Monday, Senators Mike Braun, Maggie Hassan, and John Kennedy will introduce their 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.
Due to Medicare’s billing structure, even if care is received at an off-campus outpatient facility, it can be billed as though the care was provided at the main hospital campus. This means the higher hospital rate is charged.
This issue has become more prevalent as more and more small physician-owned practices and off-campus facilities are acquired by larger hospital systems. In 2020, the Congressional Budget Office estimated that taxpayers will pay close to $40 billion in excess costs to Medicare due to exorbitant facility fee payments over the next decade.
This billing practice is allowed to happen due to a provision in the 2015 Bipartisan Budget Act. This law established “site-neutral” payments under Medicare for services received at off-campus outpatient departments, but exempted most hospitals.
A solution is needed to fix this billing issue and provide more transparency on where care is actually provided and billed.
Senator Braun and Senator Hassan’s Site-based Invoicing and Transparency Enhancement (SITE) Act would end the 2015 Bipartisan Budget Act site neutral exceptions, 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, require that health systems establish and bill using a unique National Provider Identifier number for each and every off-campus outpatient department, direct HHS to treat outpatient departments as subparts of the parent organization and to issue these subparts unique provider identifiers, and remove liability for services rendered for payers that are not billed in accordance with this section’s requirements.
The bill will use the savings from this fix to help fill the nursing shortage, by creating a graduate nursing education program that would provide payments for training costs.
“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,” Senator 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,” Senator Hassan said. “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.”
“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 Senator Kennedy.
“Senator Braun has championed health care reform as a private citizen, a state representative, and as a United States Senator. The SITE Act will, among other provisions, end Obama era exemptions that allow hospitals to inflate costs at off campus facilities that force Hoosiers and all Americans to pay exorbitant costs for health care. Indiana residents pay the 7th highest prices for hospital care in the country. Hoosiers for Affordable Healthcare has led the fight at the state level to lower the cost of hospital care for Hoosiers. The SITE Act is an important step toward fairness for Hoosier healthcare consumers and accountability for large hospital systems in Indiana and across the nation. Hoosiers for Affordable Healthcare proudly endorses the SITE Act and thanks Sen. Braun for his leadership, courage, and willingness to attack the issues that are facing everyday Hoosiers and Main Street America.” — Matt Bell, Hoosiers for Affordable Healthcare
“This bill is important because it removes key drivers of hospital consolidation which leads to unwarranted higher prices.” – Gloria Sachdev, President and CEO, Employers’ Forum of Indiana
“Medicare subsidizes hospital monopolies by paying higher reimbursements to physician practices when they merge with hospitals. Senator Braun and Senator Hassan have introduced a groundbreaking bipartisan proposal to equalize Medicare’s payments between independent and hospital-owned practices. This will drive down the cost of health care, strengthen Medicare’s solvency, and give more Americans a personal option for health care.”- Charlie Katebi, Senior Policy Analyst, Americans for Prosperity
“Moving Medicare towards paying the same amount for the same health care services regardless of care setting is one of the best ways to reduce federal spending while also reducing costs for Medicare beneficiaries. This serious bipartisan reform also attacks incentives for consolidation and the resulting high health care prices. It is encouraging that Members of Congress from both parties are working together on site-neutral and related transparency legislation because reducing health care costs is an essential part of getting our fiscal house in order.” – Maya MacGuineas, Committee for a Responsible Federal Budget
“National Taxpayers Union applauds the introduction of the Site-based Invoicing and Transparency Enhancement (SITE) Act by Senators Mike Braun and Maggie Hassan. This innovative legislation will help fix unintended market distortions caused by a 2015 change to Medicare reimbursements. Enacting this change could help save billions for taxpayers by advancing site-neutrality in hospital payments.” – Nick Johns, Senior Manager of Policy and Government Affairs
“For too long, hospitals have gamed the system to charge patients and employers more based on the setting of care through exorbitant ‘facility fees.’ Ensuring fair billing practices is one of the most important things we can do right now to dramatically lower health care costs, and we applaud Sens. Braun and Hassan for introducing key site-neutral payment reforms. Momentum is clearly building in Congress around common-sense solutions to rein in corporate health systems and address the leading role they play in the healthcare affordability crisis.” – Alex Schriver, Executive Director, Better Solutions for Healthcare
- Americans For Prosperity
- Arnold Ventures
- Committee for a Responsible Federal Budget
- National Taxpayers Union
- Hoosiers for Affordable Healthcare
- Employer’s Forum of Indiana
- Centennial State Prosperity
- Small Business Majority
- Families USA
- Better Solutions for Healthcare
- American Benefits Council
- Community Catalyst
- Consumers for Affordable Health Care
The SITE Act would ensure that Medicare reimburses care fairly for off-campus services, regardless of who owns the provider. Specifically, the bill would:
- End exceptions to the 2015’s Bipartisan Budget Act site-neutral payment requirements, which exempted most facilities from fair billing requirements.
- 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.
- Require that health systems establish and bill using a unique National Provider Identifier number for each and every off-campus outpatient department.
- Direct HHS to treat outpatient departments as subparts of the parent organization and to issue these subparts unique provider identifiers.
- Remove liability for services rendered for payers that are not billed in accordance with this section’s requirements.
Patients across the country also face barriers to health care access due to staff shortages. Health care providers across the country are struggling to hire and retain qualified nurses to staff their facilities, and hundreds of thousands of new nurses will need to be trained over the next decade to meet our evolving health care workforce needs. The SITE Act would respond to these needs by reinvesting savings from this bill into a national nurse training program, which would:
- Create a graduate nursing education program to provide payments for qualified advanced practice registered nurse (APRN) training costs.
- Support a network of regional partnerships between hospitals, clinical training sites, and schools of nursing.
- Create 20,000 training positions per year, phased in over six years.
- Appropriate $100 million for the program.