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LUGPA Policy Update: Promoting Payment Parity and Competition in Urology Care

March 2024 

One of the most pressing challenges confronting independent urologists today is the disparity within the Medicare payment system, which tends to favor large hospital systems over independent providers. This inequity not only impacts reimbursement rates but also contributes to the consolidation of healthcare practices, limiting patient choice and driving up costs for patients and for both Medicare and private insurers.

Current Landscape:

As of 2021, only 30 percent of physicians in the United States practice independently, while the majority are employed by hospitals, hospital systems or health insurers. This trend toward consolidation has significant implications for patient care and healthcare costs.

Site-Neutral Payments Legislation:

A draft bill under consideration in Congress proposes to address this issue by establishing site-neutral payments under the Medicare program for certain services provided in ambulatory settings. Key provisions of the bill include:

  • Introducing site-neutral payments for specified ambulatory services, excluding those designated for hospital outpatient departments.
  • Payment rates are determined based on the volume of items and services furnished in hospital outpatient departments, ambulatory surgical centers, and freestanding physician offices.
  • Tasking the Secretary of Health and Human Services with identifying eligible services and determining payment rates.
  • Ensuring exceptions for critical care visits and trauma care visits at hospital outpatient departments.
  • Implementing adjustments to prevent reductions in payments to specified hospitals.

Under a site-neutral model, the payment for a service provided to a patient is the same regardless of the setting where the service is provided. Moving to site-neutral payments could save Medicare billions in reduced costs. According to a 2021 Committee for a Responsible Budget report, Medicare would save $153 billion over ten years by moving to site-neutral funding policies.

LUGPA’s Advocacy Efforts:

To advocate for fair reimbursement and competition in urology care, LUGPA is actively engaging with lawmakers and policymakers. Our advocacy efforts focus on:

  • Educating Congress and CMS on the value of independent urology and the potential cost savings associated with site-neutral payments.
  • Calling for legislative reforms to promote payment parity and competition in the healthcare market.
  • Making recommendations to address healthcare consolidation, including reforms to the Stark self-referral laws and the 340B drug discount program.
  • Urging more aggressive enforcement of anti-competitive provider mergers and acquisitions by the FTC.

LUGPA has been championing this issue for many years and we are encouraged that lawmakers have recently become more engaged on this issue. We remain committed to advocating for policies that ensure independent physicians can compete effectively with hospital systems, ultimately improving access to high-quality urology care for all Medicare patients nationwide. By promoting payment parity and competition, we aim to create a more equitable and efficient healthcare system for the benefit of patients and providers alike.