Site-neutral payment: HOPDs and potential savings for Medicare

Changing the way Medicare pays for services could save the program into hundreds of millions of dollars. Christopher M. Whaley, Ph.D., is associate professor, health services, policy and practice, and associate director of the Center for Advancing Health Policy through Research at Brown University. He’s the co-author of a Health Affairs analysis of 2026 Medicare physician payment, and there could be changes to payment involving hospital outpatient departments (HOPDs).

Medical Economics: Your article touches on payment for off-campus hospital outpatient departments as a potential source of savings for Medicare. Can you explain what those are and why those are so important?

Christopher M. Whaley, Ph.D.: Like many government programs, the Medicare system is soon potentially facing huge financial and fiscal headwinds, and, at least the way I view it, reforming site-of-care payment differentials and having site-neutral payments is probably the low-hanging fruit to shore up Medicare's finances. The Congressional Budget Office has estimated that the full scope site-neutral payments would save the Medicare system about $150 billion over a 10-year period, and that's money that comes directly from from taxpayers.