Azar and Sebelius from HHS Oppose Price Fixing in Hospital Sites

Former leaders of the Department of Health and Human Services (HHS) have put forth a proposal to reduce health care costs that could garner bipartisan support in Congress.

Alex Azar, the HHS secretary during Donald Trump’s administration, and Kathleen Sebelius, who served under Barack Obama, penned an op-ed piece for STAT, a health care media outlet, urging Congress to adopt policies promoting site-neutral payments to save money for patients and taxpayers.

They explained how the current system allows hospital systems to increase prices for services when they purchase physician offices, simply by designating them as “hospital sites” on paper. This leads to higher costs for patients. Implementing site-neutral payments would address this issue and prevent hospitals from charging more for services provided in physician offices and outpatient clinics that they acquire.

Both the Obama and Trump administrations supported site-neutral payment policies, with the Bipartisan Budget Act of 2015 enacting reforms for Medicare. Advancing site-neutral payment was also a focus of the Trump administration, which included proposals to expand the policy to exempted facilities, introduce rules for hospital price transparency, and back legislation to stop surprise medical billing.

Although progress has been made, there is still work to be done. The Medicare Payment Advisory Committee recommended advancing site-neutral payment for certain medical services, which could lead to significant savings for patients and taxpayers while reducing consolidation incentives.

Site-neutral payments are seen as a sensible policy to decrease costs for patients and taxpayers, encourage care delivery in the right setting at the right price, and reduce consolidation incentives. It is a straightforward solution that could benefit all parties involved.