Navigating the Site-Neutral Payment Debate

As policymakers craft site-neutral payment policies, the ACR considers its strategies.GettyImages dv1376023

Medicare and private insurers commonly pay more for a service in the hospital than they do in the office. For instance, a lumbar spine X-ray pays almost five times more in the hospital than the office.

The reasons for cross-site payment differentials are complicated, but can be explained. However, insurers feel that they should receive the best-price available in the marketplace, regardless of site. To that end, government and private payers are pursuing policies to achieve equal payments across sites, referred to as site-neutral payments. Examples include caps for payment rates on outpatient advanced imaging in hospitals1 and Anthem's more recent policy denying payments for outpatient advanced imaging performed in hospitals. The implications for radiology are significant, and are discussed herein.

Radiology is in a challenging position amidst these site-neutral discussions. Community providers may support equalizing payment to the lower Medicare Physician Fee Schedule (MPFS) payment amounts so that hospitals must compete at the same rates as offices. At the same time, hospitals may push to maintain their higher hospital rates, justified by their higher asserted overhead expenses. Whatever short-term solutions are crafted, they will affect radiology services. But these policies and potential remedies will not be rooted in radiology payment policy. In other words, radiology services are at risk of suffering collateral damage, such as decreases in payment or disruptions in patient care. Our job is to evaluate potential consequences and then act on behalf of our profession.

Strategies From the ACR Commission on Economics

1) Acknowledge that cost is important. This is true in both current and future payment models. Purchasers of our services should be offered fair pricing. Patients deserve to see pricing in a transparent manner. Indeed, as future payment models evolve, our members will be held increasingly accountable for cost. It cannot be ignored.

2) Emphasize that cost cannot be the only determinant of patient care. Blunt and across-the-board policies where cost is the primary, or only, determinant of patient care have potential downstream consequences that must be considered. If stakeholders want to address cost, that is fine. But using patients as pawns to achieve that goal is improper.

3) Protect individual payment rates under Medicare. Since we cannot predict which system will become the default payment system, dedicating resources to protecting individual payments within those systems makes sense. Even if a large-scale payment reform takes place, policy updates will be informed by per-unit pricing.

4) Avoid policies that trigger large shifts in resource allocation across sites. Depending on geographic location, either hospitals or clinics may have more robust resources in place. Large and sudden shifts in patient volumes could adversely affect patient access and quality of care.

5) Form alliances. Radiology is not the only profession affected by these discussions. Alliances across medicine and within radiology will be formed. Much of the effort will be at the state and local level, so engagement of our state chapters is important.

6) Advocate for short-term stability in our payment rates. Sizable decreases in payment with little warning make future budgeting and capital expenditures difficult for radiology facilities. But any commitment by policymakers toward short-term stability will, presumably, require a commitment by stakeholders toward a more permanent solution.

7) Recognize that long-term solutions are unclear, and that the best solution may be broader payment-system reform. Understanding the details of potential reform requires a strong base in payment policy. The ACR Commission on Economics has this knowledge and experience.

8) Prioritize patient care; it must come first. Nobody can argue with us when we credibly advocate for high-quality care as the primary motivator in payment-policy decisions.

dr silvaBy Ezequiel Silva III, MD, FACR, Chair

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