President Trump’s tax bill extension is making its way through Congress, and lawmakers are desperately trying to minimize its potentially negative impacts on high-risk American patients.
Yet senators can still pursue other avenues to help patients before the bill becomes law.
Senators can start by correcting a decades-old Medicare loophole exploited by the hospital industry. This loophole allows hospitals and outpatient departments to charge more money for the same service performed at an independent doctor’s office. Known colloquially as “facility fees,” these fees are billed in addition to the actual procedure fee. They are billed to Medicare, secondary insurance, and then to you if not fully covered.
Mandating these “site-neutral” payments would prevent hospital overreach and save patients billions of dollars. Legislators should take this measure seriously.
Take a look at the numbers: Closing this loophole could save Medicare patients north of $150 billion. This would have an even more significant impact on patients with vulnerable conditions like cancer, where Medicare patients can save nearly $300 on their chemotherapy treatments.
Hospitals have gotten away with this sort of highway robbery for years, thanks to a combination of consolidation and misleading arguments. It’s common for hospital networks in large population centers to buy up smaller practices by the dozen and designate them “hospital outpatient departments.” Then, the hospital network drives up costs to cover the increased financial burden of these new offices.
The arguments for these upcharges are shoddy at best. Hospital networks claim that these higher prices are due to a higher quality of care and providing low-cost treatments for those in need. The reality tells a different story – treatment quality at hospitals isn’t necessarily higher for the same treatment at an independent doctor’s office.
Much of the cost difference goes to administration fees rather than treatments – an unfortunate byproduct of the climate these hospitals created for themselves.
Thanks to these incentives for hospital networks, these organizations find it valuable to expand. Expansion requires buying more and more independent practices, and now about one in four healthcare workers is employed at a major hospital network. Hospitals hire more doctors, nurses, and administrative staff, while costs explode and quality of care plummets.
It’s time for lawmakers to step in and fix this broken system. Site-neutrality has been a policy floated around by members of Congress for years, and there is no better time to implement that policy than now. All it takes is a few strokes of the pen.
Policymakers on both sides of the aisle want to get this done. Last year, Senators Bill Cassidy, R-La., and Maggie Hassan, D-N.H., unveiled a comprehensive policy framework to implement site-neutrality into actionable legislation. Earlier this month, Senator John Kennedy, R-La., introduced a similar bill on the Senate floor to close the site-neutrality loophole.
Yet the devil is in the details. Lawmakers disagree on the specifics of how to implement site-neutrality, but they must realize that the common hurdle to overcome is the hospital industry’s resistance.
The reality is that most bills will be divisive for lawmakers in this polarized Congress, and this latest tax bill is no exception. Moderates are worried about their seats ahead of the midterms, deficit hawks are concerned with overspending, and progressives are alarmed at how much Medicaid will shrink.
But adding a site-neutrality provision gives lawmakers from all backgrounds an additional layer of flexibility to make all these decisions before a final bill reaches the president’s desk. Saving over $150 billion from one policy measure would provide much-needed breathing room.
Ultimately, lawmakers must look past the bureaucratic squabbles and politics to focus on the patients that these reforms will help. These savings will go a long way for Medicare patients, including seniors and those with debilitating chronic conditions. Small changes such as this can make much larger waves in the future, as patients from all backgrounds can have a more transparent, fair view into their healthcare expenses without distortions from hospital systems.
As the Senate argues over the details of the budget bill, it shouldn’t squander this opportunity to make that clearer vision of American healthcare a reality. They must eliminate “facility fees” and establish site-neutral payments for the good of patients everywhere.
Craig M. Wax is a family physician based in New Jersey
