Congress Steps Up on Fair Billing and Site Neutrality

Hospital prices have been front and center this year in Congress. Notably, there has been bipartisan support for tying prices to the value of the care being provided rather than who owns the location of care, also known as “fair billing” and “site neutrality.” It’s no wonder why: hospitals have been buying up physician practices across the country and converting them into hospital outpatient departments with the intention of gaining higher reimbursement in Medicare, billing for add-on facility fees, and increasing prices by 14% on average.

In response, we have seen a raft of bills tackling issues around fair billing and site neutrality requirements.

Fair Billing

The issue: Hospitals are not required to disclose whether the services being billed are provided within the hospital or at an off-site location. Therefore, Medicare and private payers can’t always determine the appropriate level of reimbursement, resulting in higher costs. Fair billing would require hospitals to disclose the site of care, giving payers leverage to lower costs. 

The action:

• Legislation passed by the House Committees on Energy and Commerce and Ways and Means would create fair billing requirements in Medicare. This is part of a multicommittee health care package introduced by House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Ranking Member Frank Pallone, Jr. (D-NJ), Ways and Means Chair Jason Smith (R-MO), and Education and the Workforce Chair Virginia Foxx (R-NC).
• Leaders of the House Education and Workforce Committee introduced and unanimously passed the Transparency in Billing Act. This legislation would institute fair billing requirements in the private market.
• Kevin Hern (R-OK) and Annie Kuster (D-NH) introduced the Facilitating Accountability in Reimbursements (FAIR) Act. The FAIR Act would accomplish both goals of the previous two bills in requiring fair billing practices in both Medicare and the private market.

Site Neutrality

The issue: While fair billing is associated with transparency where services are being provided to patients, site neutrality sets the same payment across locations of care, which would make payments to hospital outpatient departments and doctors’ offices the same for basic services.

The action:

• The Lower Cost, More Transparency Act, as part of the multicommittee House package, includes provisions that set payments at the same rate across care settings for physician-administered drugs in Medicare. This section, in addition to the fair billing provisions, would result in taxpayer savings of over $6 billion (over a decade).
• House Budget Committee Chairman Jodey Arrington (R-TX) introduced the Medicare Patient Access to Cancer Treatment (MPACT) Act, which would require site-neutral payments in Medicare for cancer care.
• Senators Mike Braun (R-IN) and Maggie Hassan (D-NH) introduced the Site-based Invoicing and Transparency Enhancement (SITE) Act. This legislation vastly expands Medicare’s site-neutrality requirements and requires fair billing in Medicare and the private market. Additionally, the bill would save taxpayers $40 billion and invest some of the savings into a national nurse training program. Representative Victoria Spartz (R-IN) has introduced the Preventing Hospital Overbilling of Medicare Act to do the same.
• Senate HELP Committee Chairman Bernie Sanders (I-VT) introduced the Primary Care and Health Workforce Expansion Act. While primarily focused on growing the health care workforce, this bill makes comprehensive site neutrality reforms in the private market. It would prevent hospitals from charging facility fees for all off-site services as well as primary care, telehealth, and low-complexity services. Hospitals would also be prohibited from charging a higher price than the median amount paid for services provided in a physician office.
• The Senate HELP Committee passed a revised workforce package, the Bipartisan Primary Care and Health Workforce Act, introduced by Chairman Sanders and Senator Roger Marshall (R-KS). This legislation puts fair billing requirements on hospital outpatient departments and bans facility fees for telehealth and evaluation/management services.

The raft of legislation, on both sides of the Capitol and among both parties, shows that fair billing and site neutrality are key priorities this year. We hope that Congress will act soon to deliver much needed relief to patients.