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CMS’ Final Rule Will Address 'Site-of-Service Selection' Driven By Financial Incentives
Posted on: 11/19/2018

Earlier this month, the Centers for Medicare and Medicaid Services (CMS) released the final rule for 2019. One of CMS' new policies aims to address the issue of Medicare and beneficiaries often paying more for the same type of clinic visit in a hospital outpatient setting than in a physician office setting.

Currently, Medicare payment rates for the same or similar services are generally higher in hospital outpatient departments than in freestanding physician offices.

CMS is concerned that the significant shifts in the settings for care and overuse of hospital outpatient settings are profit-driven choices. This practice is referred to as "site-of-service selection."

The new policy, which CMS will phase in over two years starting in 2019, focuses on bringing payment rates for services provided in outpatient hospital departments in line with rates for the same services provided in a physician’s office; equalizing the payment rates removes the incentive to shift care to the more expensive sites. 

This practice not only affects the Medicare program, but also creates an uptick in beneficiaries’ out-of-pocket spending on copayments. 

RelatedISMS Resolution B201 (A-13); Site of Service Differential
The value of a physician-provided service is the same regardless of the location where the service is provided or the entity which submits the claim for service.

If you have any questions, please contact the ISMS Division of Health Policy Research and Advocacy at 800-782-4767 ext. 1470 or send an email.

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