Blues to press Congress to expand site-neutral payment reforms to more outpatient clinics

A top insurance lobbying group plans to press Congress this session to adopt legislation that expands the footprint of site-neutral payment reform, setting up a likely clash with hospital groups. 

The Blue Cross Blue Shield Association (BCBSA), which represents 38 Blues plans, released several policy priorities for the current Congress as part of a new report Tuesday. Some of the policies focus on changing Medicare reimbursement rates to pay the same amount to clinics whether they are independent or affiliated with a hospital. Other reforms focus on prescription drugs and spurring more participation in value-based care. 

“We’re very concerned about the increasing acquisition of physician practices by hospitals in the healthcare system,” said Kris Haltmeyer, vice president of policy analysis for BCBSA, during a reporter briefing Tuesday. 

One of the association’s major priorities is to pass a bill that would remove a grandfathering provision in the 2015 Balanced Budget Act. The provision shielded certain hospital outpatient departments from billing limits established in the law, with the exception of emergency departments. 

The association also wants to require off-campus hospital sites to get a different national provider identifier than the main facility campus. They should also use a different claim form for any professional service rendered in an office or clinic owned by a hospital but not on the campus. 

BCBSA officials said the goal behind these reforms is to get a better sense of the difference in pay rates between hospital-affiliated and independent clinics. 

“Oftentimes, when an off-campus provider is acquired by a hospital, they change the billing form,” Haltmeyer said.

The group also hopes to ban anti-competitive tactics in hospital contracts such as anti-steering provisions. The Federal Trade Commission (FTC) should have the ability to sue to block mergers among nonprofit healthcare providers, the paper added.

“Currently, the FTC has authority to review and regulate anti-competitive behavior among nonprofit healthcare providers by amending the Federal Trade Commission Act,” the affordability report said. 

An estimate provided by the consulting firm Ellis Health Policy shows the site-neutral payment reforms would generate $231 billion in savings over the next decade. A 2020 estimate from the Congressional Budget Office also projected $141 billion in savings from 2021 through 2030. 

The analysis from Ellis sought to analyze the effect of site-neutral payment changes on private insurers. Since private plans generally rely on Medicare’s payment system, any change by Medicare could have a similar effect on private sector prices, the analysis said. 

BCBSA officials said they were not looking to push for applying such reforms to the private sector in a bid to preserve bipartisan support, especially in a divided Congress where Republicans just took over the House. 

“We were really thoughtful about finding the right balance and yet scoring significant savings,” said Kim Keck, BCBSA’s president and CEO. “This is a reasonable place to get real support.”

Any push in Congress to expand site-neutral payment reform, even policies just focused on Medicare, will likely trigger a clash with hospital advocacy groups that have fervently fought similar measures in court. 

The American Hospital Association (AHA) has argued that the outpatient departments need higher rates because they are beholden to greater regulatory standards than free-standing clinics. 

During the Trump administration, the Centers for Medicare & Medicaid Services adopted a cut in Medicare rates to hospital-affiliated clinics in a bid to bring payments in line with free-standing ones. The American Hospital Association and other groups sued in 2018 to fight the policy. 

An appellate court sided with the federal government that the cuts were lawful. In 2021, the Supreme Court declined to take up an appeal from the groups.

The AHA told Fierce Healthcare in a statement that it continues to oppose such cuts, noting they would be devastating particularly to rural and other facilities. 

Expanding such cuts to all outpatient departments "would endanger the critical role that hospital-based outpatient departments play in their communities," said Roslyne Schulman, the association's director of outpatient payment policy.

BCBSA officials said they didn’t look into how hospitals would react to the policies.

“We think its sound policy and we think it’s supported by both sides of the aisle,” said David Merritt, senior vice president of policy and advocacy for BCBSA.