WASHINGTON – Sen. John Kennedy (R-La.), a member of the Senate Budget Committee, today introduced the Same Care, Lower Cost Act. The bill would fix a part of Medicare’s billing structure that allows hospital systems to charge patients for outpatient care at more expensive hospital rates—even when the medical procedures could be done safely at non-hospital settings.

“Patients should only pay for the care they receive, not for the sign on the door or where they get treated. My Same Care, Lower Cost Act is a common-sense reform that expands patients’ health care options, creates greater transparency and reduces taxpayer burden,” said Kennedy.

This unfair billing practice occurs due to a provision in the 2015 Bipartisan Budget Act. That law established “site-neutral” payments under Medicare, but only for certain newly-constructed facilities. This left most hospitals exempt from the policy. The Same Care, Lower Cost Act would close that loophole, cutting health care costs for many patients.

In a June 2023 report, the Medicare Payment Advisory Commission (MedPAC) recommended that 66 Medicare billing codes, also known as ambulatory payment classifications (APCs), be made eligible for site-neutral payment reform.

The Same Care, Lower Cost Act would:

• Direct the Secretary of Health and Human Services to finally make the 66 APCs identified in MedPAC’s report eligible for site-neutral payments.

• Give the Secretary the authority to add additional APCs for site neutrality consideration.

According to the Congressional Budget Office, implementing site-neutral payments for hospital outpatient departments could save the Medicare program and taxpayers roughly $157 billion over 10 years.

Some estimates also suggest that this reform could save Medicare recipients anywhere from $94 to $134 billion in lower premiums and cost sharing over 10 years.

Better Solutions for Healthcare, AMAC Action, Free2Care, Committee for a Responsible Federal Budget, Americans for Prosperity, the Libre Initiative, and Concerned Veterans for America support the bill.

“High healthcare costs driven by dishonest hospital billing practices leave patients and employers with unsustainable financial burden. This legislation would put a check and balance on hospital pricing, and its introduction reflects the American public’s concern with how corporate hospital systems conduct business,” said Connie Partoyan, Executive Director, Better Solutions for Healthcare.

“The Same Care, Lower Cost Act equalizes Medicare payment rates across health care provider locations which would result in significant savings for the Medicare program. This legislation would also drive down wasteful spending within the program while reducing premiums, cost-sharing, and other out-of-pocket expenses for Medicare beneficiaries. AMAC Action has long advocated for site neutrality legislation to reduce health care costs for seniors and we are pleased to support this bill on behalf of AMAC’s 2-million-plus members,” said Andy Mangione, Senior Vice President, AMAC Action.

“The Same Care, Lower Cost Act will usher in reduced Medicare spending, decreased cost-sharing for seniors, and greater transparency in healthcare pricing. For the patients we represent, this means lower premiums and fewer out-of-pocket surprises. For physicians, it means a more level playing field and greater independence from hospital system acquisition pressures driven by payment disparities, not clinical necessity,” said Josie Gallagher, Executive Director, Free2Care.

“Site-neutral payments simply make sense. Medicare should pay the same price for the same service regardless of whether the service is provided in a physicians’ office or in a hospital outpatient department. We are happy to see a new site-neutral bill introduced by Senator Kennedy that would require the same rates at both on- and off-campus hospital outpatient departments. In a time of high and rising debt and deficits, it makes perfect sense to reduce deficits and save money for both taxpayers and Medicare beneficiaries,” said Maya MacGuineas, President, Committee for a Responsible Federal Budget.

“We applaud Senator Kennedy and his colleagues on introducing a sensible reform that will give patients more options and make health care more affordable, not just for seniors but for all Americans. For too long, Medicare’s archaic payment policies have enabled hospital corporations to get away with overcharging for care, an error that is fueling harmful local market consolidation and needlessly driving up costs for patients and taxpayers alike. This important legislation fixes a major flaw in our health care system, and our thousands of activists across the country will be working hard to enact it, this year,” said Dean Clancy, Senior Health Care Policy Advisor, Americans for Prosperity.

“Site neutrality ensures patients are treated based on the care they receive, not where they receive it. For Latino families and other minorities, who often rely on community-based providers and outpatient centers, site neutrality means lower costs, more choices, and better access to care close to home,” said Sandra Benitez, Executive Director, The LIBRE Initiative.

“Veterans, service members, and military families live all across our country, in settings from urban to deeply rural. Like our civilian neighbors, we deserve access to high quality, affordable health care of our choice. Site neutral payment reform for both TRICARE and VA community care providers would promote greater health care competition, expand treatment options and lower costs for taxpayers. In this way, Sen. Kennedy’s bill will enhance military and veterans’ health care, while creating a model the rest of America can emulate and expand access to quality affordable care for underserved patients everywhere,” said John Vick, Executive Director, Concerned Veterans for America.

Full text of the Same Care, Lower Cost Act is available here.

Reprinted with Permission from John Kennedy – U.S. Senator for Louisiana