“Hospitals are gaming the system to charge Louisiana patients and taxpayers more for out-patient, off-site care. That’s wrong, and I’m proud to work with Sens. Braun and Hassan to make it right by correcting Medicare’s billing policy.”
WASHINGTON – Sens. John Kennedy (R-La.), Mike Braun (R-Ind.) and Maggie Hassan (D-N.H.) introduced a bipartisan bill to fix part of the Medicare billing structure that allows hospital systems to charge high hospital rates for care received at off-campus outpatient facilities.
“Hospitals are gaming the system to charge Louisiana patients and taxpayers more for out-patient, off-site care. That’s wrong, and I’m proud to work with Sens. Braun and Hassan to make it right by correcting Medicare’s billing policy,” said Kennedy.
“Hoosiers know our health care system is broken, and one problem we can fix right now is services at off-campus outpatient facilities being billed to Medicare at higher hospital rates. Fixing this problem will save taxpayers 40 billion over the next decade, and this bill will apply some of those savings to fixing our nursing shortage by creating a new program to pay for training,” Braun said.
“Granite Staters who have been going to the same doctor for years are experiencing sticker shock when a hospital acquires a doctor’s office or clinic and all of a sudden starts charging extra fees for the same services. Our bipartisan bill takes on the health care industry to eliminate unfair fees, lower costs for patients, and save taxpayer dollars—and then we use those savings to invest in the health care workforce. Lowering health care costs for Americans is a bipartisan priority, and I urge my colleagues on both sides of the aisle to support this commonsense bill,” said Hassan.
Due to Medicare’s billing structure, even if care is received at an off-campus outpatient facility, patients can receive bills that treat the care as if it was provided at a main hospital campus. This means the providers are charging patients and Medicare higher “hospital” rates when patients aren’t receiving in-patient care.
The consequences of this artificial price hiking are expanding as hospitals acquire more and more small physician-owned practices and off-campus facilities. In 2020, the Congressional Budget Office estimated that, over the next decade, taxpayers will pay close to $40 billion in excess Medicare costs due to exorbitant facility fee payments.
A provision in the 2015 Bipartisan Budget Act makes these price inflations possible because that law established “site-neutral” payments under Medicare for services received at off-campus outpatient departments, but it exempted most hospitals.
The SITE Act would end the 2015 Bipartisan Budget Act’s site-neutral exceptions. It would also prevent off-campus emergency departments from charging higher rates than on-campus emergency departments when standalone emergency facilities are located in close proximity to a hospital campus.
The bill would require health systems to establish and bill using a unique National Provider Identifier number for every off-campus outpatient department. It would direct the Department of Health and Human Services to treat outpatient departments as subparts of the parent organization and to issue these subparts unique provider identifiers. The SITE Act would also remove liability for services rendered for payers who are not billed in accordance with this section’s requirements.
The bill would use a portion of the overall savings from this fix to help fill the nursing shortage by creating a graduate nursing education program that would provide payments for training costs.
Text of the SITE Act is available here.