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Hospital acquisitions draw House's attention

May 23, 2024
UNITED STATES - MARCH 21: Chairman Rep. Jodey Arrington, R-Texas, right, and ranking member Rep. Bre

House Budget Chair Jodey Arrington and Ranking Member Brendan Boyle at a committee hearing. Photo: Tom Williams/CQ-Roll Call via Getty Images

Lawmakers on two House committees signaled Thursday that they could use a year-end health deal to address hospital acquisitions of independent physician practices, which they contend are driving up health spending.

Why it matters: The sentiment in the House Ways and Means and Budget committees may add urgency to advancing bills addressing hospital business practices and consolidation, as well as overhauling Medicare provider and PBM payments.

What they're saying: House Budget Chair Jodey Arrington found himself agreeing with Sophia Tripoli, senior director for health policy at Families USA, on the need for site-neutral policies that would have Medicare pay hospital outpatient departments the same for the same service as independent physician offices.

  • "I find myself in an awkward situation here where I agree more with the Democratic witness than in any other hearing," Arrington said.
  • "I am trying desperately to find consensus solutions, that my Democrat colleagues support, that my Republican colleagues can get excited about.… "There seems to be an obvious one … and that's site-neutral payments."

The Lower Costs, More Transparency Act included some modest site-neutral measures for physician-administered drugs, as well as PBM transparency requirements.

Rep. Mike Kelly used a Ways and Means hearing to broach reviving the bipartisan Improving Seniors' Timely Access to Care Act after the Memorial Day recess.

  • It would create an electronic prior authorization system and a process for establishing real-time decisions for routine services in Medicare Advantage plans.

The big picture: "Over 70% of physicians are employed by a health care system or a corporate entity," said Ways and Means health subcommittee Ranking Member Lloyd Doggett. "This consolidation is creating greater obstacles for the few remaining independent practitioners who are struggling to compete."

  • Chapin White, the CBO's director of health analysis, noted in testimony to Budget that health care consolidation has been increasing over the years, and the share of physicians employed by a hospital or health system rose from 29% in 2012 to 41% in 2022.
  • White said the CBO expected that consolidation trend to continue at roughly the same pace for the next decade, and that "lack of site neutrality" is one of the driving factors.
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