AHA Study Finds 'Drastic' Income, Health Differences Between Hospital Outpatients and ASC Patients

Hospitals push back against CMS's policy shift on site-neutral payments for outpatient services.

Medicare patients using hospital outpatients clinic are more likely to be poorer, sicker, and have been previously hospitalized than Medicare patients treated in ambulatory surgical centers, an American Hospital Association-commissioned study says.

The findings by hospital stakeholders come as the Centers for Medicare & Medicaid Services initiates site-neutral payments for Medicare that would pay hospitals the same as ASCs and other care venues.

"Proposals that treat hospital outpatient departments the same as ambulatory surgical centers and other sites of care are misguided, and ignore the healthcare needs of the patients and communities we serve," AHA President and CEO Rick Pollack said Thursday in a media release accompanying the study, which was conducted for the AHA by KNG Health Consulting LLC.

The change, which came in the 2019 Outpatient Prospective Payment System final rule, calls for hospital outpatient departments to be paid at a rate equivalent to the Physician Fee Schedule for clinic visits. That's 40% less than their current reimbursement.

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In December, the AHA and the Association of American Medical Colleges, and three hospitals, filed a lawsuit against the Department of Health and Human Services over the policy shift, calling it "an unprecedented assertion of the agency's authority."

The lawsuit argues that CMS is acting outside the law to make this harmful policy change.

According to the AHA study, relative to those seen in an ASC, Medicare patients seen in HOPDs are more likely to be:

• From lower-income areas;
   
• Under 65 (individuals with disabilities, end-stage renal disease, and amyotrophic lateral sclerosis) and over 85;
   
• Burdened with more severe chronic conditions;
   
• Previously hospitalized;
   
• Eligible for both Medicare and Medicaid;
   
• Previously cared for in an emergency department or short-term acute care hospital setting, thereby having higher Medicare spending prior to receiving ambulatory care.

AHA says Medicare already reimburses hospitals less than the cost of providing the care, even as hospitals are held to higher and more comprehensive licensing, accreditation and regulatory requirements than freestanding physician offices or ACSs.

In 2017, for example, Medicare margins for outpatient services were negative 12.8%, and overall, Medicare margins were a record low of negative 9.9%, AHA said.