House, Senate Grapple with Health Care Legislation, Site-Neutral Cuts

September 25, 2023

House Leadership Pulls Bill with Hospital Site-Neutral Cut from Calendar

House leadership last week scheduled a vote to consider a comprehensive health care transparency bill, H.R. 5378, the Lower Costs, More Transparency Act. The legislation draws substantially from the House Energy and Commerce Committee’s PATIENT Act and incorporates provisions from the Health Care Price Transparency Act and the Transparency in Billing Act. GNYHA’s comments on provisions of the bill that are relevant to hospitals are available here.

House leadership scheduled the vote under suspension of the rules, a procedure typically used to expedite the passage of non-controversial bills. Under suspension of the rules, members cannot offer amendments, debate time is highly restricted, and bills can pass “by voice” without a recorded electronic vote. Bills considered under suspension of the rules must reach a two-thirds majority to pass instead of a simple majority.

House leadership removed H.R. 5378 from the suspension calendar a few hours before the scheduled vote, citing process-related concerns, and did not reschedule it. Whether the measure had enough support to pass with the required two-thirds majority is unclear. Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) expressed her commitment to passing the bill before the end of the calendar year.

While GNYHA supports some of the bill’s provisions, including the two-year elimination of the Medicaid disproportionate share hospital (DSH) cut, we strongly oppose the bill’s major Medicare “site-neutral” cut to hospital outpatient department reimbursement for drug administration services.

GNYHA is closely monitoring activity around the bill and will inform you of any developments. We encourage you to immediately contact members of your delegation and highlight your concerns about the bill’s inclusion of site-neutral cuts. To support your advocacy, our position paper on site-neutral cuts is available here.

Senate HELP Committee Marks Up Primary Care Bill with Hospital Site-Neutral Cut

The Senate Health, Education, Labor, and Pensions (HELP) Committee on Thursday considered S. 2840, the Bipartisan Primary Care and Health Workforce Act, a health care workforce bill sponsored by Senator Bernie Sanders (I-VT) and Senator Roger Marshall (R-KS) intended to expand access to primary care. The bill reauthorizes several health programs set to expire on September 30, including Community Health Centers and the National Health Service Corps. The amended bill also contains language codifying the Federal price transparency rule for hospitals and health plans.

The $26 billion bill passed the full committee with a 14-7 vote, with three Republicans joining all Democrats to advance the measure. Ranking Member Bill Cassidy (R-LA) opposed the bill due to the lack of offsets to pay for the proposal and a rushed drafting process.

GNYHA opposes the bill’s commercial site-neutral cut to pay for other health care programs. The bill prohibits hospital outpatient departments from charging commercial health plans, their enrollees, and uninsured patients facility fees for in-person evaluation and management services and any services provided via telehealth on or after January 1, 2026. The prohibition of facility fees would apply to the full range of commercial coverage: insured or self-funded, group or individual. The policy offers limited exceptions for a small subset of services furnished in emergency departments.

The bill also prohibits hospitals from submitting claims to commercial health plans (insured or self-funded, group or individual) or billing patients enrolled in such plans for services provided at off-campus outpatient departments unless the claim includes a separate unique identifier for each department. It also prohibits commercial health plans (insured or self-funded, group or individual) from paying claims without such unique identifiers.

Neither proposal requires insurers to pass the associated savings to purchasers or consumers in the form of reduced premiums or to reinvest savings in the delivery system.

The commercial site-neutral cuts to hospital outpatient departments reflect a fundamental misunderstanding of how hospitals operate. Facility fees cover the higher overhead costs of operating a 24/7 hospital. They also allow hospitals to offer wraparound services, prepare for major emergencies and disasters, and comply with the intensive regulatory requirements associated with these responsibilities. Patients seen in hospital outpatient departments are considered hospital patients and have full access to the hospital’s support services. The higher reimbursement rates for hospital outpatient departments have long and appropriately reflected the higher costs of providing services in a hospital setting compared to a freestanding physician office.

Hospitals are already struggling with inadequate Medicare and Medicaid rates, and prohibiting facility fees will further diminish hospital reimbursement. Rather than lowering the cost of care for patients, prohibiting facility fees would create a windfall for commercial insurers, to the severe detriment of hospitals and the communities they serve.

GNYHA supports policies that address the physician shortage and expand access to care, but these investments should not come at the expense or burden of hospitals providing vital patient care services. We will keep you apprised of any developments related to this bill.