WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Budget Committee, today introduced the Same Care, Lower Cost Act. The bill would fix a part of Medicare’s billing structure that allows hospital systems to charge patients for outpatient care at more expensive hospital rates—even when the medical procedures could be done safely at non-hospital settings.
“Patients should only pay for the care they receive, not for the sign on the door or where they get treated. My Same Care, Lower Cost Act is a common-sense reform that expands patients’ health care options, creates greater transparency and reduces taxpayer burden,” said Kennedy.
This unfair billing practice occurs due to a provision in the 2015 Bipartisan Budget Act. That law established “site-neutral” payments under Medicare, but only for certain newly-constructed facilities. This left most hospitals exempt from the policy. The Same Care, Lower Cost Act would close that loophole, cutting health care costs for many patients.
In a June 2023 report, the Medicare Payment Advisory Commission (MedPAC) recommended that 66 Medicare billing codes, also known as ambulatory payment classifications (APCs), be made eligible for site-neutral payment reform.
The Same Care, Lower Cost Act would:
- Direct the Secretary of Health and Human Services to finally make the 66 APCs identified in MedPAC’s report eligible for site-neutral payments.
- Give the Secretary the authority to add additional APCs for site neutrality consideration.
According to the Congressional Budget Office, implementing site-neutral payments for hospital outpatient departments could save the Medicare program and taxpayers roughly $157 billion over 10 years.
Some estimates also suggest that this reform could save Medicare recipients anywhere from $94 to $134 billion in lower premiums and cost sharing over 10 years.
Better Solutions for Healthcare, AMAC Action, Free2Care, Committee for a Responsible Federal Budget, Americans for Prosperity, the Libre Initiative, and Concerned Veterans for America support the bill.
“High healthcare costs driven by dishonest hospital billing practices leave patients and employers with unsustainable financial burden. This legislation would put a check and balance on hospital pricing, and its introduction reflects the American public’s concern with how corporate hospital systems conduct business,” said Connie Partoyan, Executive Director, Better Solutions for Healthcare.
“The Same Care, Lower Cost Act equalizes Medicare payment rates across health care provider locations which would result in significant savings for the Medicare program. This legislation would also drive down wasteful spending within the program while reducing premiums, cost-sharing, and other out-of-pocket expenses for Medicare beneficiaries. AMAC Action has long advocated for site neutrality legislation to reduce health care costs for seniors and we are pleased to support this bill on behalf of AMAC’s 2-million-plus members,” said Andy Mangione, Senior Vice President, AMAC Action.
“The Same Care, Lower Cost Act will usher in reduced Medicare spending, decreased cost-sharing for seniors, and greater transparency in healthcare pricing. For the patients we represent, this means lower premiums and fewer out-of-pocket surprises. For physicians, it means a more level playing field and greater independence from hospital system acquisition pressures driven by payment disparities, not clinical necessity,” said Josie Gallagher, Executive Director, Free2Care.
“Site-neutral payments simply make sense. Medicare should pay the same price for the same service regardless of whether the service is provided in a physicians’ office or in a hospital outpatient department. We are happy to see a new site-neutral bill introduced by Senator Kennedy that would require the same rates at both on- and off-campus hospital outpatient departments. In a time of high and rising debt and deficits, it makes perfect sense to reduce deficits and save money for both taxpayers and Medicare beneficiaries,” said Maya MacGuineas, President, Committee for a Responsible Federal Budget.
“We applaud Senator Kennedy and his colleagues on introducing a sensible reform that will give patients more options and make health care more affordable, not just for seniors but for all Americans. For too long, Medicare’s archaic payment policies have enabled hospital corporations to get away with overcharging for care, an error that is fueling harmful local market consolidation and needlessly driving up costs for patients and taxpayers alike. This important legislation fixes a major flaw in our health care system, and our thousands of activists across the country will be working hard to enact it, this year,” said Dean Clancy, Senior Health Care Policy Advisor, Americans for Prosperity.
“Site neutrality ensures patients are treated based on the care they receive, not where they receive it. For Latino families and other minorities, who often rely on community-based providers and outpatient centers, site neutrality means lower costs, more choices, and better access to care close to home,” said Sandra Benitez, Executive Director, The LIBRE Initiative.
“Veterans, service members, and military families live all across our country, in settings from urban to deeply rural. Like our civilian neighbors, we deserve access to high quality, affordable health care of our choice. Site neutral payment reform for both TRICARE and VA community care providers would promote greater health care competition, expand treatment options and lower costs for taxpayers. In this way, Sen. Kennedy’s bill will enhance military and veterans’ health care, while creating a model the rest of America can emulate and expand access to quality affordable care for underserved patients everywhere,” said John Vick, Executive Director, Concerned Veterans for America.
Full text of the Same Care, Lower Cost Act is available here.
Reprinted with Permission from John Kennedy – U.S. Senator for Louisiana
I Highly Respect and Admire Senator Kennedy!! He is one of the smartest men I’ve ever known and heard speak, and I wish he was my Senator in Ohio!! His sense of humor is as fantastic as his knowledge and expertise, and I read everything I can that he writes, and love to watch him on TV and internet videos. We could use at least 50 more Senators like the Honorable John Kennedy – and it would be awesome if he was on the Supreme Court, too!! They need some Constitutional Common Sense!! Everyone could take a lesson from Senator John Kennedy!!
This bill is excellent news for Medicare patients.
The next step is legislation to eliminate this billing practice for non-Medicare patients as well.
Otherwise, the savings for Medicare patients will be shifted back as cost increases to patients who are under age 65.
Very good initiative. -BUT- My concern is medical facilities can and will refuse to accept Medicare. Already there are significant places that do not accept it, this could push more to decline Medicare. Let’s hope I am wrong.
Speaking as a healthcare worker since 1971, the American Healthcare System is a red, snarled ball of yarn with Medical Insurance Companies, Providers, Medical Supply and Pharmacology Companies, Hospitals and Clinics and Patients all tied up within it. As anyone who has undertaken to unroll such a mess knows, it will take time and meticulous effort unravel all the knots AND IT IS ABOUT TIME CONGRESS DID IT. We, the people, do not have the power but we can applaud the ones trying to pick through the knots. We can also let those backing away from the project what we think of their cowardice.
Phew! I have been wanting to get that off my chest for decades.
No one actually knows the true cost for medical care, especially hospital fees. The fees charged for a procedure may include; anesthesiologist, surgeon, lab fee, surgery suite, meds used during and after, pre-op, post op etc. The medicare approved amount is most often much lower and the paid amount is only a portion of that, sometimes 0.08 cents on the dollar to maybe 20-28% of the billed. Then any supplemental insurance pays 20% of 8% etc., not the billed. How does any business work if you collect 8-20% with an 80%-90% OVH and being ethically driven to accept all, even those without insurance. There’s no amount of volume that ever produces a margin when your cost ore 101% of your revenue. How many cars would get sold if the manufacturers received 20% of the 8% sticker (0.016). So in response, the fees are increased to a ridiculous amount in hopes to get more. Now add on top of that the easiest cut to Medicare or any medical cost is to reduce the % of payment or even better yet, reduce the pay of the MD; you know the bad guy in the equation, who is trying to enter every RVU possible to get the hospital or corporate entity paid so they can get paid (time away from patient care). This burdened legacy results in smaller hospitals squeezed, sole practitioners being bought out by larger hospitals or corporate entities, that answer to stock holders etc.because they just can’t deal with it. The golden goose gets eaten, bottle necks get tighter, lines get longer and everyone hopes for a bailout. So when regulations and multiple layers of people and the profit takers get in the way of the Dr. and patient relationship then even socialism starts to look like a solution; then ask yourself, who and why did this problem begin? Create a problem that only you can solve is one of the oldest tricks in the book. Makes the fee of a chicken for a remedy almost logically desirable. .
Isn’t the price for service determined by the coding of the service? Since coding is done by the hospital or clinic, isn’t there a conflict of interest (if the interest of the coder is making money?)
So how are those who work and do not get health care benefits to get care. The low income person in America needs the help. Jk
CUT Medicare, Medicaid HHS bureaucracy alone
Must CUT