Lower Costs, More Transparency Act Passes House
The House of Representatives passed the Lower Costs, More Transparency Act yesterday with a large bipartisan majority. Within the legislation is an important first step towards moving Medicare to pay for common and safe procedures in a site-neutral way. It requires Medicare Part B to pay the same amount for physician-administered prescription drugs, whether provided in an “off-campus” hospital outpatient department or in an independent physician’s office. This change is projected to save Medicare nearly $4 billion over ten years.
As we previously discussed, the bill contains a combination of several health transparency and site-neutral-related proposals from the House Energy and Commerce, Education and the Workforce, and Ways and Means Committees. While the policies represent a good first step, there is much more that can be done to save money and reduce the factors that encourage large hospital systems to purchase independent physician offices and increase consolidation – raising health care prices and costs for everyone.
Numerous policy organizations with diverse perspectives, along with physician groups and patient-advocacy groups, have signed letters to Congress in support of site-neutral policies and transparency measures like those in the Lower Cost, More Transparency Act. The letters highlight the unnecessarily high costs for patients seeking care at hospital outpatient departments and improving transparency for patients as well as researchers, policymakers, and employers.
As the Senate considers the House bill, and site-neutral policies more generally, it should understand that broader site-neutral reform could save Medicare over $150 billion and beneficiaries $94 billion in premiums and cost sharing over ten years. Additionally, action on site-neutral payments in the commercial insurance market could reduce national health expenditures by around $450 billion.
Site-neutral policy is a good option to reduce health care costs. It has a history of bipartisan support and can lower federal costs and patient cost sharing without reducing programmatic benefits. Congress should maintain this momentum to expand site-neutral payments and consider other health savings options like those proposed in our Health Savers Initiative.