Put It in Park: (Site) Neutrality Is a Slippery Slope

What comes to mind when you hear the word neutral?  

Impartial? Safe? Fair?  

An Alpine nation in central Europe?   

In the world of health care payment and reimbursement, neutrality sounds good. A bandage is a bandage, right? Sure, but as with anything in health care, how it’s applied, for what purpose, and under what circumstances matter. A lot.  

Site-neutral payment policies may be well-intentioned, but in practice, they can also be dangerous, especially in the case of hospital outpatient departments (HOPDs).

HOPDs, which include hospital-owned clinics that provide such services as complex cancer treatment, infectious disease care, and mental health support, serve some of the sickest and most vulnerable patients. These are individuals from medically underserved populations who often require more complex care than Medicare patients treated in other care environments, such as independent physician offices and ambulatory surgical centers. HOPDs are also held to more rigorous licensing, accreditation, and regulatory requirements.  

So, when site-neutral payment policies target HOPDs, the result isn’t just a line item adjustment. Outpatient clinics could be forced to close or cut back on critical services, resulting in reduced patient access and even more strain on an overburdened workforce. 

Higher reimbursement in HOPDs isn’t an accident. It’s a long-standing recognition of the input required to deliver safe, effective care in this environment to ensure the best outcomes. 

Let’s put it another way.  

If you own, lease, or regularly drive a vehicle, you understand the importance and pitfalls of maintenance, and you know the difference between dropping by your neighborhood mechanic and heading to the dealership. Sure, that local shop might be cheaper – and you trust them. But when something’s really wrong, you go to the dealership. You pay more, but you also get highly specialized knowledge, manufacturer-trained technicians, strict standards, and peace of mind. 

We’d all love for those costs to be equal. But what might feel fair and cost-effective for the one paying the bill isn’t always aligned with the reality of the one who provides the service. 

Hospitals and HOPDs don’t get to adjust prices based on market whims. Unlike mechanics, they operate within strict regulatory frameworks – and for good reason. That check engine light might just be a warning that carries you another 5,000 miles. Complex medical care often cannot wait until regular business hours, it has to happen now – in the middle of the night, during a crisis, when no one else is open.  

If we’ve been reminded of nothing else from this year so far, it’s a fundamental truth of health care financing in the United States: making something cost less for the federal government doesn’t mean the actual cost goes down.  

It just shifts costs to someone else. Usually to the provider. Often to the patient. Always to the system that’s already stretched thin. And despite insinuations otherwise, this is not a case where the physician or hospital may simply “heal thyself.”  

We get in return for that for which we paid, and there are times when the cost depends on where the service was delivered. It matters – and we should talk about that more openly and honestly, along with all the other issues that contribute directly to the financial strains and realities of providing and receiving healthcare in the United States. 

Hospitals, HOPDs, and providers have done and are willing to do our part – but we can’t be expected to shoulder it alone. Because we truly can’t afford what will be left behind.