site-neutral payments; issues related to relocation, expansion of services, claims edits, freestanding emergency departments, and clinic visits; and recent legislative proposals. Travis and Caroline spoke about this topic at AHLA’s 2024 Health Care Transactions in Nashville, TN.
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Speaker 2:This episode of A HLA speaking of health law is brought to you by A HLA members and donors like you. For more information, visit american health law.org.
Speaker 3:Hi, I am Caroline Rainy . I'm a partner at McDermot Wall and Emery in the Washington DC office. I am a healthcare regulatory attorney specializing in Medicare and Medicaid reimbursement and fraud abuse. Um, my practice is split between regulatory advising, transactional work, and then litigation support. Um, and with me today is Travis Lloyd, who I recently presented with at the A HLA Transactions Conference on site Neutral Payment. So, Travis, what did you introduce yourself and maybe talk about what site neutral payment even means?
Speaker 4:Yeah, absolutely. I'm Travis Lloyd. I'm a partner at Baspar Sims in Nashville. Like you, Caroline, also split my time between fraud and abuse work and reimbursement work , um, and pleased to talk a little bit about site neutral payment policy. Um, so just as a starting point, when we're talking about site neutral payment policy, we're talking about efforts to equalize payment for the same services across settings of care to pay the same amount for a service regardless of whether it's rendered in a hospital department, a physician office, or somewhere else. Um, site neutral payment policies show up in a wide variety of settings, and they vary from payer to payer, but I think we wanted to spend some time today talking in particular about Medicare payment policy as it applies to hospitals. Um, one thing maybe to note at the outset is the relationship between site neutral payment and provider based status. Site neutral pay is not a provider based status issue, but to understand site neutral payment policy, you have to understand provider based status . Provider based status is the , uh, in general the, the refers to the relationship between a main provider and facilities that are administratively integrated with and operated as parts of the main provider. It's a concept that has existed since the beginning of the Medicare program, and it was sort of brought into its modern form about 25 years ago with the creation of the outpatient prospective payment system. It's a , it's a Medicare payment concept. Um, it does have implications for not just payment, but also coverage and compliance. Um, and I would just note we're , we won't go into any detail about provider based status except for making the point that , um, the rules vary depending on where the provider based department is located and what services are furnished. You have to distinguish between on and off campus provider based locations. Um, in general, a a department is on campus , if it's located within 250 yards of the hospital's main buildings. Um, if it's not on campus, then it's off campus . Um, and off campus , uh, departments generally must be located within 35 miles of the hospital. Again, that there are exceptions to that, but that's the, that's the general rule. Um, so site neutral payment policies can take a lot of different forms, but , um, but the issue has sort of come to the attention of , uh, policy makers and watchdogs , um, because of the, the payment differences that can result depending on, on whether a payment , uh, whether a service is provided in a hospital setting or not. Um, this has drawn attention from a lot of different stakeholders, including MedPAC and OIG. Um, there, there have been a lot of , uh, questions over the years raised about this, about the legitimacy of the payment difference, and that's what ultimately prompted sort of the most significant legislative action that gives us sort of the, the, the Medicare rules that we're, we're going to be talking about today. So Caroline, do you want to talk a bit about, about those , uh, about that piece of legislation? Sure ,
Speaker 3:Of course. Yeah, and I think, yeah, I mean, you're right. I think there's just been a lot of , um, there was a lot of press and there has continued to be press that focuses on this concept of a hospital acquiring a physician office and transitioning it to a provider based department. And then all of a sudden the same services that were furnished in , um, a physician office setting are much more expensive for the patient when they're furnished in a hospital setting. And I think a lot of that press was, was very negative to hospitals , um, and sort of helped create some of the momentum that led to the bipartisan Budget Act of 2015. Um, it's section 6 0 3 specifically that took the first real steps towards implementing site neutral payment policies, but at the same time was relatively narrowly focused on off-campus provider based departments, which I , I think is why Travis, you're going through all the provider based stuff, which I think people get a little confused about why we start talking about provider based at the beginning. Um, but basically off campus provider based departments that are established prior to November 2nd, 2015, are considered accepted from site neutral payment policies. But af so if you new off campus provider based departments that are established after that date, they are going to be subject to a, a site neutral payment policy methodology. Um, and the reason that, you know, there was obviously the patient protection aspect of this, but there was also the significant cost savings that this , um, had the potential to provide to Congress, which is obviously something that's always of interest. So at the time, they were estimating it was gonna save 9.3 billion over a 10 year period. And, and I think that , um, that is why I think we, we expect to continue to see more , um, shifts towards site neutral payment policy in the future. Um, so after section 6 0 3 was passed in 2015, the 20 C 21st Century Cures Act came back and implemented some limited exceptions for facilities who are bid billed . When section 6 0 3 was passed, there was also a pretty , um, generous carve out for PPS exempt cancer hospitals who are still permitted to establish off campus provider-based departments that aren't subject to site neutral payment policy. Um, but at the end of the day, a non accepted right established after 2015 off-campus provider based department is gonna receive approximately 40% of the O-P-P-P-S payment rates for those services. So what that means is that, you know, if you're establishing a new off-campus provider based department, you're gonna wanna be cognizant of the fact that you're not gonna get the same reimbursement rates from Medicare fee for service as you would for your existing off-campus provider based departments. Um, just a quick note about change of ownerships and sort of changes in locations , um, because I think this comes really relevant, but accepted status of an off-campus department can be transferred to new ownership only if ownership of the hospital, like the entire hospital is also transferred to a new owner. And then the Medicare provider agreement has to be accepted by the new owner. So it's not like you can sell one off campus , um, provide a race department to another hospital and then maintain that accepted status. It's just not the way , um, Medicare enrollment or , um, change of ownership works. So I think that's probably a , a high level overview, and now we'll hopefully get into the more conversational part. Um, so I think I've already started talking about relocation, but um, you know, if you're moving, this is something I see a lot is hospitals that are moving their provider-based departments around within the hospital. Um, I think, you know, service mixes change, new service lines are added, you wanna reorganize your service lines so they're in a more , um, you know , uh, logical geographic orientation. Well , if you're relocating , um, an on-campus provider based department to a new off-campus location, that provider based department is gonna lose. Its, its accepted status. So I think this is a , an area where operations and legal and compliance need to be very closely , um, coordinated with reimbursement <laugh> because there is this possibility of, you know, losing your accepted status based on the move of , uh, uh, a provider based department.
Speaker 4:Yeah, no , that's a great point, Caroline. Um, I think there's kind of an sometimes folks don't really appreciate the, the fact that , um, you know, ta you can, that taking an existing on-campus site and moving it off campus , moving it to the off-campus setting, even if it is providing the same services , um, would be regarded as the creation of a new off-campus, outpatient department under section 6 0 3 and would not be accepted or grandfathered. So it would be subject to that 40% of OPPS rate , um, yeah,
Speaker 3:Concept . What about expansion of services, Travis? I know that's something that you've, you've dealt with a lot where you've got one provider based department that's , um, sort of dramatically expanding the services furnished in that location.
Speaker 4:It's a great question, and there's sort of a nuanced answer. Um, so CMS has twice proposed but declined to finalize this policy that would limit the sort of grandfathered payment, if you will, to the services that were being provided in the department prior to November 2nd, 2015, which is the date that the Bipartisan Budget Act was, was enacted, was signed into law. Um, again, that they have CMS has proposed to do that they believe they ha they have stated that they believe they have authority to make that change, but they have ultimately not finalized that policy. So it is not the case that an accepted department is limited to the services that , um, that it provided as of the, the date that the statute , uh, came into existence. Um, there are, I think , what about <laugh> ? Yeah , well , I was What
Speaker 3:About Loper Bright ? I was about to say that that seems like a , a broad interpretation by CMS if you ask me.
Speaker 4:Well, yeah, and, and again, it's not, it's not been the case that they , that CMS has , um, like for a third time proposed this , um, I think in the wake of, of Loper Bright , I would be surprised at this point , um, to see , uh, you know, CMS propose it again and , um, again, sort of double down , triple down on the concept that it has statutory authority , um, in this case to, to make that change. I do think that there are , um, I I , I do think it's really important to note here though, that even though there isn't some express limitation on the services that may be provided in an accepted department, I do think you have to consider whether a major change in the service mix might call into question whether the department is in fact the same quote unquote department that was accepted department , um, is defined in the provider based regulations , um, as more than just the space. It's the, it's not just the space, but also the personnel and the equipment needed to deliver the services. It , it , it, it is, in other words , um, sort of a, a broader concept. So I think if you have a wholesale change in the services provided, say you're taking a , an accepted imaging department and converting it to a wound care department, I do think you have to pause and ask whether that is in fact the same department that was accepted or grandfathered. Um, it's, it's easy enough to, I think, do that analysis at the ends of the spectrum. So a wholesale change, it's probably not the same department. You're probably running the risk of jeopardizing your acceptance status. A tiny incremental change, like adding a new imaging modality to your accepted imaging department wouldn't seem to be an issue at all. The hard part, of course, is what is the middle <laugh>? Um , yeah.
Speaker 3:And in my view, that comes down to a lot of the details. Um, you know, how, how are , like , what does the space look like? How is it reported on the Medicare enrollment form? Mm-Hmm . <affirmative> , you know, I think that the facts and the circumstances really are gonna drive the analysis there, but it's definitely something that's good for a legal team and compliance team to make their operators aware of, because I don't know that a lot of operators have familiarity with the nuances of this and, and can inadvertently get themselves in trouble if they're making wholesale changes.
Speaker 4:Yeah, great point. And good reference too to the enrollment process. Um, you know, the , the site neutral payment regs , um, and creating those CMS noted that it looks specifically to the enrollment form when, when determining where a , um, a department is located. Um, and I think there, there is in general a lot of , uh, that there's a lot of emphasis on how that enrollment paperwork is filled out. Um, or there are, I should say, implications for, for payment , um, based on how that is, how that's handled, and, and enrollment , uh, paperwork is not always given the same priority as , um, other strategic initiatives of hospitals. So , um,
Speaker 3:Is this a good time to talk about the claims edits , Travis?
Speaker 4:Oh, sure. Yeah. <laugh> , I don't , I'm not sure if anyone listening really wants to hear about the claims that it <laugh> , but , um, there is a sort of , uh, a sort of adjacent issue here that's been , um, pretty vexing over the past year or so , um, almost a year or so , um, for many hospitals. So in, in 2017, CMS first announced the this claims edit process that would reject claims for hospital outpatient services, where the, the service location address that is on the claim does not match exactly the practice location address listed on the enrollment form. And I mean, exactly. So if, if one says RD period and the other says road , um, you, you, that claim would be returned to the provider. Um, for many years, these claims edits were not implemented. Um, the, the COVID-19 public health emergency , um, further delay that, but starting August 1st, 2023 , um, the claims edits took effect , um, and caused a lot of problems. Um, I , I think they caused problems, not only that couldn't necessarily be fixed by updating the enrollment paperwork. Uh , you , you know, you might get a return claim and think, okay, I get the concept the claim needs to match the enrollment paperwork. I'm gonna file a change of information or update my Pecos record to make sure that that's the case, that , um, would resolve the issue in many cases. But in some cases, I think Caroline, we both found, we both had clients wrestle with issues that were more on the back end of the claims processing system, the, the fifth or the, the fiscal intermediary shared system , um, that was sort of beyond the control of the provider, basically. That was sort of ,
Speaker 3:Or, or the Mac
Speaker 4:<laugh> or the Mac, right ? Yeah, that's right. That's right. Um, you had to go all the way to Baltimore to attempt to fix that. Um, yeah. And, and that's been an issue for a number of sites, including remote locations , um, and dedicated emergency departments, other facilities that are not subject to these site neutral payment rules that we're talking about. Um, I don't know, Caroline, maybe that's a good point to, to bring up. What about freestanding eds? Um, what , what is their status here? What are they, how , how do these rules apply at all , um, to those facilities?
Speaker 3:Yeah, I think during that claims edit process, we were, we were dealing with both cancer hospital and off campus emergency departments. Um, you know, I think some of the Medicare enrollment guidance wasn't necessarily as clear as it could have been when you, when you go to update the picos , um, eight five A for hospitals to specify sort of what type of location you're actually dealing with. Um, and that became critical when it came to those claims edits. So , um, with respect to dedicated emergency departments , um, you know, dedicated emergency departments are not subject to the site neutral payment policy implemented by section 6 0 3. Um, rather, you know, all services that are furnished in a dedicated emergency department, whether they are emergency services or not, are exempt from the site neutral payment policy and are paid under the OPPS at the standard rate. Um, and off-campus departments qualify as an a dedicated emergency department. If you, you meet the definitions at fourth and Tala, so it's sort of cross-referencing back to Tala. Um, I will say that this is something where I think CMS and MedPAC have been interested in monitoring the growth of services that are furnished in off-campus eds. Because I mean, the , the concern, right, is that you could establish a, a very large off-campus , um, emergency department that also has associated outpatient services and, you know, you just bill it using the same address and then it's, it's a loophole that could get you potentially around the , um, the site neutral payment policy for new off-campus departments. Um, with that, you know, hospitals have been required since January, 2019 to use a modifier for each claim for services that are, that's furnished for , um, in an off-campus provider-based, freestanding or department. So , um, that is, you know, monitoring is usually the first step to implementing changes because what CMS cannot monitor and quantify, they, they generally aren't gonna be changing po um , payment policies. You know, I think their authority to implement limitations on that may have, you know, it may not have quite the same authority as they they used to. Um, now with low bright , so, we'll, it'll be interesting to see whether , um, there are any statutory changes that would maybe impact , um, dedicated emergency departments. But I know that also is an area where CMS is concerned about access to care.
Speaker 4:Yeah. And, and maybe on that point , uh, I think you make a, a good point about CM S'S continued concern or, or skepticism I suppose. Um, but if you're a hospital and you're wanting to develop, develop a new site that has a provider-based freestanding ed , um, and yes, that is the correct way to use that phrase, <laugh> odd as it may seem, <laugh> , um, a that is a hospital based , a part of the hospital freestanding emergency department. If you want to build something like that and you want to include in that space , um, some sort of hospital outpatient services that are not specifically intended to be used or primarily used or , um, that are not strictly for the use of emergency department patients. I think because , you know, again, the , the rule as you said, Caroline, is that all services furnished in a dedicated emergency department are exempt from the rules , um, and from the site neutral payment rules. So one would think that that concept would apply to the, those sort of adjacent, or I won't call them adjacent, 'cause that implies a separation, those, those sort of other non-emergency services that are part of the department. Um, I guess I would just say if, if, if you're a hospital that's considering development along those lines, this is probably the sort of situation where you would want to engage on the front end with the Mac, with the regional office , um, be clear about your development plans , um, and attempt to have some sort of dialogue , um, just to, to make sure that your assumptions ultimately about payment are , um, you know , are , are , are sort of realized.
Speaker 3:Yeah. I think one other thing I'd flag there is that if you have a remote location, and a remote location is a , a very defined term in Medicare enrollment and provider based world , um, that furnishes inpatient hospital services, so a separate physical location that is off campus that is providing both inpatient and outpatient hospital services , um, remote locations aren't subject to site neutral methodologies either. So you could be, you know, it's, it's a position where you want lawyers to be involved in the development discussions early on because there may be a way to think about some of these factors and, you know, maybe you don't do just an emergency department, maybe you do an emergency department with outpatient services and some inpatient services Mm-Hmm . <affirmative> that are actually furnished at a remote location. Now, obviously that has a lot of other considerations for the hospital, including development costs, like licensure, building code requirements. There's a lot that comes along with that. Um, but these decisions have very real implications for the payment , um, methodologies that are gonna be used for the services furnished at that location.
Speaker 4:Sure. And it's worth to consider if that's what you're doing, building a remote location, IEA site with inpatient hospital services, among other things that you do have sort of a 250 yard halo around that , um, within it maybe . Correct . So it's a , it's a, it's a complicated decision , um, and uh, it , but it , I agree that it's the kind of thing where you, you need good counsel on the front end to really appreciate the , these nuances. Well, yeah,
Speaker 3:And Travis, just to explain that point that I think you and I both got immediately, but if you establish a new remote location that is not subject to site neutral payment policies, you then have a new campus that can then have a 250 yard halo to allow you to build new off campus , new provider based departments within 250 yards at that remote location, which would then be on campus provider based departments and wouldn't be subject to site neutral payment method methods. So
Speaker 4:Yeah, that's right. Uh , I will say though, sometimes I have heard , um, some folks sort of talk about daisy chaining , um, yeah. Accepted departments , um, sort of , if you have one, if you have an on-campus department , um, and you have another, you know, site that is within 250 yards of that location, but is not within 250 yards of the hospital's main buildings, can that second location be considered, you know, to be , um, accepted for these purposes? Um, if it's, if it's new , um, and I , the answer is no <laugh> correct, flatly no . Yes . But , but there is some, there is some chatter out there, there along those lines. And these are hard questions, but there is a distinction between what you just described, Caroline, that in the creation of remote location and just the, the existence of a , uh, a regular old outpatient hospital department. Yes, totally agree. Um, well, one other thing maybe to to mention briefly , um, that's sort of in the spirit of changing tides. Um, and also something where LOPA is relevant , um, is the fact that CMS changed , um, sort of revised its payment policy with the 2019 OPPS rulemaking , um, such that clinic visits that is sort of the facility fee go 4 63 that accompanies e and m services that are provided in accepted or grandfathered off campus departments, would notwithstanding that fact be paid at the same rate as if they were as, when they were rendered in non grandfathered or non accepted off-campus departments. Um, this was a, a regulatory change , um, again, made in late 2019. Um, the American Hospital Association and others filed a lawsuit in response challenging CM S'S authority to make this change. Uh, they ultimately lost in , uh, DC I think there was a , a dc uh , circuit , um, court of appeals decision in 2020 that , um, that essentially upheld CMSs , uh, uh, decision in this case. Um, I will say , so that is the, that is the policy right now. There is no , um, uh, sort of, regardless of whether a clinic visit occurs in an accepted or a non accepted off-campus department, the payment will be the same. There is one small exception to that for rural sole community hospitals in the 2023 OPPS rulemaking, CMS revised the policy to, to throw a bone to rural sole community hospitals. Um, that is just a, that just applies with respect to the clinic visit , um, not with respect to other services, but if you're in one of those hospitals, then you, if for a clinic visit furnished in an off-campus accepted off-campus department, it would be paid the full OPPS amount, not the reduced amount. Um, I think one thing, I , I do think this, that litigation , um, that the, that the A HA , um, led , um, and that ultimately resulted in upholding CM S'S decision was a , a decision where I , I think the court relied expressly on Chevron , um, to defer to CM S'S reasonable interpretation of an ambiguous statutory provision on this point. Um, you know , bright did not, you know , uh, did , doesn't have sort of retroactive, doesn't undo that <laugh> , um, per se. But if the same case were to come up , um, now it would, it , the outcome could be the same, but the process through which the court went through the reasoning would, would not be the same. Um, so that's, that's a concept to sort of bear in mind. And I think there are, there are a lot of similar concepts , um, with respect to site neutral payment policy , um, where you have to , um, I think at this point ask whether , um, you know, whether C cm S'S interpretation would , um, would withstand scrutiny of ,
Speaker 3:Yeah, I mean, I think at the end of the day, payment for providers under the statutory Medicare payment schemes, you know, generally requires legislation regardless. Um, and I think there has been a , a pretty good amount of discretion that CMS has had to de design the payment methodologies within the guardrails set forth in statute. And it is gonna be interesting to see just how, you know, litigious providers are going to be in challenging , um, payment methodologies if, you know, Congress does not provide significant detail in the statute about how exactly those payment methodologies should be implemented. Um, so I'm interested to see what happens.
Speaker 4:Yeah, no, for sure. And I mean, 6 0 3 itself, the legislation does not include sort of an express authorization to CMS to , uh, kind of fill up the details or add on , um, sort of additional requirements. So I do think there are, when you think about some of the judgements that CMS has made or some of the additional , um, but just the interpretations that CMS has made of the statute , um, in its rulemaking thus far, I do think there's , uh, there's, you know, there's reason to sort of reconsider that , um, at this point. Um, and to the point that I think you're making Caroline , uh, it's also the case that that's going to affect the way future legislation looks, <laugh>. Yes,
Speaker 3:Yes, it definitely will <laugh> . Um, what are we seeing any recent legislative proposals on the site neutral payment policy front that we should be concerned about?
Speaker 4:Yes. Um, so just, you know, I think over the past year we've seen a few , um, proposals in Congress that , um, have been squarely focused on these issues. Um, in April of 2023, the House Energy and Commerce Committee had a, a bipartisan subcommittee hearing , um, that included among other things, a major focus on site neutral payment issues. Um, there were, I think there were several pieces, several discussion drafts of bills with site neutral payment changes that, that were discussed at that hearing. Um, I , I , I think there , they, they targeted these issues in a few different ways. Um, there , there was a bill that was focused on just drug administration , um, sort of a narrow site neutral payment policy that legislators were considering. Um, and that that would simply be that Medicare would pay the same amount for the administration of drugs, not the drugs themselves, but just the administration of them , um, regardless of whether that occurred in the hospital or in a freestanding setting. So think of chemotherapy, the administration of chemotherapy , um, regardless of whether it was in an accepted , uh, outpatient infusion clinic or in an independent oncology office practice, would be paid by Medicare at the same rate. Um, there were a few other , uh, proposals that would go even further , um, that would simply , uh, equalize payment for all off-campus physician offices , um, regardless of whether they were accepted under section 6 0 3. Um, and you know, there, there were, there , there, there's sort of a, there's also a home run version that would simply , um, simply do away with section this simply do away with grandfathered payment status altogether. Um, and off campus departments would be just paid under the physician fee schedule without any kind of , um, any kind of adjustment. Yeah.
Speaker 3:And I think that legislation, I mean, the a HA estimated that that would've be a $34.3 billion cut to hospitals. So , you know, these are dramatic proposals that we we're seeing <laugh> . Right. Um , but I also think that the cost savings are, are part of why this continues to be on the agenda because with, you know, you know, yeah , <inaudible> are always looking for cost savings.
Speaker 4:Yeah. I mean, there , there's a lot of money tied up in this , um, and it sounds on its face like a sort of bipartisan winner, you know, okay, we're just reducing, we, we pay a different amount for the same service provided in two different locations. Why would we do that? Um, but I think what that, what that position kind of fails to consider are the, you know, are , are the services really equivalent, first of all when they're provided in a hospital or not? And what about all of the other stuff that a hospital has to do that it's in some cases legally required to do. Um, you know, there , you know, there's sort of, there , there , uh, certainly two sides to this debate. Um, and it's, it's an ongoing one for sure. Yeah,
Speaker 3:For sure. And I think there's one other thing that I wanna mention that sort of comes from some of my colleagues at McDermott plus who are more on the policy side is that , um, you know, obviously the telehealth statutory authorization is expiring at the end of this year in December 31st, 2024, and extending telehealth coverage , um, and extending some of those temporary policies past , you know, the end of the year is very expensive. And so I think my understanding is that , uh, Congress is looking at things like site neutral payment policies , um, as a pay for, for some of these other priorities that, you know, Congress would like to extend Medicare , um, to Medicare beneficiaries additional telehealth coverage, even though , um, the pandemic has obviously ended. So that is some of the dynamic that I'm hearing is that this is being viewed as a pay for , for telehealth.
Speaker 4:Yeah, no, absolutely. And, and just to put a little finer point on it too , um, I mean the, there , in addition to just this hearing and these discussion drafts, I mean, there, there, there was a bill that passed the house in December of last year , um, part of the lower costs more transparency act , um, and that that bill included , um, it incorporated the drug administration proposal that I mentioned a minute ago , a minute ago. Um, it also included a proposal that would , um, require a unique identifier for every , um, every outpatient department or every off-campus outpatient department. And it would mandate the submission of a provider-based at station for those departments, which would be a massive undertaking to, to say nothing of the financial impact. Um, and that is legislation that passed the house in December by a , by a wide margin, it looked like for a while earlier this year that it would be part of the federal government funding legislation that was passed in March, but it was removed very late in the game. Um, but still that, that proposal is out there and it has substantial support. Um, and like you said, Caroline, as you , um, as you're sort of , uh, effectively scrounging in the couch cushions for spare change , um, this might be <laugh> one place that that legislators go looking.
Speaker 3:Yeah, that's right.
Speaker 4:What about just to, yeah, sorry, I was gonna ask you, Caroline, I mean, is this, we talked about kind of the congressional action, are there other proposals that are out there that would kind of advance these, this site neutral payment policy?
Speaker 3:Yes, there are, and I think people sometimes forget about , um, state level initiatives that , um, are out there. So there are several states, Connecticut, Colorado, Indiana, New York , um, Ohio, Washington that have taken action to prohibit the charging of facility fees for certain outpatient services. Um, and there are other initiatives that are under consideration in Arizona and Massachusetts. Um, a little bit of an overlap with the Medicare provider based re requirements. So off campus provider based departments are required to provide a form to Medicare beneficiaries notifying them that they're receiving services in a hospital department, and that they may be subject to cost sharing obligations because they're, they're receiving services in that setting. So similarly to that requirement that exists on the federal level , um, several states , uh, Connecticut, Colorado, New York have enacted laws that require hospitals to provide notifications regarding the charging of facility fees prior to furnishing services. So rather than just limiting those forms to just Medicare beneficiaries, they're expanding it to all patients to make sure that patients really understand where the , the care setting, where they are receiving the services, and the , um, potential cost sharing implications that that may impose on them . Um, so that's just, those are some of the el the , um, sort of changes and and requirements that may be out there. I think the other thing that I, I just wanna flag because I continue to see it as an issue is that , um, you know, there is overlap between state licensure for hospitals and the provider based requirements. And that is an area where we've seen confusion by state licensure agencies about what exactly is required and frankly, giving , having them give bad advice to hospitals on the state licensure obligations that apply . So if you are , if you are dealing with a, a Medicare provider based department, it has to be licensed as part of the hospital, even where the state may provide flexibility in licensure options. So just something I wanna flag, since we're in the realm of talking about states and provider based .
Speaker 4:Yeah, good point. If it can be, it must be That's correct. Yeah. <laugh> . Yeah. Yeah. Well , lots of targets then to, to monitor when we think about the kind of shifting payment landscape here. <laugh>. Yeah, we're , we're not just , um, one other looking at Capitol Hill. No,
Speaker 3:We're not looking at Capitol Hill. Definitely not. Um, one other thing I wanna mention is MedPAC. So , um, obviously they're the Medicare payment advisory , um, agency, and they have been looking at HODs, ASCs and physician offices to recommend a more holistic approach towards determining where services are most frequently performed and then recommending that the payment rate at , um, be based on the payment rate at the site where the service is most frequently performed. So what this would do is, you know, you've got hospital outpatient departments, ASEs , and then physician offices. So depending on whether it's more often set, performed in a physician office setting as opposed to an outpatient or a SC setting, it would seek to , um, equivalate those payment rates for the services. So , um, MedPAC obviously is pretty influential in terminating sort of recommendations to Congress. So that is a proposal that's out there and, and would loop ASCs into , um, some of these site neutral payment discussions as well. So that could potentially be on the horizon as well.
Speaker 4:I think maybe one point on that, that MedPAC proposal that shouldn't be lost is , um, that, that it , I think Med Pack's recommendation, if I remember correctly , um, is that there, there would be sort of a requirement for budget neutrality. So there would, while their proposal would result in a significant shift , um, for hospitals, ASC, and physician offices , um, it would not be the sort of pay for that. You referred to Caroline, correct? Um , you would correct <laugh> like to Yes . As a hospital lawyer, I would like to continue to remind legislators of that . Um , <laugh> ,
Speaker 3:Yes . Um, I think that MedPAC said that it wasn't gonna reduce spending in the short term because of budget neutrality, but there was the potential to basically use payment methodologies to force providers to furnish services in the setting that is viewed as the most appropriate setting That's right . Or that particular procedure or service to be furnished in. But definitely would be a wholesale shift and, and would be a big change for providers. So, and it does implicate site neutral , so wanted to raise it.
Speaker 4:Yep , absolutely. Well, if you're still listening at this point, I thank you and I'm impressed. Um, <laugh>, we've covered a lot. Any, any parting words? Caroline,
Speaker 3:I have a feeling that we, that you and I will continue talking about this even if it's not on a podcast, because I don't think there that the shift is gonna go away anytime soon. But thanks for nerding out with me over site neutral payment policy.
Speaker 4:<laugh> <laugh> . My pleasure. Thank you all.
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