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Senate could be site-neutral graveyard

Sen. Ron Wyden at the Capitol

Wyden at the Capitol. Photo: Drew Angerer/Getty Images

Site-neutral payment policies are facing tough odds in the Senate amid intense lobbying from hospitals, after the House overwhelmingly backed the changes in a strong bipartisan vote.

Why it matters: The idea of having Medicare pay the same for outpatient services regardless of the medical setting would save both taxpayers and patients money.

  • It's the leading edge of broader efforts to control hospital costs, which are starting to receive more scrutiny after years of focus on drug prices.

Yes, but: The provision that passed the House is a modest start, covering only physician-administered drugs.

  • Hospitals nonetheless argue that the measure would lead to damaging cuts and affect patient care.

What they're saying: In a sign of the uphill climb, Senate Finance Committee Chair Ron Wyden cast some doubt on overhauling the payments on Tuesday.

  • "I, for example, am starting to get asked by members in rural constituencies, 'How does this all affect us?' And I'm not sure anybody has answered that question," Wyden told reporters.
  • "The Senate's a pretty rural place," he added, noting that he is also "juggling" priorities like PBM changes and a tax bill.

Between the lines: Senate Majority Leader Chuck Schumer is also widely known as an ally of New York hospitals, posing another complication.

  • A source who has spoken to Schumer's office about the site-neutral push said it has not firmly ruled out action but is not likely to support sweeping proposals.
  • "There's an understanding that there's a pretty narrow window with them on this," the source said, with the door at least open to the House-passed provision.
  • "If you could make enough of a case, I think they're willing to listen and he might not stand in the way of something pretty narrow and targeted," the source said. "I think that if this does pass, it could be a real uphill battle to get something more comprehensive out of him on site-neutral."

The big picture: Policy experts from the left and right support the idea, ranging from Families USA to Americans for Prosperity.

  • "We're of course pushing as hard as we can to make sure that members know that there's political cover and that the American people want them to do this," said Sophia Tripoli, senior director of health policy at Families USA.
  • Laura and John Arnold, the founders of Arnold Ventures, another group advocating for site-neutral, as well as CEO Kelli Rhee, were in Washington last week meeting with Senate Finance members, according to a source familiar with the meetings.
  • As for rural concerns, Tripoli noted the House bill exempts critical access hospitals (a designation for rural hospitals), and that Congress could provide additional support for hospitals that really need it rather than the current inefficient system.

The intrigue: The hospital group Coalition to Protect America's Health Care recently launched a seven-figure TV and digital ad campaign against the idea.

  • One advocate for site-neutral policies recounted: "The number of offices that have said, 'Well, you know, I'm really worried, I've heard from my hospital,' like hospitals are out and about. Their boards are out and about, and they're like kicking a major fuss about this."
  • The American Hospital Association wrote in a letter to Congress that it would be "unconscionable" to impose site-neutral policies, arguing that higher payments for outpatient care are justified because they deal with sicker patients and have higher costs than independent physicians' offices.
  • "It just hasn't picked up the traction [in the Senate]," a hospital industry source said. "And I think what we're hearing in our conversations with the Senate is it's just that there's an understanding that there are potential unintended consequences here that need to be explored more fully before going down this road."

By the numbers: The CBO says the modest House-passed provision would save about $3.8 billion over 10 years.

  • More sweeping proposals affecting more than physician-administered drugs would save over $100 billion.
  • The Leukemia & Lymphoma Society estimates that site-neutral policies could save a patient with multiple myeloma $1,219 annually in out-of-pocket costs.

The bottom line: The idea is not dead, and the House, particularly Energy and Commerce Chair Cathy McMorris Rodgers, continues to push for it.

  • If the measure does not make the March government funding package, the lame duck session could provide another chance.
  • Sen. Mike Braun, among the handful of Senate site-neutral advocates, said his colleagues "haven't tested the waters enough," when asked about hospital opposition.
  • He added: "I already know it's benefited me politically because most people know our health care costs are too damn high."
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