Last week, U.S. Sens. Bill Cassidy, M.D. (R-La.) and Maggie Hassan (D-N.H.) released a bipartisan framework to advance site-neutral Medicare payment reform. With rising patient demand for lower-cost outpatient options, ambulatory surgery centers (ASCs) are positioned to capitalize on this shift if reimbursement parity is achieved.

The proposed framework could level the playing field between hospitals and independent care providers by standardizing Medicare payments across different care settings, the lawmakers argued. 

This framework has been brought forward as The Centers for Medicare & Medicaid Services (CMS) has finalized a 2.9% Medicare payment increase for ASCs 2025, alongside updates to the ASC Quality Reporting Program, including new health equity measures. 

“While two thirds of doctors practiced independently or in non-hospital settings a decade ago, today at least half of physicians are hospital-employed,” the senators wrote. “At the same time, patients are more frequently receiving care in outpatient facilities, and inpatient admissions to the hospitals are trending downward.”

The push for site-neutral payments

The Cassidy-Hassan framework targets the current Medicare payment structure, which allows hospitals to charge higher prices for services, some of which could be provided in less costly settings like ASCs or physician offices.

Such a reform could save billions of taxpayer dollars and lower patient out-of-pocket costs by eliminating “facility fees” that hospitals typically charge, even for basic services, the senators said.

“As a doctor, my focus is always providing the best care at the most affordable cost,” Cassidy said in a press release. “If the same care can be safely provided in different settings, patients should not pay hundreds more simply because their doctor works in a hospital. Our framework provides a path to ensure that.”

Under current regulations, Medicare reimbursement rates for procedures in ASCs are often lower than those for equivalent hospital-based services, creating a financial incentive for hospitals to acquire independent practices and consolidate care settings, the policy proposal states. 

Should this framework pass into legislation, ASCs would receive payments comparable to hospitals for the same services. The proposal calls for imposing the lower, non-hospital rate for services most commonly performed in an ambulatory or physician setting, based on a Health and Human Services Department review of data going back four years.

This shift could reduce the allure of hospital consolidation, allowing ASCs to compete more effectively as independent entities. For patients, it could mean fewer instances in which they are compelled to seek care at higher cost settings, particularly for outpatient procedures, diagnostic tests and minor surgeries.

Endorsements and reactions

The framework proposal received endorsements from a wide array of stakeholders, including the ERISA Industry Committee, Families USA, and the Blue Cross Blue Shield Association. 

“We know from our listening work that cost is the primary source of anxiety for people when seeking health care, and that it often prevents people from getting the care that they need. Establishing a site-neutral payment policy not only promotes fair billing practices for services we all rely on, but it strikes at the core of what people want changed with our health care system,” Natalie Davis, CEO of United States of Care, a non-profit focused on affordable health care, said in a press release.  

However, the American Hospital Association (AHA) warned that the framework could jeopardize access to critical hospital-based care.

“​​Simply put, this framework from Senators Hassan and Cassidy will limit and eliminate critical hospital-based care, resulting in increased wait times and decreased access to care for patients,” Stacey Hughes, executive vice president of AHA, said in a statement. “It is irresponsible to think that clawing back up to $140 billion of Medicare spending for seniors won’t destabilize access to care.” 

Rather than addressing the root causes driving physician acquisitions, the framework instead proposes dramatic and untenable Medicare cuts, reducing seniors’ access to critical hospital-based care, Hughes added. 

 “We urge Congress to address the true drivers of physician acquisitions, which include significant underpayments to providers and persistent delays and denials of care by commercial insurers,” she said.